auction sniping 101

This is a quick little how-to that will hopefully save a few people some pain. I’m going to presume you know what eBay is and how their auctions work.

eBay auctions are designed to make potential buyers nervous about the idea of losing the auction to someone else.

The recommendation given to avoid this is to bid as high as you’re prepared to pay as soon as possible. This is, however, the worst possible thing you can do because lets anyone else looking at the same listing that:

  1. They have competition

  2. How much that competition is prepared to spend.

The inevitable outcome is that they will increase their bid until they’ve outbid you (and in doing so worked out how much you’ll pay). You, outbid and now committed to winning the item, increase your bid; they increase theirs; and so on and so on goes the game of one-upmanship until the time runs out.

Net result? You’ve either lost the item to your competition or you’ve won it but in the process spent WAY more then you intended to.

Good for the seller, great for eBay, bad for you.

The other thing I see is people who wait until the last second to place their bid (a good strategy…) but place the bid based on how much the item is selling for (e.g. “it’s at $50 so I’ll bid $55″). This is another good way to miss out.

Here’s how to maximize your success rate when buying on eBay whilst minimizing the effects of getting into an impassioned “bidding war”…

  1. Sign up for a sniping service. The one I’ve used for years is Snip let’s you set up a “snipe” which is a last-second automatic bid.

  2. Find the item that you want to buy.

  3. Think of the absolute most you would spend for that item. Forget about how much it is starting for, or how much it is up to. Ask yourself “how much is it worth to me?”. Place that amount as your snipe with a 5 second buffer.

  4. Little tip: Make the amount an unusual number like $13 or $57 or $109.

  5. THIS IS THE IMPORTANT PART: Walk away. Don’t watch the auction. Don’t revise your bid. DON’T reduce your bid. Just wait for the email to let you know that the auction has finished and you’ve either won or lost.

  6. That’s it.

If you win the item you’ll have won it without letting others know what you were prepared to pay. If you lose the item it wasn’t yours to win in the first place with your budget.

It might seem a bit scary or a bit clinical, but anything else is playing straight into the hands of the business model eBay have created.

HINT: eBay set it up like this to maximize their profit, so it’s in their interests that you completely ignore my advice.