I buy most of my fabric on ebay and have never had an issue. I have several sellers that I frequent the most but am always willing to try someone new. I always, always review their feedback before making a purchase.
While I love LQS I find I can get excellent prices in the ebay auctions. I just put things I'm interested in purchasing on my watch list. If the price is low enough I'll bid. I often get things like 15 FQs for about $18.00 including the shipping. I only purchase top quality fabric too such as Moda, RJR, Michael Miller etc...
I purchase pre-cuts as well as yardage. I'm a big fan of ebay. Hope that helps!