Strategy for buyers on eBay

Introduction

I spent a couple of years gathering piles of useless crap from auction sites that I really didn't need, and in that time I found some very effective tactics for winning auctions with minimal fuss and far less anxiety (and very often, much less money). If you are the type who likes to buy things from eBay, but tend to get outbid at the last second, or want to avoid 'buddy upbidding', or otherwise lose auctions that you would prefer to win, this node will help you win more auctions, and in general save you a lot of money. And on auctions that you don't win, you'll have the childish satisfaction of driving the price of the winner higher than any you would have paid.

In short, you will very likely enjoy your online auction experience more with these simple tips.

Step 1: Opening

Find your auction. Go hunt down some trinket or doo-dad that you just can't live without. Alright, I'll wait... Are you finished yet? Ok, great, now don't bid on it. First, make certain that the end of the auction will occur at a time when you will be both awake and available to spend a few minutes on eBay. Then log in and place it on your watch list. This is gitm's first axiom of auctions: Bid not, lest ye be surely and hopelessly outbid. More often than not, placing an early bid will do nothing but cost you more money if you win the auction.

Step 2: Middlegame

This step is really very simple. Decide what is the maximum price you would comfortably pay for the item in question. I generally use my emotions as a guide. If I think of a price for the item, and I have to think twice, it's too high, or I don't really want the item for sale. Pick a price you are comfortable with and stick with it.

If you are really bored, keep an eye on the items in your watch list. If they go over the price you have set, you can, without any bad feelings, go ahead and remove them from your watch list.

This brings me to my second axiom: Do not ever waver, even a little, from the price you have set. If you can keep from wavering, lost auctions will merely be overpriced, and you can move on to the next with a shrug.

Step 3: Endgame

This is the critical phase of the game. To be most effective, you will want to have access to high speed internet, or if you must use a modem, either turn off images so the page will load quickly, or get a stopwatch that is synchronized with eBay time.

This step can begin as early as an hour before the end of auction, but generally is settled in the last 30 seconds. Start it as early as you like, but make certain you are there for the last 5 minutes.

Fire up two instances of your browser of choice, and arrange them so that you can see the contents of both. Log into eBay on both of them and with one, monitor the actual auction page. With the other, set up your bid using your maximum price. Do not submit the final bid, but keep it one click away. Also bear in mind, this will not set your actual bid, but merely the maximum you will bid. Many times your winning bid goes nowhere near the maximum you have submitted.

There are people who think getting the high bid somewhere in the last hour will guarantee them a win. Sometimes this is true, but very often, it's the person who waits until the very last few seconds that gets it. Remember this: someone may want your item more than you do, and may be willing to pay more, which is why you don't want to give them any opportunity to outbid you.

Hit F5 to reload the page (or observe your stopwatch) regularly once you get into the last minute or so. Sometimes you'll see people with less dedication, or itchy trigger fingers, throwing out bids at 60 seconds or 30 seconds. Unless the bid goes over your maximum price, maintain your resolve and resist the urge to submit your bid.

Wait until you are under 10 seconds (I personally always hit it at 8, just in case I get lag on the submit) and submit your bid. Very often, by the time you reload the auction page, it has ended and you have won. Sometimes you won't win, as the maximum bid of the previous bidder was higher. No sweat, they wanted it more than you. Sometimes someone will bid in the last 3 seconds. Comfort yourself by understanding that they are even more pathetic than you. Most of the time, though, you will win, and you will do so at or below your comfortable price, while avoiding the silliness of trying to 'outbid' (read: overpay) for the item.

The third and final axiom of auctions is this: The one who proves themselves to have the most free time will usually win.

Bidding on eBay, in theory

eBay uses a system called "proxy bidding". The idea is that it works just like having a proxy bidder at a real-life auction. You tell your proxy bidder what your maximum bid is for the item in question. Your proxy (or, in this case, a computer working for eBay) keeps your maximum bid secret from other bidders, but bids against them in the auction, until either you win the auction, or someone outbids your maximum.

Because of this system, auction terminology regarding eBay is slightly different to "real" auctions. Any time you "place a bid" on eBay, what you are really doing is setting a maximum bid, via the proxy. In a real auction, if I bid £1000, then the price of the item goes up to £1000. In an eBay auction, if I "bid" £1000, but the second-highest bid is only £9, then the price of the item only goes up to £10.

For example: A classic Cliff Richard LP is up for auction. I want it, but so do Emma and Bob. The bidding starts at £1.

TenMinJoe bids £10:
Current price: £1: TenMinJoe winning the auction.

So, at this point, I am winning - I have set my maximum at £10, and the proxy bidder has bid £1 on my behalf.

Emma bids £5:
Current price: £6: TenMinJoe winning the auction.

Emma sets her maximum bid at £5; eBay's computers compare it to my maximum bid, and mine is higher, so the effect is that my proxy bids £6, to out-bid Emma's maximum.

Bob bids £15:
Current price: £11: Bob winning the auction.

Here comes a new challenger! Bob is prepared to pay up to £15 for the LP. The current price rises to £11, above my maximum of £10, and Bob is now winning the auction.

Auction ends:
Current price: £11: Bob wins the auction.

With no further bids, Bob wins the auction. Even though he was prepared to pay up to £15, he only pays £11, because that was all it took to beat the second-highest bid.

So, it seems simple, right? Everyone tells eBay their maximum bid, and the system calculates who wins. Easy.

Bidding on eBay, in reality

The thing is, it's not as simple as that in real life. eBay want to maximise the closing price of an auction, both to encourage sellers, and to increase their own cut. So, they allow you to bid multiple times on the same auction.

In theory, you would never need to, because you told the proxy the maximum you were prepared to pay, the first time you bid, right? The reality is that many, many people don't. Either people don't understand how the proxy bidding works, or they aren't really sure how much they want the item until they find out they can't have it.

Here's a more realistic example. The rare My Little Pony unicorn set goes up for auction:

TenMinJoe bids £10:
Current price: £1: TenMinJoe winning the auction.

It's for my sister, alright? As before, I have set my maximum at £10, and the proxy bidder has bid £1 on my behalf.

Emma bids £5:
Current price: £6: TenMinJoe winning the auction.

Emma sets her maximum bid at £5; eBay's computers compare it to my maximum bid, and mine is higher, so the effect is that my proxy bids £6, to out-bid Emma's maximum.

"Golly!" thinks Emma to herself. "I really thought £5 would be enough, but I'm still not winning the auction. I guess I could afford to spend £7."

Emma bids £7:
Current price: £8: TenMinJoe winning the auction.

"Goddammit!" cries Emma. "I never had the unicorn set when I was a kid and I'm damned well going to own it now! Stupid Nancy Fairbrass had one and she was a BITCH!"

Emma bids £8:
Current price: £9: TenMinJoe winning the auction.

Emma bids £9:
Current price: £10: TenMinJoe winning the auction.

Emma bids £10:
Current price: £10: TenMinJoe winning the auction.

At this point, my maximum bid takes precedence over Emma's, because it was placed first, but the fact that the price hasn't gone up is a dead giveaway to Emma that she's hit my maximum, and so:

Emma bids £11:
Current price: £11: Emma winning the auction.

"Hah!" says Emma, and goes to bed happy.

A day later the auction is still running, and Bob comes across it. (Bob doesn't have a sister, he just loves unicorns.)

Bob bids £15:
Current price: £12: Bob winning the auction.

Emma gets an email from eBay. "Don't let this item get away! You were WINNING, but now you are LOSING, you don't want to be a LOSER do you? Bid MORE!"

Emma bids £20:
Current price: £16: Emma winning the auction.

Auction ends:
Current price: £16: Emma wins the auction.

Sniping

On eBay, to "snipe" is to place a bid at the very last second, before the auction closes. This increases your chances of winning the auction, and you are likely to pay less.

When I advocate auction sniping to people, they often say "What's the point? I just bid my maximum bid right away, and the proxy bidding system takes care of it. If someone else eventually wins the auction, they were prepared to pay more, so I wouldn't have won anyway."

The thing is, these people, bless them, are living in a fantasy land where everyone is just as rational as they are. In fact, eBay is full of people like Emma. Almost any auction you care to look at will show at least one bidder who bid multiple times.

It makes sense to optimise your eBay strategy to work against the people you will really be bidding against, not against imaginary perfectly logical beings.

How sniping works

Let's replay the My Little Pony auction, but this time, both Bob and I save our bids until the closing seconds of the auction.

Emma bids £5:
Current price: £1: Emma winning the auction.

"Great!" thinks Emma, and goes to bed.

A day later, in the closing seconds of the auction:

TenMinJoe bids £10:
Current price: £6: TenMinJoe winning the auction.

Bob bids £15:
Current price: £11: Bob winning the auction.

Auction ends:
Current price: £11: Bob wins the auction.

This time, not only did Bob win the auction instead of Emma, the final price was also lower.

Sniping works by not giving Emma a chance to reconsider her bid, and to realise that owning the unicorn set at last will mean she finally gets one over on Nancy Fairbrass. Emma's repeated bids are all based on feedback she gets, feedback that tells her that she's not going to win the auction unless she bids more.

It's true that if she had simply set her maximum of £20 right at the start, she would have won the auction, but she didn't, and many, many other people are just the same.

Disadvantages of sniping

As mentioned earlier, in the case of two identical maximum bids, the earlier bid wins. In the unlikely event that your last-second bid is exactly the same as someone who bid days ago, they'll win. This has never happened to me.

If for some reason you (or whatever tool you might be using to snipe - see below) cannot contact the eBay website when it's time to snipe, obviously you cannot win the auction. This hasn't happened to me either, yet.

Be aware that it's much easier for a seller to cancel an auction if there are no bids. If you intend to snipe an auction which currently has no bids, it may be wise to place a small bid at once, just to ensure the item remains available for you to snipe later.¹

How to snipe

There are three ways.

Manual sniping

You have to set an alarm, or something, to remind yourself to be in front of a computer when the auction is closing, and then you simply bid yourself with 30 seconds or so to go. Exciting, but not always terribly convenient. If this isn't practical, bear in mind that simply bidding as late as you can is still an improvement over bidding at once. If you bid with, say, 12 hours to go, there's a decent chance that Emma won't check her e-mail during that time and find out that she's been outbid. It's still much better than bidding with 5 days left on the auction.

Sniping website

This is the method I use. However, I admit that it's, in principle, a terrible security risk, because you have to give your eBay password out to some third-party website in order that they can bid on your behalf. I'm prepared to take that risk (because my Dad had been using the same site for a year before I started using it), but you should seriously consider the risk of having your login stolen. The site I use is "AuctionStealer" (ominous name, now I look at it), but, again, think hard about whether it's a good idea.

AuctionStealer, and, I imagine, other such websites, offer you two or three free "snipes" per week, but then charge you a subscription fee if you want to use it more than that. (Just how much junk are you buying on eBay, anyway?).

Sniping software

So that you don't have to give your password to a website, you can use software which runs on your own computer. Of course, your computer has to be online when the auction ends, and you still have to give your password to the software. Can you trust the software? You really have to make that call yourself.

The morality of sniping

"Sniping seems kind of nasty - shouldn't I let everyone else have a chance to raise their bid?"

The hell with that, if they're not smart enough to understand proxy bidding they don't DESERVE the My Little Pony unicorn set.

¹If you make a placeholder bid like this, remember that you did so, otherwise you may go off and bid on a similar item and end up with, say, two digital TV tuner cards, when you only needed one. Just, you know, for example.