26 days to go!! Auction Sniping!

Early in the build up to my auction I had quite a few questions for eBay about exactly how I would be able to list my auction. I needed to confirm that they would have no issues with what I was doing, and that the sale would be able to run smoothly.

So after some effort I was able to get in touch directly with an eBay account manager, who has been very helpful. He has just contacted me today to let me know that I am now able to schedule my auction and start working on the listing, ready for going live on 22nd June. This really brings it home that we are getting close now, and this is about to happen.

I have already been doing some work on the listing, and have posted an idea of how it will look at my eBay “About Me” page. There is still a bit of work to be done, and some videos to be added, but you can see how it is shaping up.

As the date of the auction approaches I have been doing a bit of research into how best to list my auction on eBay, and have had a couple of approaches from companies offering “Auction Sniping” services, asking me to run ads for their services on my website.

Before I started this process, although I have used eBay quite a bit, I had never come across the term “auction sniping”, and was very skeptical about it. I did not take up any of the offers to run adverts, as I felt that this might be perceived as advertising services which may offer people an advantage.

However, I have looked into auction sniping, and have been quite interested and impressed with some of the services they offer.

Basically, an auction sniping website is one which will place bids on your behalf on an eBay auction, without you having to be online yourself to make your bids. It is very much like a proxy bid service in any standard offline auction, but the big difference is that auction sniping software waits until the last seconds of an auction to make your bid for you, with the possibility of winning the auction in the last seconds.

I wondered if this offers an unfair advantage, but further study showed me that an auction sniper will still only win if their maximum bid is higher than anyone elses. Which simply backs up what I have said in my FAQ from Day 100, that it is much wiser to decide on your maximum bid early, and place that bid, than try to hang on until the dying seconds of the auction, and try to pay less. If you are the highest bidder you still pay just over the bid of the next highest bidder, not your maximum, but have less chance of losing out at the last second.

Here is what I wrote on my FAQ page:

Q: Can you give me some eBay tips?

A: Firstly, decide what your absolute purchase limit will be. It is all too easy to get carried away in the heat of an auction.

You can enter this as your maximum bid with eBay, and eBay will place bids for you automatically, until your maximum bid is reached. Automatic bids are only made to increase your bid over another bid, so you will not necessarily pay your maximum amount. It simply depends on what others are prepared to bid too.

Do not leave your bidding until the last moment! A common technique is to try to get the last bid in during the last seconds of the auction, but it is very possible to be outbid at the last second, and miss out. To avoid this pitfall, make sure you make a realistic maximum bid. If you try to go too low, you will lose out!

“A snipe is a last minute bid, generally placed in the last minute or closing seconds of an auction. This can be done manually, with you sitting in front of your computer, bidding at the last second, or it can be done via software, such as Auction Sniper. The point is to get a high bid in, giving others little time to respond with a counter-bid.

If someone bids higher earlier in the auction, that person will win, because he bid the highest. That is how auctions work. An important point to be noted here is that you have no way of knowing what his high bid (proxy bid) really is; you only know that he bid at least enough to be on top.

For example, if bidder A bids $42 and bidder B bids $75, while the auction is still going on, you will see bidder B listed as the high bidder at $43, because $43 is one bid increment over the next-highest bid of $42. You know that B bid more than A, but you do not know by how much. If the auction ends without further bidding, B will win for the same $43 price and you will never know what his max really was.

Let us say that bidder C comes along and bids $61. Bidder B will still win, but he will be listed as winning for $62, since much more of his proxy bid was used up to keep him as top bidder, by placing him one increment (in this case, a dollar) above the second-highest bidder, C.

Why snipe? Because many people do not bid their max. This is particularly true of bidders new to eBay, though you would be surprised at the old-timers who do the same thing. Trying to get a good price, they tend to bid just enough to stay the high bidder. They do not bid what they are REALLY willing to pay until someone else comes along and outbids them. Only then do they bid higher. Sometimes this cycle goes back and forth, with two or more bidders (called “nibblers”) continually outbidding each other, in an expensive game of oneupmanship. But these same nibblers tend to leave their bids alone if no one else outbids them.

That is where snipers come in. Bidder X may have bid $25 on an item, but will go higher if someone outbids him. He may go up to $100 if he feels he has to, in order to win, but leaves his bid at $25, thinking he is somehow getting a better deal. He overlooks the fact that if he bids the $100, he will not pay that amount, unless other bidders push the auction price up that high. So along comes bidder Y, a sniper, who bids $50 in the last seconds and wins for $26! There is no time for bidder X to come back and raise his bid. He is upset, because he knows that he would have been willing to go higher. Additionally, he does not know that bidder Y’s max was $50–all he sees is that he lost the auction for one dollar.

Does sniping work every time? No. There is no magical way to guarantee a win. But eBay is replete with bidders who nibble and do not observe or analyze their own bidding behaviors, and that is why we snipers tend to win. Consequently, we have a very high success rate–mine approaches 97%, with all of my losses going to higher bidders who were willing to pay more than I was.

The key is to decide the ABSOLUTE max you will pay, set your snipe through AS, and leave it at that. They will take care of the rest. Do not obsess about getting the very last bid in–at three seconds, instead of eight–just decide what the “I will pay this and not a penny more” amount is and stay with it. It is more important that your bid get in near the end, than it is to risk your bid not reaching eBay in time. (If someone else bids that late in the auction–less than fifteen seconds remaining–he is another sniper and was probably going to bid at that point, regardless of whether or not you had bid, so do not get unnerved by that.) This is why it is important to bid your absolute maximum. Most of the time you will find that your max does not get reached and you will get your win at a good price. When you do lose, it will not be because you did not bid your max; you will simply have been outbid—whether by another sniper or by someone who bid much earlier in the auction—but you will know that someone else was willing to pay more.

Most of us tend to use a 5-10 lead time; some members add a few seconds on Sunday evenings (eBay’s busiest time) and on any day when an auction ends exactly on a quarter hour (X:00, X:15, X:30, X:45), as these are also busy, due to sellers’ incentive listings. We also bid unusual amounts and occasionally we end up winning auctions where others bid even dollar amounts or just one cent over the dollar. In other words, bid $23.83 and not simply $23.01.

Good luck to all!”

The lesson seems pretty clear to me, and the fact that auctions now take place on the internet, as well as in more traditional sale rooms does not change the basic rules one bit. Decide what you are willing to pay, place a bid that will take you up to that amount and no higher, and then stick to it. If you are outbid, do not get carried away in the heat of the moment!!

Good luck to all from me too!

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