Friday, September 2, 2011

Some Tips for eBay Auctions

Something I have recently discovered -- as a buyer rather than seller -- is that eBay takes a seemingly foolish approach to auctions.  Their auctions end at precisely a certain time, no matter what.  People have figured out that the only thing that really counts is the final bid, immediately before the closing bell.  So if I can beat someone else by 50 cents, with one second to go, I win.  Doesn't matter if the other guy would have been willing to pay $10 more.

It seems eBay would receive higher commissions, and sellers would receive higher proceeds, if auctions didn't close until, say, their scheduled closing time or 30 minutes after the last bid, whichever comes later.  I've written to eBay to suggest this.  In addition to the potential lost revenue per sale, it seems like their approach would tend to discourage people from participating in auctions.  I didn't get a reply from them.  Maybe they're too busy to respond to all the messages they get from people; maybe they've already worked out the numbers and believe that their approach is better for them.  Can't say.

Example:  I recently won an auction by having several browser sessions open at once, all set with a slightly higher bid.  Then I just had to click on the lowest necessary price, with just a couple of seconds to go -- too late for my competitors to get the news and respond.  I learned this the hard way, having seen others beat me in the last few seconds of an auction where I was bidding.

In fact, I read somewhere that experienced buyers make a point of *not* bidding before the closing seconds.  Why bother?  If you give your competitor time to reply, you may be just raising the price that you're going to have to pay to get the item in the end.  Just bid once, at the very end, and make it count.

The approach to selling that I've taken is to scout Completed Listings for the item.  Do a search and click that box at the left.  eBay's history is not complete.  They'll usually show only a few recent sales.  But it may be enough to give you some idea of how much your item has been selling for recently.

The other thing I do, as a seller, is to start with a Buy It Now price.  This offers an option to the person who doesn't want to wait a week, doesn't like bidding, won't have time to check back, or would just like to get on with it.  Maybe they'll pay a little extra just to avoid the hassle.  I choose a Buy It Now price based on what I've learned from Completed Listings.

So, for instance, I recently bought an item for $18 in an auction.  Completed Listings would have indicated that some auctions of this particular item have closed at higher prices.  I'd have paid $30 via Buy It Now. I might not have paid $35. But maybe someone else would have.  So I'd have advised the seller to start at $35, give it a few days -- maybe on a longer (e.g., 10-day) auction -- and then lower the price every couple of days until someone nibbles.

Note that the Buy It Now option disappears as soon as someone places a bid.  Some people will hope they can actually get a $30 item for only $10.  So starting the bidding at $10 is a way to defeat yourself, if you'd really like to try to sell for $30.  They'll nibble at $10 -- why not? -- and now you'll have to let the auction proceed to whatever outcome you get.