Ranged attack rolls made with this ammunition have advantage against any creature that doesn't have all its hit points.
Arrows are used with a weapon that has the ammunition property to make a ranged attack. Each time you attack with the weapon, you expend one piece of ammunition. Drawing the ammunition from a quiver, case, or other container is part of the attack (you need a free hand to load a one-handed weapon). At the end of the battle, you can recover half your expended ammunition by taking a minute to search the battlefield.
Arrows are typically stored in a Quiver (bought separately).