Can a seller advertise and sell products he doesn't have? (orders them in once the auction has finished)

[robbopod]

I bought multiples of the same product (5) the seller sends me one, when I complain he tells me  his supplier has run out and he

will refund the balance - Is this allowed in E-bay? I thought you

had to actually have the product BEFORE you sold it

Thanks in advance,

Rob