I think this is as good a place for this post as any. If not, the mods will move it to a more appropriate location.

I get phone calls and e-mails just about every day from various friends who have spotted a set of cups or some other gem on eBay. It will be for an auction that has about a week left to run, and they will say, "It's really not expensive at all. I think I'll buy it." So, they make a bid. And later, someone outbids them and wins the item.

So, here's the reality check.

Unless there is a "Buy it Now" price on an item on eBay, the opening bid has NOTHING to do with what the item will eventually sell for. This is particularly true of reserve price auctions. If you make a bid, and the item comes back with "reserve not yet met," you still have a ways to go.

There aren't that many bargains on eBay anymore.

Another popular misconception is this one: "I keep bidding on this item, but someone always outbids me right away."

The person who keeps outbidding you has placed a rather high bid on the item. EBay uses "proxy bidding." It's as if you were on a live auction site, and you have told the floor bidder that you will bid up to $1000.00 on a particular lot. Another person comes in and bids $50. Immediately, the floor bidder will bid $51.00. This will continue until one or the other of you runs out of money or patience.

If you want to win an item, figure out how much it should cost you and bid that amount. You will either get it or not. If you get it, you may not pay your limit for it. If you don't, you won't pay anything.

Bill is absolutely correct. Bidding on eBay anymore is an art. I hate two things on eBay, and one is the "reserve price". I never bid on anything with a reserve. I usually contact the seller and ask them to just tell me what they want to get for their item, so we do not have to play this "bidding" game.
I also do not like the "proxy", or I believe it is called "skipe".
As Bill stated, bid the amount you want to spend on an item and leave it. If you win it, fine. Do NOT get caught up in the bidding war, it is addictive!
Rennie

All bids on eBay are proxy bids. A proxy bid consists of placing the highest amount you are willing to pay for an object on the item, then the bidding software registers that bid as one bidding unit over the highest present bid. For example, let's say that there is a set of Paul Fox cups on eBay with a starting bid of $150.00. If you are willing to pay $350 for them, you place a $350 bid on them.

However, eBay won't post that as a $350 bid. They post it (on a starting bid with 0 bidders) as a $150 bid. If someone else has posted a $150 bid, and you bid $350, then eBay will register your bid as $151.00 (assuming a $1.00 bid increment).

But when you look at an item with a $150 bid on it, you really don't know what the original bid amount was. Let's say that the fellow who placed that first bid on the cups knows that they are worth $350. You place a $350 bid on them. His bid will increase to $350. If he has placed a $250 bid on them, your initial bid will be $251.

That's eBay's software that does it, not your bidding.

That is different from "sniping," which is a tricky game, but is an inherent part of eBay. It's harder to do now, because there is software that does it for you. And you also don't know who your competition is. I used to be able to tell by the names of the competing bidders roughly what the top bid they were going to place on an item was. I would run two instances of the item using two separate browsers. One would be primed with a HUGE sniping bid. The other would simply be following the auction. At 3 seconds before the auction was over, I would place my snipe bid, so it confirmed 2 seconds before the auction was done.

Why that interval? That's a secret.

Now you may ask, why wait so long to place the big bid? There were several reasons. One was that if I placed a big bid on a item on the first day, then the other guy would have a chance to bid the price up. By waiting until the last seconds, I could get the item at a lower price.

Usually.

But that's the game.

BTW, reserve prices make more sense than you think, especially in a bad economy.

Here's why. People expect things on auction sites to go for low prices. If you want purchasers to bid on items, you need to create the illusion that they might actually be able to win them. So, if you have, for example, a banjo that retailed for $8,000, and you want $5,000 for it, you don't list it at $5,000. Instead, you set a $5,000 reserve on it and list it at $750. Hopefully, you will start a "feeding frenzy," and you may even get more than you planned for it.

And I NEVER tip anyone to what the reserve on an item is.

I do enjoy the <Make me an offer> on some items where you can (try to) purchase what you want for a reasonable price with some haggling.

I'm both an eBay seller and buyer. When buying, I almost always use sniping software for the reasons Bill explains in his post. As a seller, I would rather people bid early and generate some competition for my items. As a buyer, I would rather compete only with other snipers because if I want something, I'm willing to pay more than market value for it, so my sniping bids are high. The rationale is simple: two out of three times, I end up buying something for less than I dared hope. By putting in higher sniping bids, I'll end up paying more for that third item, but it all balances out to be less than I would have been willing to pay when you add them together.

There is a technique to listing things on eBay. Most people, including sellers, hate this, but you will get the maximum money for your item this way.

First, a little "eBay theory." People generally go to eBay because they are either looking for something they can't easily find on the Internet or so they can get a real bargain on something, usually the latter. In order to get the maximum bux for your item, you need for people to think they can get it cheap and start a "feeding frenzy."

Set a reserve price that is the least you will take for the item. Then, start the item at roughly 1/4 or 1/5 of the reserve. You will usually get your money that way.

I tried this with a complete stranger. The fellow had a Gibson All-America model banjo for sale. These are costly instruments, in the neighborhood of $7500 for a new one (at that time). He put a starting bid of $6000 on it, because that's what he wanted. He didn't get a single nibble.

Near the end of the run of this auction, I PM'ed him and told him I could help him get his money for the instrument. I told him I didn't want anything. I just wanted to prove a point.

His minimum acceptable price was $6000. So, that was his reserve. He started it at $1000. He ended up getting $6500 for the banjo, the second time he listed it.

I used the same idea when I sold my Earl Scruggs Model banjo and my Weber Octave Mandolin. In the case of both instruments, I got more than I paid for them.

My gratitude Mr. Palmer, for yet another insightful commentary. You have clearly earned the cup you wear.

I have always, always, wondered why there was a reserve price at all. In my frustration I would think, "Just give me the frickin' minimum asking price already. Why the game playing?"

And then comes Mr. Palmer with his "making sense" stuff. Now, I understand the logic. I may not like it, but I understand.

Thank ye.

You are welcome. To tell the truth, I don't particularly like it at all. However, I understand it, and that is the key to success.

I don't like the fact that if I walk around in certain parts of Houston after dark I might get hit in the head. So, I don't go to those parts of town after dark.

The "reserve" is really just a psychological trick to make the openign bid look lower.

It annoys me, but I knwo the game.

There are two ways to play an auction as a bidder, both can work, though ebay makes one impossible.

The first strategy is to go in early and high to scare off other potential bidders. Ebay defeats this with their auto-bid system. You can set a high max, but no one will know it til its reached.

The second is to come in late... what is sometimes called sniping. Look for an auction that is ending in less than an hour, look at the current bid and bid a bit above it. If you are auto-trumped then you haven't hit the other bidder's max yet. Keep doing this until you do or until you hit your real max, then walk away.

OR if you can't be bothered do what Bill says for Ebay, and I usually do, which is just decide the most you want to pay,put it in to start, and don't let temptation make you up it nay. Either you get it for your price or it wasn't the right time.

Always remember a few things:
(1) Thanks to the net it is easy to shop refurbished electronics and such so always check those for your baseline price on such things.

(2) Unless it really is a RARE collectible, whatever it is will always show up again. So if the price goes too high for you, just walk away.

I've got tonnes of magic stuff off ebay, from cups to books to antiques to props. I usually wait till the last 5 minutes to bid and my last bid will be placed in the last 15 seconds. I've bid on about 300 items before and have lost only twice.

That shows a fundamental lack of understanding of arithmetic. The opening bid is whatever it is, reserve or no reserve. The only difference is that with a reserve in place, the seller knows what his minimum will be.



A snipe usually occurs within the last 10 seconds of the bidding. Anything earlier than that is very easy to outsnipe.



Be sure to check your discount suppliers for grey market new items as well. Sometimes they are really a good deal. HOWEVER, sometimes "refurbs" and "grey market items" are nothing more than counterfeits.

Um I do (or did) linera algebra for a living Bill, so I'm going to make you justify that claim .

Fact of the matter is that any bid lower then the reserve is meaningless since it cannot win.

I stand by my statement thus that there is no mathematical difference between a "minimum bid" of $1.00 and a reserve of $10.00 and a minimum bid of $10.00.

If you believe you can prove me wrong mathematically, then whip out your math and prove it.



Depends on the auction site and the traffic. I bought my first DVD player dirt cheap by sniping in the last few hours of an electronics auction... on the day Star Wars 4 opened.




Which is a good point and why I only buy "refurbs" directly from the manufacturers site. (I will buy "open box" though from big reputable dealers like Best Buy or Circuit City.) Anyone else selling a "refrubished" and I worry that what Im getting is a bad patched fix.

Ebay is a strange creature.

Sometimes you can bid on item, a great out-of-print book for instance, and for some reason you're the only person who bids on. Sometimes you get it for a bargin price and other times you get it for less than you expected.This happened to me with Life, Death & Other Card Tricks and "Tricks of the Trade".

Before you bid, you have to have an idea of how much you're willing to spend on an item.

If it's something that's really coveted, I always found it's best to wait till the last few seconds.

Many things come up for auction more than once. So, it pays to be patient. You may not get the item the first time, but you might the next and for a better price.

To the poster that wants Bill to prove a negative? Hmmmmm not sure it can be done concerning anything?

The only thing I can really contribute to the conversation is that ever since eBay changed its feedback system it has become harder to sell and or buy. Sellers are leaving for amazon and buyers are finding less of what they want. Even so I think you can still find buys on eBay if you have the time and the patience.

No, it can't be proved at all mathematically. It's a matter of psychology, that's all.

A mathematician will see his world in the narrow framework of numbers. He may miss the big picture because sometimes you can't make numbers work out easily. Or he may miss an obvious solution to a simple mathematical problem.

For example, mathematical analyses of music have never taken into account why something sounds good, because there is no way to quantify it mathematically.

I will restate there is no real difference between an opening bid of $1.00 against a reserve bid of $10.00 and a minimum bid of $10.00. The difference is one of perception.

The trick is to find the reserve. How do you do that without making a false bid? You don't. You make a bid, then you discover whether it exceeded the reserve.

What I am saying about sniping refers only to eBay and not to some odd site that might have an overabundance of DVD players. When sites become worthwhile sniping targets, they appear on certain web sites as part of their sniping "vocabulary."

Also beware of cons! It is always best to check the sellers feedbacks! I was taken for over $300 on a magic prop once! At the time, 8 years ago, there was nothing that could be done! The guy ended up doing a clever vanishing act! So be careful with that and be sure to check out feedbacks of sellers!
Regards, Lynchini

Any time I purchase something from overseas, I check the seller's feedback very closely. I've only been stung once, so far.

That was by an American magic dealer, who does not advertise on this forum. He listed an item that looked a bit too good to be true. I called his number and got a "helper," who assured me that the item was as described. I bought it, and it was not as described at all. I returned it after notifying him of same. I never got a refund or the correct replacement.

By the time the smoke had cleared, I had waited too long to pursue a case on PayPal.

I start all my ebay auctions at £1 with no reserve and it works a treat! Only once did I feel somebody got a real bargain but it was kinda cool when the lady turned up to collect a table and six chairs for a £1! I think she thought I would try and wriggle out of it, but I honour all my eBay transactions, I mostly feel like I'm the hustler!

I suppose you quit doing it for a living, because you couldn't spell "linear algebra."

"Too yeers ago, I cutn evin spel matematickian, an now I are won!"

Posted: Jul 29, 2011 4:08am
Last night I went on eBay to purchase a rather expensive accessory for one of my rifles. (Ebay may not be the only kind of "sniping" I do! ) I discovered a plethora of extremely inexpensive imitations of these particular accessories, all made overseas. Some even had the legitimate manufacturer's logo on them.

In disgust, I went to Amazon.com, figuring that there would be no such hanky panky there.

WAS I WRONG!!!

They were calling outright counterfeit products "clones." One seller actually reviewed one of the clones, said it was as good as any of the genuine ones, and 'lowed as he was going to start selling them. His web site was even a "clone" of the manufacturer's web site.

Go figure.

Regarding "make an offer" bids -- usually these indicate that the person who is trying to sell the item isn't sure what the market value is. If you see something that is going for a price that is definitely higher than market value, and there is a "make offer" option, make an offer. I've done it twice, and succeeded both times. You just have to be reasonable about the offer. Usually 50% of the posted buy it now price is about right.

Thanks for the tip!