Using eBay the "sniper" way (a dummy guide for ...)

[MostlyHarmless]

Don't get the wrong idea. I am in NO WAY trying to advertise anything here. All I want to do is share a little bit of a "buyer's experience" with those, who may resort to the "last chance".

When it comes to purchasing ANYTHING that may be used, antique, hard to find or just usually discarded because of being obsolete for the owner, eBay still seems to be a popular place to go. These are the things you don't even find on yard sales or in thrift stores. In our hobby this is a common thing because the bundle you buy will eventually contain items you don't need. Like yet another toy grade remote control or one more 3-channel receiver that weighs 50 grams. Yeah, right, you have a model ready just waiting for that one, don't you? No!

The problem is, few people actually know how to use the eBay bidding system to their advantage. So here it goes. I will first explain how to use it, then why this is the only way it can work.

How to bid on an eBay style auction system:

If you would like to buy an item listed on eBay-style auction site, follow this procedure:

1. Make up your mind what you are willing to pay for it MAXIMUM.
2. Bookmark the listing in your browser but do NOT add it to your eBay watch list.
3. Set an alarm on your cellphone 5 minutes before the auction ends.
4. Cell phone alarm goes off and you go visit the bookmark from step 2.
5. If the current bid is higher than your MAXIMUM from 1., abort. Delete the bookmark and look for another listing.
6. Make sure that you are properly logged in to place a bid.
7. Wait until about 10-20 seconds before the auction ends.
8. Place your MAXIMUM bid and confirm it.
9. Do the happy dance or look for another listing.

So what's the magic behind this?

All the magic is behind point #1. Be true on that one and you win the game. Let's go through it point by point.

1. This part is the first key to everything. Let us assume you want to buy a DSM2 transmitter to build your DSM module. You are willing to pay $20 for it. That's it. So $20 - shipping cost +/- fuzzy factor it is (I'll get to that ff later). There is nothing else to do here, but this is actually the hardest part of the whole game. Determine your maximum bid. Write it down if you need to!
2. You don't want to add it to your eBay watch list because sellers are able to see that you are watching. That includes sellers that have shill bidders on stand by.
3. You don't want to miss the end of that auction. So far you didn't place a bid yet.
4. Check listing.
5. Alarm went off 5 minutes prior to end of auction. If it's still looking good (no idiot paying $200 for a used DX4E) close the door and make sure to be undisturbed for the next 5 minutes. A cat in the room can ruin the deal ... I know this from experience!
6. Logging in takes a couple of seconds, especially if you have a password like I have ... this is not the moment to fat-finger it.
7. Why wait for 10-20 seconds before auction end to place my first bid?
   This is the gemstone in the mix. You don't want anyone to "nibble bid" you up or try to "outbid" you. You want to win this thing with a poker face. Why show your cards before the game is over? By placing your maximum bid as late as possible, you allow anyone else only seconds to figure out what your bid was. If you do the timing right, they have about 1 second and zero chance to respond to it.
8. 10-20 seconds before the end, place your MAXIMUM bid. No matter what the current bid is, place your MAXIMUM. If you don't know what that amount is, you lied to yourself in step 1.
   
   Understanding this part is really crucial. What did you say you are willing to pay in step 1? You said $20, no? The shipping cost is $7, so why on earth would you bid any more than $13 EVER? Do not do this! Do not get sucked into bidding wars. Neither do you want to bid less. You said $20 total is fine. So you got to be happy if $13 + $7 shipping is your winning bid. If not, you lied!

The whole trick is placing your MAXIMUM bid as late as possible

The "as late as possible" part to avoid "nibbling up" by shill bidders should be clear by now.

But why bid the MAXIMUM? Very simple. eBay style auctions use a minimum increment proxy bidding system. Sounds complicated, but isn't really,

The rule is that the winning bidder pays the minimum of his maximum bid or the next runner up plus the minimum increment. Breaking that down for a $.50 minimum increment auction, this means that if "bidder1" offered $15, and I offered $1,000,000 earlier, I'd still only pay $15.50. bidder1 plus minimum. It doesn't make a difference if I offered a million or $20. I could have saved a few cents by only offering $15.01, at the risk that the next sniper offers $15.02. Bummer!

What shows on the item listing is precisely that. Let's say that bidder1 had placed $15 and bidder2 placed $20. The listing will show as "bidder2 highest with $15.50". That is bidder1 plus minimum increment. There is no way for you to find out that he actually is willing to pay $20. No way unless you are willing to pay more, increment, increment, increment until you are the highest bidder. You just lost the eBay game!

Don't play that game. Place your maximum bid as late as possible and that's it. If you follow the above rules, you never pay more than you are willing to pay. Most often you will pay a lot less. Especially if you hone your sniper skills and place that bet within 0-3 seconds of the end of the auction.

So what is that fuzzy factor? When you made up your mind about what you are really willing to pay for an item, add a few random cents to it. Just as tie breaker between snipers. May the best sniper prevail.


Hope this is useful for someone.
Jan

[jhsa]

Thanks for the explanation.. only confirmed that I've been doing things right.. even if sometimes used the help of a computer program

[Spoogy]

Hmm....I see that eBay bidding system is stupid and not fair.

There's a samekind of marketing place in internet intended mainly for finnish users (huuto.net) which works quite same way except that if you place a bid just little before the auction ends then the closing time is extended 5 minutes. And if somebody else makes new offer the time is extended 5 minutes again.

So, the auction ends when there is no bids in last 5 minutes when auction should be ended. eBay should omit this way. It's fair for everyone to see what's happening.

[MostlyHarmless]

There is nothing unfair about either system. It is simply a different style of auction. If everyone places their maximum bid right away, the person willing to pay the most still wins and pays 1 increment more than the next runner up. The end result is the exact same.

Let's say we have an auction for something that starts at $10 with a $5 minimum increment. So someone says $10. Next says $20. $25, $30, $35, $40 ... and so on. At some point, one person reaches their "maximum" and stops raising. So the auction eventually ends with ... $65, $70, $70 first, $70 second, gone for $70. We don't know what the winner really was willing to pay, but we know that the other guy had a limit of $65.

Translate that to the eBay style auction without time extension. One person would bid $65, the other bids $100 for the sake of argument. The higher bidder wins the auction and pays $70, one increment of $5 over the next runner up.

And if there only is 1 bidder ever in the auction? He gets the item for the starting bid of $10. The end result is the exact same either way.

The only difference is that everyone needs to figure out their "maximum" upfront.

[pmullen503]

I doubt there many shill bidders on used hobby stuff. You forgot to mention that on reserve auctions, if your maximum is higher than the reserve, your bid will jump to the reserve price. So you bid a max of $30 on a reserve auction that's at $1. Your bid will be $25 if that's the reserve.

[MostlyHarmless]

Right, the reserve. I think of that reserve as a "secret" starting bid. Not really much of a game changer. If I am willing to pay $30, I would place that bid just the same if the starting bid was $25.

[Irish Steve]

And for those that can't be at their PC at the right time, there's another option, which is an "auction stealer" web site that will do the bidding on your behalf, which has 2 advantages, the first is that a cold decision has to be made as to the maximum bid, and the second is that 99% of the time, it takes the pressure out of the process, and at the right time, you find out what the result was, and most of the time, it's a good result, but on occasions, you won't win because someone really wanted it more than you did, and was prepared to pay accordingly.

depending on the site you choose, you can get 3 bids a week for no charge, if you are a heavy E-bay user, there's a premium option that's a few dollars a month that also bids even closer to the finish time.

Used this for a while, and been very happy with the end result. Stops a lot of nonsense.

Having said that, the important thing to do is to make very sure that you have done your research on the seller, and that as best can be determined, the seller is likely to be reliable. I've only had one seller go bad on me in nearly 8 years, in all other cases, which have been few, Paypal has sorted it out if the seller has either turned out to be a bad one, or there's been some other issue. Only every use Paypal to pay for items on E-Bay, as the protection from their system is better than that available for a standard credit card.

Having said that, the issue to watch very carefully is the time to ship, China can be a problem in that depending on the method of shipping and the customs delays, it can get very close to the cut off time, especially if you are using Hobby King and something is backordered.

[Spoogy]

In that finnish auction site is that automatic bidder in-built. In that system seller has to give three values before he can start auction: starting price of auction, price reserve and minimum raise of a bid.

Price reserve is some amount which only seller knows. That is like a protection for him so, if the last bid is not as high as that price reserve is then seller doesn't have to sell the product if he doesn't want to. Of course he can but.... Starting price is where bidding starts from and minimum raise is minimum bid. Also seller can give 'buy this now' -price which is usually little bit higher, but you get product instantly (won the auction).

Buyer sets maximum amount for that automatic bidder and it will place minumum raise everytime if somebody else makes higher bid, until that maximum price is reached or auction is closed (win). I use it everytime if I wan't to buy something from there. Just set the price I'm willing to pay for and let the computer do the rest. After the case is closed (maybe on next day) I'll go and see if I won. If I didn't then it was too expensive anyway....

[Spoogy]

There is nothing unfair about either system. It is simply a different style of auction. If everyone places their maximum bid right away, the person willing to pay the most still wins and pays 1 increment more than the next runner up. The end result is the exact same.

Let's say we have an auction for something that starts at $10 with a $5 minimum increment. So someone says $10. Next says $20. $25, $30, $35, $40 ... and so on. At some point, one person reaches their "maximum" and stops raising. So the auction eventually ends with ... $65, $70, $70 first, $70 second, gone for $70. We don't know what the winner really was willing to pay, but we know that the other guy had a limit of $65.

Translate that to the eBay style auction without time extension. One person would bid $65, the other bids $100 for the sake of argument. The higher bidder wins the auction and pays $70, one increment of $5 over the next runner up.

And if there only is 1 bidder ever in the auction? He gets the item for the starting bid of $10. The end result is the exact same either way.

The only difference is that everyone needs to figure out their "maximum" upfront.

I haven't never make a bid in eBay. I always search only 'buy it now' products if I need something. But if it goes so like described in first post then when bidding starts from $10 and someone says that $10. Okay, then other guy just waits until there is couple seconds bidding time left and places a bid of $15. He wons because the other party did not have time to react for that bid. That's unfair I think. Another party should have time to make his mind do he wan't to react to that bid and make higher offer of product.

[jhsa]

Only one can win.. If you want it, you must offer more money or/and be quicker on the trigger

It's all a game.. with real money and goods.

João

[MostlyHarmless]

Spoogy,

you need to forget the "going, going, gone" type bidding system, where you have the fast talking guy with the hammer and whatever price was shouted out last is the winning price and bidder. This is a proxy bidding system. The seller tells the system what he wants as a minimum for the item. Every bidder tells the system "secretly" what they are willing to pay for it. They have time to do so until the auction ends. At that moment the system figures out who wins by adding the minimum increment to the second highest bidder. Done.

Ignore that "current bid" thing. Treat the thing like a Vickrey auction. Tell the system what you think the item is worth and let it do its job as designed. Telling it as late as possible is simply a matter of avoiding shills and those, who try to "keep up with the Joneses". That is unfortunately necessary because of the disclosure of the "current bid", which differs from the Vickrey auction.

[rperkins]

Havent read this whole thread so forgive me if it is covered
Http://auctionsniper.com
Works great for me when BIN is not available or practical. I love the 'bid groups' so you can set up a group of 5 auctions for the same item and it will work through each auction until you win one.

Also if you are selling an item dont have your auction end at 4 in the morning. You will miss all the manual 'auction snipers.. end your auction on Sunday evening.