How To Bid On eBay

Let me start by saying this isn’t eBay for dummies — you should familiarize yourself with the basic operation of the eBay web site through another resource.  What I hope to provide you with is a rational for how to bid successfully on eBay to enable you to purchase items at a fair price.

Let me start by prefixing all of this with the statement that what eBay has tried to do is create the feel of the type of auction commonly refereed to as an “Open Ascending-bid Auction”, also known as an “English Auction” — though they have modified it slightly to have a time limit rather than just go until their are no more bidders.  You can read many resources on auction types if you’re interested; there’s actually a body of game-theory that covers auctions for those so inclined.

Before we digress too far off topic…

First you need a little background on how eBay’s proxy bidding works, and an understanding that if everyone were to just enter in the actual price they were willing to pay when they first bid that would be all you’d need.

What happens on eBay when you enter a bid is fairly simple — eBay records the maximum amount you’re willing to pay for the item, and then will automatically bid as much as needed to satisfy the bid rules.

So if there are no bids, eBay will place a bid for you equal to the minimum bid set when the auction was created.  If there is already a bid, eBay will place a bid for you equal to the lesser of the maximum you set for your bid or the current amount plus the bid increment (which varies based on the current bid — it increases as the amount of the current bid increases).

If two people were to set the same maximum bid, the person who placed the bid first would be the one to have his bid recorded.

Like I said, if everyone just entered in what they were really willing to pay then that would be it, and when the auction closed the person who was willing to pay the most would win the auction.

But, that’s not how it really works out.

You see, people aren’t always honest (even with themselves), and people like to play games (even with themselves), and people always like to get a steal (or read that as great deal if you like)… and of course, people are emotional (so they get caught up on the splendor of the train ride — even when it’s clearly going to wreck).

So, what many people do is record a bid for the amount that they’d really like to get the item for — even though they are willing to pay (significantly) more.  That means that lots of people are continually upping their bid as they get outbid, and because they see other people “wanting” the item, they get caught up in a frenzy that they often loose control of… and end up paying more than they actually are comfortable with.

Remember, no one forces you to keep bidding — and no one forces you to watch the train you’re on slam head on into another (in fact, you’re free to jump off).

If you’re head is spinning — or you’re saying that I would never do that (many call that doing the back-stroke in that famous river in Egypt — d-Nile, or denial if you like) then you’re just an average Joe trying to win an auction on eBay.

I’m not here to slap anyone on their wrist; if you want entertainment, excitement, need to fill your copious amounts of free time, and don’t mind spending more than you’re comfortable with — by all means, keep getting caught up in the emotions of “winning” a bidding war; but if you’re just looking to get things you want/need at a reasonable price — read on.

How to bid on eBay…

You could use eBay exactly as it’s designed.  Just place an initial bid for exactly what you’re willing to pay for the item and be done with it.  Don’t watch the auction, don’t enter in any more bids… be content with your honesty (and do something more useful with your time).  But you’re not going to win very many auctions — in fact you’re probably just going to fuel the fire because of the interactions of eBay’s proxy bidding and people who have got caught up in the frenzy of bidding.

So how to bid on eBay successfully…

The answer is easy, you snipe.  Basically sniping the auction turns the English Auction into something more resembling a First-Price Sealed-Bid auction (at least from your view point).

Wait, what is a snipe?

Well, a snipe is a bid placed at the last moment.  Sniping basically allows you to place the bid you would have right away at the very end of the auction, giving other bidders no time to respond to your bid — and forcing the eBay proxy system to do it’s job without creating a frenzy of bid-and-re-bid.

There’s nothing wrong with sniping; in fact all you’re doing by sniping helping prevent other bidders from getting carried away with bidding.  It doesn’t make it any more likely that you’re going to get an item (if there are wild bidders — they may have driven the item up well beyond what you’re willing to pay long before the last few seconds of the auction).  And the number one thing it will do for you is prevent you from getting caught up in the bidding war and paying more for an item that you’re interested in.

You can bid by hand; just open up the auction; actually open up two copies of the auction, one to watch the count down clock, and in the other enter the maximum amount you’re willing to pay and click to the confirm dialog.  When the count down timer reaches under 10 seconds, submit your bid (you may need to submit earlier if you have a slow connection — and you may be able to time it to less than 10 seconds if you have a very fast connect — but remember as long as the amount of time left is less than the reaction time of a human being you’re not going to be fueling the frenzy).

Obviously sniping by hand is tedious and time consuming… so there’s automation to help you out.

JBidwatcher is a Java based tool that you can run on Windows, OS-X, or Linux desktop (or server) that will attempt to snipe auctions for you from your local machine.  Which means you need a stable internet connection and you computer has to be on and JBidwatcher has to be running.  It’s totally free, and works fairly well.

GIXEN.COM is a web based system.  It’s totally free, and works fairly well.  There is no limit to the number of auctions you can snipe; but there is a $6 per year upgrade that will give you redundant servers to place your bids (decreasing the chance of not getting you snipe in).

There are also a number of other systems that charge — perhaps they’re better, perhaps they’re not… but these two certainly work well enough for you to use to develop an understanding of how to effectively bid on eBay.

While I’m giving you the 4-1-1 on sniping, I should mention that there are two basic types of snipes — individual item snipes and group (also called multi) snipes.

In an individual item snipe it’s easy to understand — you enter a bid for the item in question and your bid is placed a specified number of seconds before the auction closes.  If you have the highest bid at the end you win, if you don’t you don’t — and it’s over and done.

In a group snipe you actually bid on a series of items (generally related — but I guess you might also use it for budget constraints).  You enter a separate bid for each item of interest in the group.  The sniping system will place your bid on the first item — if you win, it cancels all the remaining snipes in the group; if you don’t win, it goes on to the next item in the group.

With group snipes you have to be careful that there is sufficient time between the ending time of two auctions for items of interest for the sniping system to handle it (most systems will flag auctions that may be a problem and allow you to decide if you want to take the potential risk of winning both… obviously that’s a bigger deal than missing the second).

Also, most sniping systems let you have as many individual snipes or group snipes as you want (you have to be careful not to have the same item in an individual snipe and a group; or in multiple groups).

Also, most sniping systems will handle auctions that have multiple items available (in other words, it will place a bid for the amount and quantity — eBay’s proxy bid does most of the work).

Sniping might seem like it’s a lot of work; but actually it makes bidding easier in the long run, and more effective.

Remember, if you don’t win an auction sniping it’s not (generally) because the sniping system didn’t do it’s job — it’s simply because you weren’t willing to pay as much as someone else… in fact by sniping you’re increasing your chances of winning an auction at the price you’re willing to pay.


Let me remind everyone that I am not a fan of eBay / PayPal — I consider them companies of questionable ethics at best.



eBay Sniper

http://www.gixen.com/

eBay Sniper
http://www.jbidwatcher.com/

Originally posted 2010-10-08 02:00:32.