Online auction sites can either be commercial or person-to-person. In a commercial site, buyers compete with one another to buy goods that are owned and stored by a company. A person-to-person auction site however, only acts as a go-between for buyer to seller. The winning bidder and the seller are free to make their own arrangements to complete their transaction privately.

Bidding procedures are not all the same. There are auction sites that will allow a prospective buyer to bid and just inform him/her if the bid is accepted. Reverse auctions are entirely different as the prices go down until someone eventually buys. Some auction sites search for merchants for the price specified by the buyer. Others pool buyers to search out the best deal from merchants.