Winning eBay Buyer Strategies
I’ve been buying and even selling on eBay of late and for
those who don’t use eBay much I thought I’d share some buying methods.
eBay Buying Basics (skip if you know)
eBay is an Auction with a fixed duration and ending time
(usually 7 days to the second). The seller
lists a starting price and you place a bid which should be the highest you are
willing to go. eBay will make you the
auction leader for the starting price and the price will go up as others bid
until one of those bids is higher than yours.
When that happens, they are the auction leader at a little more than
your highest bid. Example: If the
starting price was $12.00 and you bid $20.00, you will be the auction leader at
$12.00. If another bidder comes in at
$15.00, the auction will go up to $16.00 and you remain the auction
leader. If the second bidder raises
their bid to $25.00, they would become the auction leader at $1.00 more than
your highest bid, $21.00. If you want to
take over the auction, you will need to outbid $25.00. And remember, nobody knows the others people’s
highest bid.
Two types of bidding strategies: Rational Actors and Last
Second.
If all people bidding in eBay were rational actors, then
each person would decide how much they wanted an item, place that bid and then
the clock ticks down and the highest bidder wins. There would be no advantage to bidding
seconds before the auction ends if the other people have placed their highest
bid. The problem is, many or most people
do not act rational. They don’t put in
their highest bid, but some incremental bid feeling that might help them get a
lower value. In fact, it doesn’t. With
game theory, since your opponents for the auction are not acting rational, you
can gain an advantage by changing your strategy to match.
Rational Actors – Best low stress way to bid
If you are not going to be available to watch the
internet at the end of an auction or if you just don’t want the stress, then
the best method to bid on eBay is as a Rational Actor. Decide what is the maximum you would pay for
an item including shipping costs, add 5% and bid that. Why add 5%?
In my experience, when you lose an auction by $1.00 you feel bummed and
if you win an auction by going that extra $1.00 more you feel smart. Add a little to that maximum bid and if that
helps you win it’s a good feeling. If
you still lose, well it was more than you were comfortable paying. Bid when you see the item and then check back
within 24 hours of the end of auction to see if you won. Be ready to pay within 48 hours as most sellers
request.
Last Second Bidding
If you think that other people will bid on an item and
that other people will bid with less than their maximum bid, then you can gain
an advantage by doing three things: bid only once, bid your maximum and bid in
the last few second. Why does this work?
Your opponents are watching the bids go up and if they stop being auction
leader they will put in a higher amount.
If you wait till less than 10 or even 5 seconds, chances are they do not
have time to raise their bid and that means you will win the auction and for an
amount lower than if your opponent had put in their true maximum. This strategy relies on the idea that many other
eBay bidders don’t put in their true maximum, but put in an incremental amount
and if the price goes over they will enter a higher amount. That is bad strategy you can take advantage
of. Now, watch it in action.
An eBay Win in Action
Check out the Play by Play of this completed Auction. These comics went for $36.09 on 16 bids. If you click on the bid link below, you can
see only 4 bidders.
Here are the steps.
- Bidder #1 (a***b) placed the first bid on Oct 10th for the starting price of $9.99.
- Bidder #2 (s***c) came in on Oct 12th at 2pm and put a maximum bid of $15.09. The took over the auction for $10.49.
- Bidder #1 saw this and bid $10.99 on the 12th at 7:01:29pm and didn’t win, but raised the price to $11.49.
- Bidder #1 bid $11.99 at 7:01:32pm (not enough)
- Bidder #1 bid $12.99 at 7:01:35pm (not enough)
- Bidder #1 bid $13.99 at 7:01:38pm (not enough)
- Bidder #1 bid $14.99 at 7:01:41pm (not enough)
- Bidder #1 bid $15.99 at 7:01:44pm and became the Auction Leader for the amount of $15.59 or 50 cents higher than Bidder #2 had placed.
- At 20 minutes after Midnight on Oct 15th, Bidder #3 (s***e) showed up. They placed a bid of $19.74 and became auction leader for $16.09
- Bidder #1 woke up 6 hours later to see they were no longer auction leader. Damn. So at 6:35:10am they bid $16.59 (not enough)
- Bidder #1 bid $17.59 at 6:35:13am (not enough)
- Then Bidder #1 got mad. At 6:35:23am (they waited 10 second and not 3 this time) they bid $25.00 and became auction leader at the price of $20.24 or 50 cents higher than Bidder #3 bid at step 9. Whew.
- Bidder #3 at 38 minutes after Midnight on Oct 16th noticed they were not the leader anymore and at 00:38:45 placed a bid of $22.94 (not enough)
- Bidder #3 at 00:38:56 placed a bid of $24.94 (not enough). Little did Bidder #3 know that Bidder #1 had a high bid of just 6 cents more.
- Bidder #3 gave up and went to bed with the auction leader still Bidder 1 and the amount was $25.00 or Bidder #1’s highest bid. But wait…
- Bidder #2 who we had not seen since step 2 returned at 7am on Oct 16th and placed a maximum bid of $35.09. They took over the top spot with an auction amount of $26.00 and only 4 hours till the auction ended. We will never know if $35.09 was the highest Bidder #2 would go. We don’t know if Bidder #1 might have gone higher if he had noticed. What did happen?
- Mysterious Bidder #4, never seen before, swooped in with a high bid at 11:24:06 or 7 seconds before the end of auction. eBay does not show how high Bidder #4 would have gone, but since it was me I can tell you I put in my maximum bid of $41.16 and won it for $36.06.
I wanted the 54 comics at $1.00 apiece and with shipping
of $14.51 that meant $39.50. But I added
my 5% and bumped up to $41.16 as I always do.
I made one bid.
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