Advice and analysis from a "Platinum Power Seller"
Many, many eBay buyers believe that sniping - lurking around watching, then bidding with 3 seconds to spare works. Sometimes it does, but only because the losing bidder has failed to bid his limit in the first place, and prefers to creep the bidding up by the smallest possible step each time. Sniping can fail because sellers sometimes decide to cancel their auction because it has not reached a high enough amount, although this cannot now be done in the last 12 hours. Yes, we know now that it's against eBay's listing rules, but most casual sellers don't know or don't care, and cancel anyway.
Sniping Software & Services
There are web sites and pages giving advice about how to snipe, and even sites which offer to provide the service for you, or software for sniping. Naturally they are going to tell you the advantages of using their method or product, and to the naive it does often appear to work, but take our word for it, much of the time sniping is a silly, and losers, game.
As a "Platinum Powerseller", a kind of title eBay give out to sellers who pay eBay enough in fees each month to make them forget the pain, we have considerable experience, and believe that places us in a good position to share our knowledge and help others. Our feedback now stands at over 3,000 points, and represents total sales of somewhere over £1 million, as we sell many high value items. Although we only occasionally do so these days, it can be quite interesting to look at the "bids" page during or after an auction. These reveal quite a bit about the strategies people use.
It is possible to think of a large number of different bidding strategies, and there is much mumbo-jumbo talked about them. Indeed a lot of different bidding strategies do exist. We will give a brief list, and tell you which, form our experience, and also from logic, is the best.
By this, we mean placing the lowest possible bid every time, rather like at a physical auction.
This is the typical behaviour of the complete beginner. It is too simple to grace it with the title of "strategy", but we see it quite often. Here is a typical scenario. We list something with easily calculated value, let's assume a gold proof 4-coin sovereign set. These contain almost exactly 2 troy ounces of gold, a fact which we spell out in our listings. We also indicate the intrinsic or scrap gold content. At the time of writing this, it would be about £680. We also indicate that we would buy any quantity of these at or above this price level, in fact on our website we have a buy-sell page for these sets, and for a given set it may be for example, "Buying £700 Selling £775". Let's also assume we use a £0.99 starting price, which we used to do for all our auctions, although nowadays we rarely do. The incremental bidder starts off with a bid of £0.99. Another incremental bidder then bids £1.04, after which the first bidder comes back at £1.24, followed by bidder two at £1.44. The two slug it out over a few hours or days, so the auction continues £1.64, £1.84, £2.04, £2.24, £2.64, £2.84, £3.04, £3.24, £3.64, £3.84, £4.04, £4.24, £4.64, £4.84, £5.04. At this point eBay's bid increment increases to 50 pence, so things really start to get exciting!, £5.54, £6.04, £6.54, £7.04, £7.54, £8.04, £8.54, £9.04, £9.54, £10.04, £10.54, £11.04, £11.54, £12.04, £12.54, £13.04, £13.54, £14.04, £14.54, £15.04, before we get into the £1 bidding increments...£16.04. £17.04, £18.04. £19.04, £20.04. £21.04, £22.04. £23.04, £24.04. £25.04, £26.04. £27.04, £28.04. £29.04, £30.04, £31.04, £32.04. £33.04, £34.04. £35.04, £36.04. £37.04, £38.04. £39.04, £41.04, £42.04. £43.04, £44.04. £45.04, £46.04. £47.04, £48.04. £49.04, £50.04, £51.04, £52.04. £53.04, £54.04. £55.04, £56.04. £57.04, £58.04. £59.04, and then the increments go up to £2. By this stage, there have been 43 bids, and price is still under £60. Another 45 bids, and we get to £150, before the increment increases to £5. If you think this scenario is unlikely, and that no pair of people would be so stupid as to waste their time making so many bids, then you would be wrong, we have seen it happen numerous times, although quite often one of the original two bidders drops out before this stage, and is replaced by a third incrementalist.
None of these incremental bidders are likely to "win" the auction, as both are locked into a mindset where they honestly seem to believe they might get a £700 item for a tiny fraction of its value. If either of them won the auction, they could make good money be simply selling the item back to us for, say £700. They would not even need to fork out any money, we would simply sent them a cheque for the difference!
Incremental bidding like this is a complete waste of time, which is fine if you do not have better things to do, although it may just be fun to try it once.
Whether you snipe by physically waiting until the last minute, or use a sniping service or system, you still need to decide what your limit bid will be. If you are going to snipe, you could use incremental sniping, and only make the absolute minimum bid. If the current price is already at, or extremely close to the leading bidders maximum, then you will "win" the auction. If this means you have got the item at a bargain price, then it may seem that sniping has worked for you, although it is quite likely that you would have won if you had place the same bid by proxy right at the start. You will only get a "steal" if the other bidders are stupid enough to be "incremental" bidders.
The other sniping strategy is to make your maximum bid when you snipe, Obviously it is not possible to make repeat incremental bids when you snipe. The eBay proxy bidding system will take care of the rest for you. Using our example above, let's assume that with a day left, the price had reached £500, and assume you were hoping to get a bargain at or below our buying price of £700. Place your £700 in the last few seconds. If the existing highest bidder had bid over £700, he will win the auction at between £700.01 and £720. If his maximum bid was, say £600, then you will win at £620, and if his maximum was only £500, then you will still only pay £520.
eBay have a proxy bidding system. The reason that many people use incremental bidding is probably because they do not understand the proxy system. Perhaps the expression "proxy system" puts them off because it sounds complicated. It could not be simpler. Simply make your highest bid, then leave it to eBay, which will, like most traditional auction houses, carry out the incremental bidding on your behalf. The great benefit of doing this is that in the event of a tie, or close tie, where two or more bidders are prepared to pay a similar amount, the one with the earlier bid take precedence.
Let's assume two bidders want to buy are example coin set, and both bid £700. The person who placed his bid on the first day would win, and the sniper would be the "underbidder" even though he bid the same amount, and he would have missed out on a bargain. The only way he could have won, would be to add £0.01 to his top bid, i.e. bid £701.01, and he would have outbid the original person by one penny. This leads to an important point which is good strategy, or should that be tactics, for all bidders...
Add a Lucky Penny
Simply by bidding an extra penny (or cent), to your maximum bid, you would win more auctions, almost for nothing. Because any intelligent eBayer knows this, it can pay to add a slightly different amount. In our example auction, we would probably add £1.02, which should allow us to beat most "add a bit" tacticians.
In our opinion, if you are a serious buyer, the best strategy is:
Bid your highest amount as early as possible, then leave it to eBay's proxy system and fate.
Add a lucky penny or two (perhaps a few pounds for higher value items).
The only way that sniping might pay is for someone who has little interest in buying the items for use, but whose only motivation is to buy a bargain, in which case, he has turned into a professional or amateur dealer.If that's how you want to earn money, all well and good, but most people can earn more doing their regular job.
Why Is Sniping So Popular?
Firstly, it is a fairly obvious strategy, that most people would be able to think of for themselves. Secondly, the words "snipe, sniping, and sniper" are quite emotive words, making it sound sexy, clever, or macho, as in sniper rifle. Thirdly, because people have worked out that they can make money by selling shipping software or services, and it then pays them to write articles telling you "the secrets of sniping", etc. It is this third reason which makes sniping seem so popular. And fourthly, there is no money to do made by giving anti-sniping advice. We have taken time and effort to give this advice in the hope that we have helped make the world a slightly better place, If you have found this guide useful, then please take a few seconds, to hit the "Yes" button below. If you make money by selling sniping software or services, or if you have been brainwashed into believing that sniping is cool, then we expect you will press the "no" button, but that's life!
Bid Withdrawals & Cancellations
One slight problem with the eBay proxy bidding system is that it is open to abuse. The most obvious abuse is for the seller to get a friend (some sellers have multiple accounts!) to bid a high amount. This reveals all the highest limit bid instead of just the incremental amount of the same bid. The seller's friend then withdraws his bid, then he, or possibly another "buyer" bids enough to push you to your limit. We believe this type of abuse is fortunately quite rare, but there must be many small dealers or individuals who are devious enough and unscrupulous to try it. If we suspect this has happened, you can also look at the withdrawn bidders record which will show the number of bid cancellation he has made within a six months period. If there are many, you could see if they are for the same seller's auctions, in which case you should probably try reporting your suspicions to eBay. Even if there is no evidence of abuse, you should probably consider whether you wish to complete the purchase, and it would probably be reasonable for you to decide that you preferred to mutually agree to cancel the sale.
There is another type of abuse which is possible but we have never yet seen. Two buyers (or one with multiple identities) could work together. One places an high first bid, say £1,000 for our example set. His friend then outbids him. As this is unlikely to be bettered, nobody else bids. The friend then cancels his bid a few seconds before the auction ends, leaving only one bid. Although the limit bid was £1,000; the eBay proxy system would only show this as the first increment £0.99 in this case, and the successful buyer could try to insist that the seller completed the transaction. In any case like this, we would consider it reasonable and ethical for the seller to decline to complete the transaction, and should report the suspected abuse to eBay, who might, hopefully keep some sort of watch on the pair, although we do not have great confidence that this would happen.
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Any images shown are our own copyright images. Our text and description is also copyright, Lawrence Chard of Chard Coins.