Bidding Strategies: Tips for Successfully Winning Items

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This discussion is about how to win items on eBay, while paying the lowest price possible. Most bidders automatically assume the best bidding strategy is to place a low bid in at the last minute of the auction, but this may not always be the best strategy. Below is an exploration of the pros and cons of different bidding strategies.


Bid Sniping

Bid sniping is probably the most obvious bidding strategy. Bid sniping involves placing a bid as late as possible within the auction closing time, typically within the last few minutes or seconds of an auction. The underlying ideology is that your bid will go unnoticed and competing bidders will not have a chance to reciprocate and bid higher since there is not much time left. This strategy is somewhat flawed. First, eBay uses an automatic bid increment system. For example, the winning bid on an auction may appear to be $100. However, it is possible the winning bidder actually has a bid of $500, and so your bid of $150 will only raise the current selling price to $155 (assuming $5 increments). The danger in using the bid sniping strategy is your last minute bid may still be under the current bidder's highest bid. In such a case, your bid sniping will only increase the price the winning bidder pays, while you lose out on the item. Secondly, bid sniping is awfully risky especially when you wait for the last few seconds of an auction closing time. Your internet connection could suddenly drop out; or, perhaps eBay requests you to enter your password to confirm your bid, only to discover you entered the wrong password and the auction ended in the meantime. There are numerous variables that could go wrong, causing you to miss your chance to bid on the item. Thirdly, bid sniping typically misleads other prospective buyers into thinking a particular item will sell for a lot less than normal. Since all the bidders wait till the last second, the current winning bid price may appear to be abnormally low and as a result attract more bid snipers, creating even more competition and driving the selling price higher. While bid sniping may be effective in some cases, there are a lot of variables that go unnoticed.


Proxy Bidding

Since eBay's bidding system is based on an automatic incremental system, proxy bidding is extremely easy on eBay. Proxy bidding essentially means placing your highest bid in upfront (the highest amount you are willing to pay), and eBay will automatically bid on your behalf up to the highest amount specified in increments. eBay automatically places the lowest bid possible, while at the same time making sure you are still the winning bidder. No one but eBay knows your highest bid, so there is no danger of a seller attempting to get you to pay more for an item by placing competing bids just below your highest bid. Proxy bidding works great as you can put your highest bid in right away and sit back and let eBay do the rest for you. If you are outbid, you can always insert another higher bid later on. In any case, proxy bidding is a very safe and easy way to bid on eBay. Simply determine the highest amount you are willing to pay for an item and place your bid in the auction as early as possible and eBay will automatically bid on your behalf up to the highest amount you are willing to pay (if necessary). Proxy bidding is one of the more effective and successful bidding strategies. If you lose out on an item, the only reason possible is the item sold for more than you were willing to pay (assuming you put your bid in as the maximum amount you were willing to pay upfront). On some occasions you may find yourself outbid, only to discover the winning bid was one increment, or $5 over your highest bid. This can be disappointing, so you may still want to keep an eye near the closing time in case you get outbid.


Low-ball Bidding

Some bidders have high hopes of winning high-ticket items at ridiculously low prices. Because of eBay's listing fee structure, many sellers often start the opening bid at values under $9.99 in order to pay lower listing fees. So a $2,000 laptop (estimated value) may have an opening bid of $9. Some buyers are mislead and think they can purchase the expensive laptop at a winning bid of $9. Thus, these buyers scour eBay for all the expensive items with low opening bids and right away place the first opening bid at the lowest price possible. These buyers will do this repeatedly to have as many as 100 or more low-ball bids on items simultaneously. eBay is a near perfect marketplace where buyers compete to win items, paying the maximum price each buyer is willing to pay for items. Therefore it is extremely unreasonable to expect a $2,000 laptop to sell for an opening bid of $9 (it is almost impossible for such an occurrence). Low-ball bidding is only a waste of time for buyers, while it also eliminates the popular Buy it Now option for other prospective bidders (the Buy it Now option always disappears once the first bid is placed on auctions without a reserve price met). Some sellers may even cancel or block the bids of low-ball bidders, especially when the same bidder with a low feedback score places numerous bids simultaneously on several items an individual seller is selling. Bidding on eBay is a privilege that can be easily revoked, so each time you place a bid on eBay realize your bid is effectively a binding contract. If you do not plan on purchasing 100 laptops at your highest bid, you probably should not bid on 100 laptops simultaneously.


Buy it Now

You may also consider eliminating bidding altogether and look only for items offered with Buy it Now prices in your price range. eBay has a unique Buy it Now feature that is visible on most auctions (when a seller specifies) based upon a price a seller has predetermined. In some cases, you may find a real bargain using a Buy it Now price. Or, you may be in a hurry to purchase an item and need it right away so the Buy it Now option allows you to win an item quickly without having to wait days for an auction to end. Keep in mind the Buy it Now price automatically disappears on all auctions once the first bid is placed (or the reserve price is met on a reserve auction). Once the Buy it Now option disappears, you will no longer be able to utilize it (it is against eBay policy to request a seller to sell an item outside of an eBay transaction using a "Buy it Now" price). So how can you find these Buy it Now bargains before another buyer places the first bid? eBay has a unique Favorite Search feature, which automatically notifies you of items matching a specified search by e-mail on a daily basis. Since most Buy it Now prices do not last long, you can easily snag a Buy it Now price by permitting eBay to automatically e-mail you listings of a particular search. To setup a favorite search, simply run a search on eBay and select the "Save Search" option on a search page. You can then request eBay to e-mail you when new, hot items are listed matching your search criteria.


Bid Nibbling

Bid nibbling is arguably the most ideal strategy. Bid nibbling, as it suggests, involves occasionally or gradually placing bids on a single item, attempting to be the winning bidder the majority of the time. You do not have to bid your highest price upfront, rather just enough to outbid the current winning bidder. When buyers collectively "nibble" on an item by bidding in small increments, the resulting effect tends to ward off other prospective buyers, by driving the price up earlier in the auction closing timeframe to a more reasonable, yet under market value level. As mentioned in the discussion of bid sniping above, low winning bids on items often attract more competition, making it more difficult to win an item. On the reverse side, a higher winning bid (still under market value) often wards off the non-serious bidders or low-ball bidders that do not actually have intentions of seriously bidding on an item. Therefore, gradually placing bids on an item much like a fish nibbling on bait, allows one to successfully remain the winning bidder while warding off other prospective bidders, reducing the competition and increasing your chances of winning the item. This bidding strategy may sound counter intuitive. You might consider utilizing this strategy on your next purchase to discover its benefits. The main downside to bid nibbling is the amount of time and attention it takes to consistently place bids on an item.


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