The Proxy Bidding System
Basically, all this means is that you tell eBid the most you are willing to pay for an item [your "maximum bid"], and then eBid automatically places your bids for you. In a live "public" auction, each bidder must constantly place new bids each time they are outbid by someone else. This works fine when all the bidders are together in the same room, but online it's works a little different.
With the proxy bidding system, all you have to do is enter your maximum bid -- the most you would ever be willing to pay for an item. Bidding is done in automatic increments which increase as the current price increases - usually in the range of one to thirty dollars. Let's say the minimum bid on an item is $50 and you enter a maximum bid of $100. If there are no other current bidders on the item, the proxy system will enter your bid at $50. If somebody later comes along and bids $75, the proxy system will automatically increase your bid to $78.00 [the current bid plus the required minimum increment of $3.00] and will tell that other bidder that they have been outbid. If more people place bids, the proxy system will continue to place bids for you until the bid amount reaches your stated maximum [in this case, $100].
Remember, though, that other bidders also have maximum bids! If you enter a maximum bid that is less than somebody else's, you will be the one who will be told "You have been Outbid"!
It's also important to remember that the "minimum bid increment" only applies to the current high bid and has nothing to do with your hidden "proxy" or maximum bid. For example, let's say you have placed a maximum bid of $125 on an item, but the current high bid is only at $50. The minimum bid increment of $2.00 simply means that another bidder has to bid at least $52 to place a valid bid ... but they will still be outbid at this point. But what happens if that bidder decided to place a bid of $125.01? Well, since his maximum bid is higher than your maximum bid, the other bidder would win by a penny. His maximum bid doesn't have to be the minimum bid increment over your maximum bid -- it only has to be the minimum bid increment over the current high bid showing. This happens all the time, and is one of the reasons I recommend that you NEVER bid easy to guess round numbers like $125. If you think an item is worth $125, bid something like $127.59 instead. That makes it harder to guess, and you are less likely to be outbid by a penny.