Stay up to date with the latest headlines via email.
I made $14 selling my used panties on eBay. See, I got curious about the "panty people," as I've dubbed them, who pawn off their worn undergarments in the adult section of the online auction house. So I joined the ranks of auctioneers one morning to see how it all worked and who -- if anyone -- would actually cough up hard-earned cash for my old undies. Turns out, not too many. But other panty peddlers were more successful. Six hundred and one this day, to be exact -- more than the Grateful Dead Beanie Bear and A-Team action-figure hawkers combined. And used lingerie is just one of thousands of adult products being flogged on eBay each day.Beneath the squeaky-clean veneer of the Web site that set out in 1995 with the wholesome intention of unloading Pez dispensers lies a thriving multimillion-dollar backroom business in off-color merchandise. While eBay insists that adult sales represent less than 1 percent of its overall transactions, online porn and auction experts put the percentage higher, somewhere between 1 percent and 5 percent. With eBay's gross revenue at roughly $2.8 billion a year, that means up to $140 million in extra cash from Hello Kitty vibrators, remote-control butt plugs and the like."If [the adult section] were a Web site alone, it would be considered quite successful, judging from the amount of activity it gets," says Mark Dodd, co-founder of AuctionWatch, a company that tracks online auctions.EBay denies actively facilitating the adult section's growth. Dan MacKeigan, a senior Internet analyst at Friedman, Billings, Ramsey & Co. Inc. who has shadowed eBay closely, believes the company is embarrassed by its adult site. "Especially now that they have a partnership with Disney," he says, referring to the co-branded site eBay.go.com announced February 8 as a way to auction Disney merchandise. "They don't make [adult merchandise] easy to find."Still, eBay certainly hasn't overlooked the fiscal promise of its X-rated category. Offerings are expanding so fast, many sellers report doubling their profits yearly. And while these sales haven't exactly rocked the porn industry, Frederick S. Lane, author of Obscene Profits, a study of pornography in the cyber age, feels eBay is quickly displacing adult bookstores as the favored spot to buy used men's magazines. Lane also notes that eBay is part of the broader $2 billion adult e-commerce boom that "has wiped out at least half of the existing adult mail-order sales over the last three years."EBay points out that the company maintains taste standards (used undergarments must be washed and stain-free) and keeps children away by requiring a credit card to access adult auctions. But with 10.35 million different visitors monthly, according to Media Metrix (the leading Internet-use tracking firm), eBay staff concedes it's near impossible to monitor all auctions. Nor would a company that bills itself as "the world's leading person-to-person online trading community" want to play Big Brother, preferring to rely on customer complaints to police the action. "We have 4,300 categories and half a million items added daily. We can't possibly monitor every item," says eBay spokesman Kevin Pursglove. "And we don't want to. The idea is to have the users manage the system."But, as one marketing director at an established adult-video distributor puts it: eBay has "become so large, it's impossible to police. Once you learn the tricks of the trade, you can get away with a lot." And so the little "adult suburb," to some extent, is running itself, and users are making -- and breaking -- the rules.Sexually explicit material has always appeared on eBay, where the anonymous, voyeuristic nature of the Net has long been recognized as the ideal incubator for porn. But whereas it used to be the stray collector's edition of Playboy or autographed porn-star head shot floating out there in cyberspace alongside antique violin strings and baseball cards, adult sales by 1997 had grown large enough to warrant their own online "room." EBay senior PR manager Kristin Seuell says the reasoning was that a separate division would "provide a secure category to sell this type of merchandise with a gateway, where minors can't enter." Pursglove adds that the decision was made entirely in response to user complaints. "It was an ongoing community discussion," he stresses.Dave Michaels, senior editor of talk ingblue.com, an online magazine about the adult entertainment industry, is also known as "Porno Dave" on eBay, where he was one of the first people to sell autographed erotic photos. Michaels says he was instrumental in those early discussions by helping eBay locate objectionable material whose existence had escaped the company's eye. "I worked closely with eBay for about two months, sending them hundreds of pages I researched with items that wouldn't be allowed anywhere else on the planet: body parts, vials of semen, underwear with feces on it. They ended up creating ... what you see now."Pursglove doesn't remember Michaels specifically, but says: "I don't doubt it -- [that process] illustrates how a good number of policies on eBay developed. Especially in the early days, when we were smaller."Today, eBay's little red-light cyberdistrict draws everyone from amateurs to adult-video stores to Video Age, Inc. and Vivid Video, the leading producer of adult films. Many of the bigger players sell discounted products under pseudonyms. Other companies, such as Danni's Hard Drive and Seymore Butts, have caught on and are considering eBay as an auction venue.With an inventory of 36,562 items last time I checked, merchandise runs the gamut: books, magazines and videos (from the supposedly homemade "My drunk ex-wife naked on tape" to slicker professional porn or videos advertising "imported, nasty, hardcore" images). There is clothing, there are sex toys, even odd paraphernalia like pheromone oil concentrate ("attracts women like magic!") and curiosities such as the "automatic pussy machine" (boasting "no partner needed"). One woman, "Mistress Andria, Dominatrix," was last seen auctioning off a slot for a sex slave. And then there are those airing -- or in this case selling -- their dirty laundry.To find out more about who was stocking, and sampling, eBay's adult cyber shelves, I decided to join the sellers. Logging on with a fake user name and a free, anonymous e-mail account ("pntygrl"), I scanned in photos of my underwear and provided credit-card info, and my three-day auction was up and running. I held my breath and waited, as if a bidding war would suddenly burst forth onscreen over my cotton briefs. But nothing. I checked back hourly, but still, nothing. And silly as it was, each time the boldface zero popped up beside my auction, I felt a tinge of insult. Perhaps it was the competition, I placated myself -- just look at them.Other sellers featured glossy, professional color shots of slinky women in risqu* positions modeling their wares. My auction sported a slightly blurry, crooked photo of my underwear lying neatly on a chair. And the others, they had themes: "Stewardess' Panties," "Used Prom Panties." I hadn't thought "Journalist's Panties" sounded all that enticing, so I had gone with something standard, like "soft, white" in the description box. One prospective bidder e-mailed me: "Maybe you could put a little more info in your description? Makes me curious what your body is like." Fine, don't bid then.Luke Ford, whose porn-gossip Web site has earned him the title "the Matt Drudge of pornography," reassured me over the phone that many of the underwear sellers are, in fact, professional entertainers. "Tons of porn stars are making their living that way," he says. "They make thousands of dollars a month selling personal belongings and funneling people to their own sites." Dave Michaels agrees, adding, "Not many are 'students/amateurs' like they say. That's part of the fantasy."Indeed, it's all about the fantasy. Jenna Jameson, the current "it girl" in porn, uses eBay to sell -- among other things -- audiotapes she records to order for winning bidders. "I'll act as if I'm having sex with them and say their name ... or talk about my feet -- whatever they want," she says of the tapes, which go for $1,000 to $2,000 a piece. "But it pays my rent -- and I have a very big house."Other adult businesses push the illusion further. Many used-lingerie auctions I stumbled across turned out to be small cottage industries operating behind a fake composite character ("18-year-old-student-who-needs-cash-for-books"). One seller, "Sarah," was actually a couple; the man and woman (who requested anonymity) provided sophisticated order forms allowing buyers to customize purchases (dotted/cotton/full-back? red/satin/thong?) They also invited customers to personalize fantasies by instructing "Sarah" what to do in the underwear before mailing.Lane, the online-porn researcher, estimates that only 5 percent of the female adult sites are run by individual women; the rest of the panty ladies are marketing fictions devised by "cyber pimps."Arsalan Arif, an economics major at George Washington University by day, says he's the biggest adult-CD-ROM distributor on eBay, with 40 to 50 auctions up at a time. ("I have two employees, and all they do all day is sit there and monitor other people's auctions, so we know.") What started in an upstairs bedroom of his parents' house in Wichita, Kansas, during winter break is now a bona fide business incorporated under the name of S&I Records."We gross $9,000 to $10,000 a month. My primary job used to be asking my parents for money," he says. "Now I'm able to pay my own tuition."Arif says that in just the last few months, he's watched eBay's adult section shoot up. "There used to be four parts to it -- CD, DVD, Photographic and Video. Now there are, like, 17," broken down into specialized categories such as Adult Figurines, Nude Animation, Pinups and Post Cards.Due to loose policing policies, Dodd explains, adult sellers frequently slip around eBay's rules. "Most of it is legal, but there's the occasional questionable video with underage actors," he says.Dodd also says it's common to find professionals using eBay as a hook to woo bidders to their own porn sites. In such cases, sellers list just one item on eBay. But inside their auction description, they'll mention that the goods are available immediately on their personal Web sites should the buyer not want to wait five days for the auction to run its course. By getting people to click over, the sellers avoid eBay's commission prices."EBay's listing fees are so low -- 25 cents -- it's worthwhile to use it as advertising," Dodd says. "And on the off chance you sell something, it's great."One dominatrix e-mailed me that she uses this approach to lure people to the S&M dungeon she runs in NYC. (To avoid eBay's wrath, she also requested anonymity.) "I use [eBay] more as a way to get information to people than actual selling," she says. "It's a cheap way to do that, and I link to other Web sites."And this is just one way sellers take advantage of eBay's self-policed cyberuniverse. Most panty auctions had a "cleaned per eBay standards" disclaimer. But I was told repeatedly, in phone interviews with eBay members, that once the auction is over, buyer and seller make their own arrangements. As one eBay merchant, "misterhoward," put it, "If you're paying $60 or more for a pair of underwear, do you really want them cleaned? I'm confident that there is not one seller on eBay who sells panties/underwear/jockstraps, where there are suggestive pics, who cleans them before mailing."Another panty fetishist e-mailed me: "I took a gamble and bought some panties from this one girl's Web site. They arrived wet, smelly and with a few stray hairs. I was quite happy.""There's a tremendous amount of overall trust and honesty that's built up," eBay's Pursglove says, "and with that, a high level of community expectation. So it's up to the users to tell us [about violations]." Still, he admits: "We're like a large city ... with people operating on the honor system. Every once in a while you'll find someone who wants to push the envelope. And they risk being removed."Porno Dave has yet to cross that line. But he says many of his competitors sneak adult merchandise into the regular section, to reach customers who don't have credit cards. "They do a quick three-day auction and pull it before eBay sees," he says. "Go to the regular section and type XXX or porn and see what you get."He was right: A quick search yielded 303 results. Granted, there were plenty of Super Bowl XXX posters, but also "Big Boobs Screen Saver SEXY Nude Adult" and "XXX stories from Penthouse magazine."Meanwhile, my own auction had merely hours to go before closing. But still, not a bite. I was relieved -- I had gotten in there and done my research, without ever having to get my hands dirty. But then, with only four minutes to spare, some guy in North Carolina snuck in a bid. I was standing there glaring at my computer screen when the winner e-mailed me a request: "Could you please wear them one last time before you mail them to me?" Suddenly, I developed a feverish attachment to my old Fruit of the Looms. I'd made $14, just enough to buy a fresh pack of panties at Kmart. I'd mail him one of those. But the question remained: How to explain the check -- which read "Panty Girl" -- to the bank teller?