This is by no means a complete discussion on bidding. Ebay has a good help page and the Q/A board is tops for getting questions answered. Ebay uses a hidden proxy bidding system for standard auctions. This means that your bid is hidden from the public and Ebay's computer bids for you in your absence up to the maximum amount that you decided on when you placed your bid. The amount bid by proxy in your behalf is governed by how much your adversary bid and a pre established minimum increment. Theoretically, you could bid a million dollars on an auction item, but you will never pay more than the minimum increment it took to overtake your adversary.
Whenever it is you find yourself in a situation where it is not possible for you to Snipe an item, you stand the best chance of winning an auction by placing the absolute maximum bid you are willing to pay for an item. By bidding in this manner you are using the hidden proxy method as it was designed to be used. This maximum bid can be placed at anytime during the auction. If you come back later to find that you did not win the item, you can feel confident you didn't lose either. Somebody was just willing to pay more than you. If you are bidding on an item that has a bid placed by an anti Sniping bidder you can rest assured this bidder has bid high enough to protect themselves from your Snipe up to their absolute maximum they are willing to spend.
There is one small catch to using the hidden proxy system. It can cost you money! It can cost you money because when you bid early in the auction and become the high bidder, you stand an excellent chance of being bid bumped or worse, out bid! To prevent this from happening you Snipe the auction. (Details on the Sniping of an auction to follow). At a traditional auction house, the auction house uses an auctioneer to auction off the items. Ebay is not a traditional auction house as they are simply a go-between. The sellers are conducting their own auctions. This means every seller conducts their auctions just a little bit differently than the next. For this reason be sure you read any disclaimer posted by the seller. They do vary. If there is anything you don't like, don't bid. Check the Sellers Feedback! Those high scores and the star do not necessarily mean that things are fantastic. If you find some negatives but you still feel inclined on bidding, email the seller and ask about their side of the story. Most sellers that have been given negative feedback unfairly would be more than happy to tell their side.
Don't be fooled with very low start bids. Human nature what it is, very low starts is a sellers strategy to get you to commit to item early in the auction in hopes that as the auction wanes on you will show some resistance in letting it go. Always keep in mind shipping and insurance when you bid. This is especially true with lower priced items and heavy items. If shipping is a concern, always email the seller and ask for a shipping estimate. As long as you treat the quote as an estimate the seller shouldn't have a problem with helping you. Whatever you do, do not assume implied representations by the seller. Email the seller with any and all questions you may have or can think up if not covered in the item description. This is very important as it is not your eyes and hands examining the item you are thinking about bidding on. The more questions you ask the seller before bidding the better you are able to establish a true value as you perceive the value to be. Save all emails you receive from the seller until you decide not to bid or when the transaction between you and seller is complete. All emails between you and the seller are a legal record. Again, visit the Ebay Q/A board often. Lurk if you don't have anything to say. This is where you can feel Ebay's pulse, learn how to handle problems and pick up on many techniques.
Study the competition
Know your adversary. Most people have bidding patterns that can be readily discovered by doing history searches on Ebay. By using your adversary's email address you can search the last 30 days they have been bidding on Ebay. You can conduct this search on Ebay's search page. Get to know the seller. You can do this by studying the sellers sell history and emailing bidders if you have some concerns. If you find a seller that often lists items you like, bookmark the sellers auction history. As the seller posts new items you can use your bookmark to see what is new. Opportunist/Impulse bidders are the easiest to spot. The opportunist/impulse bidder generally bids on an item because the current bid at the time is low and you rarely see them come back for another bid. Although watch out because some bidders bid early just to bookmark the item with Ebay's daily status reports. Learn who the good Snipers are. If you find that so and so bidder always Snipes the same type of item you are after, discover their average Snipe time by studying their bid histories. If this Sniper wins items a lot give very serious thought focusing on beating this Snipers best average Snipe times. You never know what a Snipers maximum bid is but you do know how many seconds before auction end time they get their winning bids in. If you feel you are no match for a high caliber Sniper, give serious thought to Thunder Sniping the item and of course, bid all the money and forego Sniping.
When studying bidding histories be sure to read the item descriptions carefully. There will be obvious and not so obvious clues as to why some bidders stopped bidding. Besides the obvious damaged or imperfect item some possible reasons an item may not have gotten a higher bid is the lack of a graphic, a poor item description by the seller, low seller feedback or feedback with negative comments.
Some hold the view that you should never bid early in an auction because if you do you attract attention to the item. Others bid early to make an email bookmark or a bid history bookmark courtesy of Ebay's search engine. Personally I don't buy the attract attention theory. Bottom line is a good item is going to get sold on Ebay and it will be sold for top dollar. Bushwhackers never bid early as they do not want to give themselves up. If there was a reason not to bid early, this could be it as it is difficult if not impossible to establish bidding patterns on a Bushwhacker. Due to the nature of Ebay's proxy system and for the simple reason you know exactly what time an item is going to end, the general rule is you should bid very late in the auction. The only time you would not bid very late is if you were not going to be available for a Snipe. If you can't be present for the Snipe then bid your absolute maximum anytime during the auction. Cricket Jr has been designed to assist you in bidding in the last 15 to 20 seconds of an auction. You increase your odds of winning significantly if you bid in the final seconds of the auction in that if you take possession of the prize with your Snipe bid there isn't enough time left in the auction for an adversary to respond with a counter bid. The one exception would be another Sniper that sends in a Snipe later than you. This Sniper will beat you if their maximum bid is higher than yours. In the event of a tie, the early bidder wins. By bidding in the last seconds you can only lose if you did not bid high enough to take the item away from the current high bidder or another sniper submitted a higher bid just prior to or after your Snipe. By knowing who your adversaries are, you should also know how good they are at Sniping if they use this method.
You should bid the absolute max you are willing to pay for the item. If you do not do this then obviously you stand a chance of losing the item to another bidder that Snipes you. In the Doubles Command Control, there is a technique called Never Say Die. You can use this technique to send in a last second bid if things go awry and there is still some seconds on the clock. The key to the Snipe is high bid and last final seconds. Bid in odd dollars and odd cents. With regard to dollars people generally think in even $1 $5 and $10 increments. With regards to cents, 25¢, 50¢, 75¢ are the most common with 5¢ and 10¢ increments being the next most common. When bidding dollars try to use 3, 4, on the low side and 8, 9 on the high side. Use those same numbers with cents also. For example, 23¢, 48¢, 67¢.
Ebay's computer automatically uses a minimum bidding increment when deciding what your minimum bid can be. Below a table that shows the increments.
| Current Bid |
| Increment |
| $0-$1 |
| 5¢ |
| 1-5 |
| 25¢ |
| 5-25 |
| 50¢ |
| 25-100 |
| $1.00 |
| 100-250 |
| $2.50 |
| 250- 50 |
| $5.00 |
| 500-1000 |
| $10.00 |
|
Bid Bumping is just what it sounds. Bid Bumping is can be used to get a feel for how high a high bidder has gone toward the end of an auction. It can also be mean sport that only devilish people do. Using bid bumping to test the waters can save you time later by not having to come back and try to Snipe an item. For example, say the current bidder is at $30 for an item. You decide you are willing to go to $50 max. Bump the bid $5 to $10. If you take it, stop and come back prepared to Snipe. If you don't take it bid bump another $5 to $10. Bid bump to your max bid. If you still don't take the item, you do not have to worry about coming back later. Go find another prize to spend your time on. Bid Bumping for mean sport can be used to aggravate a bidder. If you do this, be careful as you could very well end up owning something you do not want. The Cricket Jr Cat 'n Mouse Technique uses Bid Bumping.
The Dutch Auction
Used by sellers to auction small to large lots of items, the Dutch auction has a lot to offer a crafty bidder. Two important thing to always remember in the Dutch auction is that the date and time stamp your receive when you bid is much more important than in the standard auction. The second is, there is no proxy bid. Your maximum bid is made public. The following is by no means a complete discussion of the Dutch auction. Further information can be obtained by reading Ebay's FAQ.
3 rules
Rule 1: When developing a strategy to bid on a Dutch auction always remember to figure in the law of supply and demand. If demand exceeds supply, the price will go up. In the Dutch auction, if demand remains low, so will the price. This is true in all auctions but in the Dutch auction you can see this law in action more clearly. In a standard auction, stupidity and bidding wars alone can drive up a price! One exception would be wherein the seller has an unlimited supply and repeatedly lists the same auction. A seller strategy used here is to sell a lot of items for one price but the seller is using the auction format to achieve the goal.
Rule 2: Always do a search for more than one of the same Dutch auctions. Often times you can find the same item selling for less in another category. Sellers frequently list Dutch Auctions in multiple categories in addition to listing week in and week out.
Rule 3: Do a history search for completed auctions. You may find that an auction just closed recently and the seller did not sell all of his/her items. You may find that the items sold for less than any current identical items. Contact the seller and make an offer. Rule 2 also helps you establish what the end price may be for the current auction you are looking at. In a nutshell, the winners of the Dutch auction pay the lowest winning bid. Technically it doesn't matter how high you bid on a Dutch auction you will not pay more than the winning lowest bid. Confused? Ok, here are some examples:
Seller offers 10 widgets. This means there can only be 10 winning bids. The start bid is $5. All bidders bid for 1 widget. The auction just ended.
| Bidder | Bid | Win | Pay |
| 1 | 17.37 | yes | 11.45 |
| 2 | 15.00 | yes | 11.45 |
| 3 | 14.56 | yes | 11.45 |
| 4 | 12.00 | yes | 11.45 |
| 5 | 12.00 | yes | 11.45 |
| 6 | 12.00 | yes | 11.45 |
| 7 | 12.00 | yes | 11.45 |
| 8 | 11.75 | yes | 11.45 |
| 9 | 11.50 | yes | 11.45 |
| 10 | 11.45 | yes | 11.45 |
| 11 | 11.00 | no |
|
| 12 | 10.00 | no |
|
| 13 | 10.00 | no |
|
|
Bidders 1- 10 win as there are only 10 items available. The lowest bid was $11.45 by bidder 10.00 Had you come and bid any amount above $11.45 you would have bumped bidder 10 out of the auction. When demand is 100% each time a new bidder bids more than the lowest bidder the lowest bidder gets bumped. |
|
So to win at a Dutch auction you have to be in the bubble. Notice that the start bid was $10 and bidder number 10 set the final price of the auction.
Bubbles
Some refer to the stack of high bidders as being in the bubble. So that we don't confuse terms we will refer to the bidders that are in reach of winning the auction as being in the bubble. In the table above, since there were only 10 items up for action there can be no more than 10 bids. That is bids, not bidders. A bidder can bid on more than one item. The object of the Dutch auction game is to not end up near the edge of the bubble then get pushed out of this bubble. In the event you get pushed out of the bubble you can go back and make a new bid just like in a standard auction. You can also reinforce your bid before you are pushed out of the bubble. Note: If you come back to place a brand new bid or if you decide to reinforce your bid, your personal date/time stamp will have changed. That means if you bid any amount that is the same as any others still remaining in the bubble, you no longer posses your original date/time position. In the event of a tie, winner is the senior bidder decided by the time stamp . Of course the smartest thing to do when demand is approaching or has already exceeded supply is to pull up young Cricket Jr. and SNIPE!
Generally you do not treat a Dutch auction much different than a standard auction. If demand is about to or has already exceeded supply in the Dutch auction, treat it like a standard auction, bid very late. Dutch auctions strategies are easier to form as all bids are exposed to the public whereas in the standard auction the bids are concealed until the end of the auction. There is one major exception that would indicate you do not need to Snipe in a Dutch auction. This is when the seller puts more items up for Dutch auction than can fill current demand. This happens all the time. These auctions will be obvious as quantities will be very high and the general response is low. You can back this up with a completed auction history searches for the same item.
When deciding to bid on a Dutch auction first determine how the law of supply and demand may fit the particular auction you are studying. If supply is high and demand is low you can probably safely just bid the minimum start bid and forget about snipers and bushwhackers.
Here are some strategies to use in this case. Look at the table above again (use your browser back button to come back) We will use this as the example auction to discuss some Dutch Auction strategies. You have done your research and there is just a day or so left in the auction.
1. Bid deep into the bubble. Using the auction scenario above bidding deep into the bubble means you would bid any amount just over $12. By doing this you would move into the number 4 spot. All bidders below you move down one step. Bidder 10 gets pushed out of the bubble. Bidder 9 goes into 10's spot and in this auction a new low price is set. For you to get pushed out of the bubble all those below you and any new bidders arriving on the scene would have to bid higher than you. In the typical Dutch Auction, that is a lot of bidding and unless the seller intentionally low balled the start bid on a high quality item, you are relatively safe. Another option is:
2. Don't mess around and become the King/Queen of the hill. Bid any amount higher than the bidder in the number 1 spot. It would take a pretty wild end of auction scuffle for you to get pushed out of the bubble. Or:
3. SNIPE it.
Test time!
There is one last thing to talk about with the Dutch auction. A lot of bidders are dealers. They bid in the hopes they will get something at a good enough price to resell it. Here is a surprise test for the resellers. Lets assume Seller is offering 25 key chains at a $1 start bid. You know you can sell all these key chains for $5.00. You begin to think strongly you should bid on all of them. It is five minutes to the end of the auction. The bidding scenario is this: There are 18 bidders. There is a high bid of $3 and the lowest bid is $1. Shipping will be $5 for the whole lot. You have decided to Snipe and of course because you use Cricket Jr your Snipe will win. What is the best strategy to take all or most of the key chains and what price are you going bid? This was a real auction I was asked to help develop a strategy for. The numbers are not exact but the principles are the same. Think it out and write down your answer. Below is the scenario.
| Bidder | Quantity | Bid |
| 1 | 1 | 3.00 |
| 2 | 1 | 2.75 |
| 3 | 2 | 2.30 |
| 4 | 1 | 2.25 |
| 5 | 10 | 1.30 |
| 6 | 2 | 1.00 |
| 7 | 1 | 1.00 |
| 8 | 1 | 1.00 |
| 9 | 1 | 1.00 |
|
The answer:
SNIPING
There is really one objective. To Win! Bid as late as you dare. Bid sooo late in the auction that your adversary does not have time to get another bid in. Whether or not you bid early and then come in and Snipe late or whether you never bid early and always bushwhack is up to you as the jury is still out discussing the pros and cons. More often than not Sniping will save you money.
Stay tuned for more info on how to become a professional sniper...
