What to avoid on eBay—and what's still worth shopping for on the venerable auction site.

EBay doesn't know what to do with itself. The company made it big by hosting online auctions, but now auctions are passé —people want to buy stuff quickly, and waiting several days to find out whether you won that Hello Kitty contact lens case can be a drag. Over the last few years, rivals like Amazon have expanded into electronics and apparel and every other retail category, and eBay has seen its growth stall.   Now John Donahoe, eBay's CEO, says he'd like the site to become a kind of online Costco —a place where "the inventory is somewhat fluid, but everything they've got is a great deal."* He wants more sellers to ditch weeklong auctions in favor of fixed-price listings, and he's aiming to get people to sell commodity items like computers and electronics for deep discounts.

EBay's predicament got me thinking about my own history with the site. I used to be an eBay fiend—whenever I needed something, I'd look there first, and I'd usually get a good deal. But I gradually soured on the site. I had a few bad experiences—I bought a monitor that never arrived, for one—but it also grew to be a hassle. Every eBay purchase requires an investigation—you've got to make sure the seller is on the level, you've got to make sure his return policy is reasonable, you've got to be on the lookout for exorbitant shipping costs and other fine print. It was a headache, and I found it much easier to look for discounts on Amazon or Google's product search engine.

But eBay is still useful for certain kinds of items. Here's my hit list, the categories in which eBay still beats its rivals. Below that, I'll run through the products you should never shop for on eBay.

Used computers: If you choose wisely, a computer that's a few months to a year old will serve you just as well as a new machine—and it'll save you a bundle, too. EBay is the best place to find such deals. The site teems with computer resellers who buy old machines and fix them up, and there are also lots of ordinary people looking to get rid of their computers because they're moving on to something better.

Here's my strategy for finding a bargain on a pre-owned computer: First, pick a new machine you like. Go to Dell, Apple, or another favorite manufacturer's online store and price out the whole thing—plug in all your hardware and software requirements, calculate tax and shipping, and proceed all the way to the checkout screen. Then, just before you press "Buy," head over to eBay, click the laptop or desktop category, and select the same specs. Also, click "Used." Chances are you'll find the same machine—or maybe an even better one—for a lot less than the new one you just priced out.

Because the computer isn't new, it won't be perfect. Make sure to read the listing carefully in search of any defects—and remember that if you're OK with some slight cosmetic blemishes, you'll get an even better deal. Some sellers call their machines "refurbished" instead of "used"; these are usually old computers dressed up with new parts, and in my experience they run pretty well. Also, pay attention to what the computer is missing. Some resellers don't include original CDs or user's manuals, and if those are important to you, don't buy.

All this work pays off. Take a look at eBay's completed auctions to see how much you can save by buying used: If you bought a 15-inch Inspiron laptop with a dual-core processor from Dell, you'd pay at least $500; on eBay, similar machines have sold for less than $400. Purchased new, Lenovo's T400 Thinkpad series starts at $749, but used models can be had for less than $500.

Apple fans are also in luck. Macs have higher resale value than PCs—there's only one manufacturer and lots of potential customers—but I've noticed that Mac users tend to take good care of their machines, too, so a year-old Apple can still look brand new. You'll get an especially good deal if you're willing to buy an older model just after a new one has come out. Apple introduced a new 17-inch MacBook Pro earlier this year; it sells for $2,799. On eBay, you can find last year's 17-inch MacBook Pro going for less than $1,700.

Electronics: You can use eBay to buy new iPods, iPhones, cameras, and GPS devices in the same way you'd use it for computers. Find the new model you like first, then search for a used model on eBay—and buy it at a discount. But for gadgets, eBay is handier when you're selling. Say you've got an 8GB iPod Touch but find yourself needing more room? Unload your iPod on eBay—if it's in good condition, you'll recover three-quarters or more of what you paid for it, enough for a down payment on your new music player.

Designer and brand-name clothes: Shopping at outlet stores is a hassle. You drive miles to find the best ones, and when you finally get there you're forced to spend hours sorting through piles of last-season's styles to find something you like. eBay automates outlet shopping. Deal-hunters from all over the country go out and buy up outlet merchandise, then they put it up for sale without much markup.