Because the bidding process often presents so much confusion, let's look at a bidding scenario to illustrate the way that bidding works. Our imaginary auction is for a stuffed banana whose seller has listed it with a starting bid of $7.00. Events unfold like this:
- First bid: A user called Jack bids $24.00 because he likes stuffed bananas very much indeed. Though his bid is $24.00, eBay shows the current bid amount on the auction page as $7.00, because this is the first bid. If no-one else bids before auction close, Jack will win the auction and pay $7.00 plus shipping.
- Second bid: Another user called Jill finds the stuffed banana listing and wants to add the item to her own plush fruit collection. At the bottom of the listing page, eBay tells her that she must bid at least $7.50, the price of the current bid plus the current bid increment, in order to bid on the item. Jill enters a maximum bid of $7.50, and is immediately outbid by Jack, whose maximum bid, you may recall, was $24.00. Now the current bid amount is $8.00, or Jill's bid of $7.50 plus one bid increment, because eBay has bid on behalf of Jack, whose maximum bid was higher. If no one else bids, jack will now pay $8.00.
- Third bid: Unfortunately for Jack, another bidder named Ted has also found the listing. As a professional produce buyer, Ted is very interested in the stuffed banana. Though eBay tells him that he can enter a bid as low as $8.50, or the current bid plus one increment, Ted enters a maximum bid of $49.49. eBay bids by proxy on behalf of Jack and Ted all the way up to Jack's maximum, $24.00, but Ted's bid of $49.49 is higher. Ted becomes the new high bidder, and the current bid amount is $24.50, or one bid increment above Jack's maximum of $24.00.
- Fourth bid: A user named Amy who has only a passing interest in bananas happens onto the listing and bids on a whim. Though eBay tells her she must bid at least $25.00, or the current bid of $24.50 plus one increment, Amy bids $45.00. She is instantly outbid (by proxy) by Ted, at $46.00, or her maximum bid plus one increment (now higher, thanks to the sliding scale).
- Fifth bid: As a final twist to our scenario, Jack returns via My eBay a day or two later and finds himself to have been outbid by Ted. Having a sudden desire to splurge, Jack decides he's willing to spend more and enters a bid of $1000.00, just to be on the safe side. Because Jack's new bid is higher than Ted's maximum, Jack becomes the high bidder once again at a current bid of $50.49, or Ted's maximum $49.49 plus one bid increment. A day later the auction closes with no additional bids. Jack wins at $50.49, which he promptly pays, along with shipping, only to find when the item arrives that it is larger than the glass banana case he was going to put it in. Nonetheless, he leaves the seller positive feedback and the transaction is complete.
From following along with this scenario, you should note two things. First, though maximum bids are encouraged, Jack and all eBay members are free to bid multiple times on the same auction. Second, though Jack's final maximum bid was $1000.00, he didn't pay anywhere near that, since the next highest bidder was only willing to pay $49.49—meaning that jack paid the next highest bidder's maximum plus one bid increment.
If after following along you're still a little unclear on the bidding process at eBay, read eBay's own tutorial on proxy bidding for additional details.
