What is Proxy Bidding - how does it work? By sir_snipes_alot

Proxy bidding has been described by some as the "heart and soul" of eBay. Since eBay is a 24 hour a day, 7 day a week auction site, it is not possible for bidders to constantly monitor an auction item, and its bidding history.

eBay has developed a bidding system that allows any registered eBay user to place a bid at the maximum amount they are willing to pay for an auction item, but have only enough of the bid amount to used to maintain the bidders lead on the auction item.

Proxy bids are confidential, no one knows the amount of a proxy bid entered into the eBay system. The seller of an auction item is not privy to this information, nor are competing bidders. Only you (and anyone with your password) and the eBay server know what this amount is. You may hear "rumors" that sellers or bidders have special software that discloses this information - this is absolutely not true.

To place a proxy bid, you simply need to determine what the maximum amount you are willing to pay for an auction item is, you then enter this in the bidding box on the auction page and place your bid.

Once you have placed your bid, eBay will then act on your behalf - first they will use enough of your proxy bid to overcome any previous proxy bids by other users. You may note that your bid jumps quite high if another bidder has previously placed a bid on the item - remember they are using a proxy bid too. If your bid is high enough to overcome all previous bids - eBay will establish you as the leading bidder, placing your bid at one bidding increment above the previous high bid. If you have any remaining proxy bid after you have taken the lead - eBay will keep the remainder of your bid hidden, and only use it to fend off another bidder.

Sir Snipes Tip:
To be truly successful on eBay you must stop bidding what you want to win the auction for, and start bidding what you are willing to win the auction for. There is a subtle difference, but it is the difference between winning and losing.