# If you Bid on EBay, check this out...



## Semper Fidelis (Jul 8, 2007)

I learned a while back that the best way to ensure you get an item you want is to bid at the very last few seconds before an item closes. The problem is with time zones and "forgetfulness". I was recently reading about EBay bidding services and found one that is recommended by PC Magazine and others. Vist Auction Sniper.

The "drawback" is that it costs about 1% of your auction price which means 10 cents on a $10 item. The good thing about it is that you can just set up the Auction Sniper by setting your maximum bid and letting it do the bidding for you in the last few seconds of the auction. It also helps discipline you to not pay more than you were planning on at the very end of the auction.


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## crhoades (Jul 8, 2007)

I've used this a couple of times with great results! The cool thing is they give you a couple of free snipes so I haven't had to pay for it yet. It works exactly as you've said. Now the only problem is we will have a bunch of Puritan snipers going after the same books. Way to go, Rich!


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## Tirian (Jul 8, 2007)

I've always been concerned with the security of these services - you have to give them your ebay username and password don't you?


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## BobVigneault (Jul 8, 2007)

My favorite song by the greatest musical genius to ever live - Weird Al

*The "eBay song"*


A used ... pink bathrobe
A rare ... mint snowglobe
A Smurf ... TV tray
I bought on eBay

My house ... is filled with this ****
Shows up in bubble wrap
Most every day
What I bought on eBay

Tell me why (I need another pet rock)
Tell me why (I got that Alf alarm clock)
Tell me why (I bid on Shatner's old toupee)
They had it on eBay

I'll buy ... your knick-knack
Just check ... my feedback
"A++!" they all say
They love me on eBay

Gonna buy (a slightly-damaged golf bag)
Gonna buy (some Beanie Babies, new with tag)
(From some guy) I've never met in Norway
Found him on eBay
*
I am the type who is liable to snipe you
With two seconds left to go, whoa
Got Paypal or Visa, what ever'll please
As long as I've got the dough*

I'll buy ... your tchotchkes
Sell me ... your watch, please
I'll buy (I'll buy, I'll buy, I'll buy ...)
I'm highest bidder now

(Junk keeps arriving in the mail)
(From that worldwide garage sale) (Dukes Of Hazzard ashtray)
(Hey! A Dukes Of Hazzard ashtray)
Oh yeah ... (I bought it on eBay)

Wanna buy (a PacMan Fever lunchbox)
Wanna buy (a case off vintage tube socks)
Wanna buy (a Kleenex used by Dr. Dre, Dr. Dre)
(Found it on eBay)

Wanna buy (that Farrah Fawcett poster)
(Pez dispensers and a toaster)
(Don't know why ... the kind of stuff you'd throw away)
(I'll buy on eBay)

What I bought on eBay-y-y-y-y-y-y-y-y-y


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## Semper Fidelis (Jul 8, 2007)

Sorry Chris. 



Matthew Glover said:


> I've always been concerned with the security of these services - you have to give them your ebay username and password don't you?



Yes. That's why I wanted to recommend a strong one that you can trust. The good thing about your eBay account is that you don't have funds linked to it. You're not giving away the world with your eBay username/password.


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## Tirian (Jul 8, 2007)

I guess a good tip would be not to use the same username/password on your PayPal account as on your Ebay account!

[makes note to self....]


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## Semper Fidelis (Jul 8, 2007)

Matthew Glover said:


> I guess a good tip would be not to use the same username/password on your PayPal account as on your Ebay account!
> 
> [makes note to self....]



Umm...yeah! 

Seriously, about 2 years ago, I had my Paypal account broken into and I lost about $150 I had in there. I was very dumb about Password management then.

I use a program called Roboform now. I can generate random alphanumeric passwords and don't need to remember them because they are stored for me. It even has a thumb-drive version that I can carry with me. I still use a standard password for stuff that I don't care if it's hacked but I'm a lot smarter about protecting passwords now.


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## Timothy William (Jul 8, 2007)

A better option would be for eBay to introduce second price sealed bid auctions (everyone bids the maximum they would be willing to pay, the highest bidder would pay the amount of the second highest bid.) Theoretical identical results to what would happen currently if everyone used these bidding services, but with much less hassle and possibility of error. Also allows the seller to see how high the winning bidder would have gone, which can give valuable information about the potential demand for more of the same or similar items.


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## Semper Fidelis (Jul 8, 2007)

Why would that be better for the seller Timothy? EBay has all sorts of options that give the seller control on the way they want to introduce something they are going to sell.

Certainly there might be instances where, if the seller wanted the _option_ you're advocating, he could select it as an auction type. But there are items that people introduce with "No Reserve" because they want the bidding to be hot on the item.

In fact, as I noted, one of the reasons I like this service is that it takes me away from the auction so I'm not tempted to bid above what I originally decided I was willing to spend on an item. As prices run up in an auction, you can go way above your original limit a few $ at a time.


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## Timothy William (Jul 8, 2007)

As I said, theoretically - subject to some conditions - the results are the same. The main benefits would be to the buyer. They make one bid once on each item rather than having to continually check back in and up their bid, or pay to use a program to automate the process. No chance that they will forget to check back in and raise their bid, which would lead to, on average, higher expected selling price. A seller might suppose that, if the buyer was paying 1% to use an automated bidder, some of the incidence of that fee would fall on the seller in the form of lower bids. 

The information one could also be relevant, especially for items where more could be produced - eg. something one was making or buying at local garage sales and selling online, and where the expected price is not readily apparent. If the final selling price for an item is $100, but I know that the winner was prepared to pay $150, and that several other bidders valued the object around $80 or $90, I would know that there would likely be a market for future sales of the same good. If there were only two serious bidders, and the winner was only prepared to pay $105, I would be much less likely to source or produce more similar items. Yet a standard auction may not allow the seller to distinguish between the two situations. 

As to why sellers act as they do - I don't know, I've never sold online. I did my economics degree back when online sales were hotting up around 1999, and back then there were not reliable studies of online auction behaviour that I came across - there was a guy in my Honours class intending to do his thesis in online sales though.


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## Semper Fidelis (Jul 9, 2007)

Timothy,

I don't doubt it would be good as an option but you stated that "...a better option..." to the entire idea of this automatic bidding service.

It presumes that EBay should have one bidding scheme.

Even if I grant that it might be the better option in some cases (although I'd be curious to know what research *has* been conducted in the last 8 years on this subject) it doesn't mean that EBay should jettison every other bidding option. One wonders why a multi-billion dollar company would ignore research into online bidding theory but who knows. Either way, at best, they would have the sealed bid as additional feature.

Granting that, however, you seem to imply there is no need for such an online service that bids for you in cases where the seller decides to sell by another means - that is to say a normal No Reserve auction - because he doesn't care about historical data as he only has one of an item and doesn't like the sealed bid option. In such cases, the sealed bid option is NOT a "better option" to having an automatic bidding service. In fact, a sealed bid option is, at that point, moot because the auction is of another kind, you want the item, but you can't stay up until 0200 in the morning just to hope that you win the bidding war that ensues in the last 30 seconds of the auction.


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## Timothy William (Jul 11, 2007)

It would be a more efficient option from an ease of transaction point of view, though identical from an allocative point of view. Of course, efficiency and ease of transaction are in the eye of the beholder - I might think that the easiest way to bid would be enter the price I was prepared to pay once, where as someone else might enjoy searching for apparent bargains then joining in a bidding war - even if it meant more effort and time for the same result. Sellers probably play on both psychological tendencies, low starting bids to create interest and hoping for bidding wars as the clock runs down to encourage people to bid more than they planned to. EBay itself would get the same cut whichever way the bidding was conducted, so is quite happy to accommodate the needs of sellers, who in turn will use whatever auction method, rational or otherwise, will attract the most interest from buyers. 

The only study on second price sealed bid auctions I have heard of was from New Zealand, where radio spectrum was auctioned off during the 1970's. At a guess I would say the relevant auction theory was 1 to 2 decades old at the time. The participants - possibly like most eBay bidders today - did not understand that they had a dominant strategy to bid their actual valuation, and systematically bid less than the most they would be willing to pay. I would guess that sellers on eBay would, consciously or not, fear the same response from bidders.


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## Semper Fidelis (Jul 11, 2007)

Timothy William said:


> It would be a more efficient option from an ease of transaction point of view, though identical from an allocative point of view. Of course, efficiency and ease of transaction are in the eye of the beholder - I might think that the easiest way to bid would be enter the price I was prepared to pay once, where as someone else might enjoy searching for apparent bargains then joining in a bidding war - even if it meant more effort and time for the same result. Sellers probably play on both psychological tendencies, low starting bids to create interest and hoping for bidding wars as the clock runs down to encourage people to bid more than they planned to. EBay itself would get the same cut whichever way the bidding was conducted, so is quite happy to accommodate the needs of sellers, who in turn will use whatever auction method, rational or otherwise, will attract the most interest from buyers.
> 
> The only study on second price sealed bid auctions I have heard of was from New Zealand, where radio spectrum was auctioned off during the 1970's. At a guess I would say the relevant auction theory was 1 to 2 decades old at the time. The participants - possibly like most eBay bidders today - did not understand that they had a dominant strategy to bid their actual valuation, and systematically bid less than the most they would be willing to pay. I would guess that sellers on eBay would, consciously or not, fear the same response from bidders.



In other words, a sealed bid is not a "better" option but would be a good option, IF Ebay even offered it, which they don't.

You must not do much bidding on eBay. Sticking your maximum bid in early is a sure way to waste money on eBay. This service is more useful if you are a _buyer_ on eBay. Items that others want heat up as the end of the auction approaches. People realized this a while back and started bidding at the last minute. I've lost a number of items that, if I had time, I might have bid $.50 more than the winning bid to get but the auction ended. But, if two of us are willing to pay $10 for an item and the other bidder's max is $8 with 7 seconds left in an auction and my automatic bidder can enter a bid for $8.25 before the other has a time to enter a higher bid then I've saved money. Alternatively, if I bid my max of $10 early on, the other might decide that he's willing to go to $10.25 and then I might figure: "What's another 50 cents?"

I don't doubt your theory is interesting but it really does miss the point here. It's really rather off topic and immaterial to the *fact* of the way that eBay works. It's rather like a discussion over the best mass transit in New York and I suggest to everyone that buying your subway pass online saves you $10/month but then somebody jumps in and says: "Well, an even better option would be a monorail that ran over the top of the city...." The fact is that New York doesn't have a monorail so it's no option at all for those who are buying subway tickets every day.

In like fashion, EBay doesn't have a sealed bid option so the readers have the option of discussing bidding theory with you or actually saving money with the way that EBay currently works. Studies in University and New Zealand notwithstanding.


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## etexas (Jul 11, 2007)

I feel like a Flintstone (hopefully Barney my favorite), because my friends...I have never bought anything on eBay! I almost have an urge to try for a pet rock, just to say I bid on something! Just wanted to get that off my chest.


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## Semper Fidelis (Jul 12, 2007)

Brego said:


> I feel like a Flintstone (hopefully Barney my favorite), because my friends...I have never bought anything on eBay! I almost have an urge to try for a pet rock, just to say I bid on something! Just wanted to get that off my chest.



Well, here's your chance:

http://cgi.ebay.com/Original-1975-P...6400QQihZ019QQcategoryZ30QQrdZ1QQcmdZViewItem


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## Timothy William (Jul 12, 2007)

SemperFideles said:


> In other words, a sealed bid is not a "better" option but would be a good option, IF Ebay even offered it, which they don't.
> 
> You must not do much bidding on eBay. Sticking your maximum bid in early is a sure way to waste money on eBay. This service is more useful if you are a _buyer_ on eBay. Items that others want heat up as the end of the auction approaches. People realized this a while back and started bidding at the last minute. I've lost a number of items that, if I had time, I might have bid $.50 more than the winning bid to get but the auction ended. But, if two of us are willing to pay $10 for an item and the other bidder's max is $8 with 7 seconds left in an auction and my automatic bidder can enter a bid for $8.25 before the other has a time to enter a higher bid then I've saved money. Alternatively, if I bid my max of $10 early on, the other might decide that he's willing to go to $10.25 and then I might figure: "What's another 50 cents?"
> 
> ...



On what basis do you assume I don't bid much on eBay? I did not say that under the current system you should make your maximum bid early, yet you apparently misread me as saying that then (correctly) criticised that view. 

Rich, I'm really quite confused as to the tone of your post. I didn't join this thread to try to hijack it away from discussing how to save money on eBay. And I certainly didn't join it to bore everyone by showing off about my economics studies - as if you would all think better of me for having studied auction theory at Uni. I made one fairly brief post to the effect that if eBay changed their bidding system then the same results that the OP mentioned could be achieved without the need to spend 1% on automated bidding. Given that I had studied very similar situations I thought it worth posting. I didn't know if anyone would be interested, but you replied to my posts a couple of times, so I assumed you had at least some interest, and replied to what you had said. If you thought my first post was an irrelevant tangent, why not say so straight up (or even just not reply to it)? I said what I said because I actually do find such theories interesting, and I thought it had at least some relevance to the thread, and I was pleased you replied but then confused and somewhat offput by your last post.


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## Semper Fidelis (Jul 12, 2007)

Roger Timothy. I'm sorry I offended you. I misunderstood. Please forgive me.


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## Timothy William (Jul 12, 2007)

Thankyou Rich. No offense taken. I'll try to stay on topic in future.


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