I’m observing a few items on Ebay these days, mostly out of curiosity. It’s remarkable how ignorant and counterproductive most people are about Ebay, but they’re not to blame because Ebay deliberately trains people to behave that way because that brings more profit to Ebay. This post explains a few simple and proven principles that will help buyers to win at lower prices, and help sellers get higher prices for their auctions.
Of course these two sides are in competition against each other, but that’s just the way the market works. It’s a fact of life that you can only win a game if you know the rules. The same is true for any marketplace: Understanding the market always helps you,Â whether you are a seller or a buyer.Â If everybody followed these rules then every product would be sold at exactly the value it’s worth. But because many people don’t know these rules, there is a profit to be made: better traders get better prices!
Most people on Ebay (buyers and sellers!) don’t know these principles. Take advantage of that fact.
How to win auctions at the lowest possible price
The golden rule is simple: Decide what it’s worth to you, then bid that exact value at the very last moment. If you do this, one of two things can happen:
- You don’t win the auction, because somebody else bid a higher price. You are happy to have lost, because you decided against paying that higher price. It wasn’t worth that much to you.
- You win the auction, because your bid was higher than any earlier bids. You are happy because you bought the product at a price that you decided on. In fact, you might win with less than your bid — more on that later.
Two questions emerge from this: How do you knowÂ whenÂ to bid, and how do you know how muchÂ to bid?
When to bid
Don’t EVER bid on an item very early, just to show that you’re interested! There is no point in revealing your interest until just before the auction ends. Lots of people place bids on auctions several days before the deadline, and the only result is that the final price is higher. These bidders are making the market more expensive for everybody. Let me quote a few lines:
“Bidding wars are bad news for bargains, but good news for sellers, and Ebay will do all it can to encourage them. Amazingly, Ebay advice to bidders is:
1 â€“ initially, bid as much as you can afford
2 â€“ monitor the item closely
3 â€“ if you are outbid, raise your bid
Can anyone else see the logical flaw there?”
When to bid is easy to decide, because it’s based on cold facts. On Ebay, auctions always have an official end time, and you can take advantage of this. If you bid in the very last second, nobody else will get a chance to outbid you afterwards. And I really mean it when I say seconds: this is all about precision timing. The goal is to bid so close to the deadline that nobody can respond with a higher bid after you.
The only problem is that if you bid at the last second and your bid doesn’t reach Ebay in time, then your bid doesn’t count. So the trick is to place your bid just in time for it to reach Ebay before the auction closes, but so late that nobody else can bid after you.
It is often successful to bid around ten seconds before the deadline, but it really depends on the speed of your Internet connection. Bid closer to the deadline if you are brave and have a fast connection, and/or if you can risk being too late (perhaps you can bid on another auction for a similar product later). Bid earlier if you’re cautious and/or have a slow connection, or if you really can’t risk being too late.
One more thing: when you look at an Ebay auction and place a bid, there’s another page where you must confirm this bid. So the timing is not really when you place the bid, but when you confirm your bid! Don’t miss the deadline because you didn’t know this little caveat.
We’ve established that if you bid at just the right time (and the right price), then you win. It’s all about timing. If you sit in front of your web browser at the just the right time, and enter the bid and press the button at just theÂ right time, then you win. This requires you to be present just then — not in a meeting, not asleep, not in the kitchen or in the car or in line at the cinema.
What if you can’t be at your computer at the end of the auction? Smart people have created software that runs on your computer and “clicks the button” for you at just the right time. This is called sniping because the software acts as a sharpshooter (a sniper) on your command.
Using such software is controversial. Some say that sniping is unfair to normal bidders, while others say that sniping does exactly what humans would do. IfÂ a person places a bid closer to the deadline than the sniper, then that person wins. This sounds fair enough to me, but I’m biased: I am using sniping software, and I’m winning the auctions (unless they go higher than my maximum bid, of course).
How much to bid
First, a short explanation: This is all about finding the maximum price you would be willing to pay. The bidding system works in your favor, so you will probably end up paying less than your maximum. Don’t start with a low bid and then bid again later with a higher price — if you do that, you’re sure to either lose, or needlessly pay a higher price. For now, focus on the maximum price. We’ll get to the details later.
So how much will you bid? This question is difficult because it’s very subjective. What’s a used smartphone worth to you? What’s an embroidered napkin worth? It depends on who you are and what you like. But one thing is always true: The price can rise beyond what you are willing to pay. Some people would pay more for a cellphone, some people would pay less. Those people are irrelevant to you. The only important thing is how highly you value the product, regardless of your reasons.
So once you’ve figured out what it’s worth to you, you can bid with confidence. Here’s how to find that price:
- Decide what the product is worth to you. Remember this as the maximum price you are willing to pay.
- Would you still buy it if it cost ten cent more? If yes, then that’s your new maximum price.
- Repeat that question until you say, no I will not buy it at that price. You now know your true maximum price.
- Make sure that you’re not overpaying: If you can buy it new for less, then do that instead.
Now that you’ve determined the price, and you’ve learned when to place your bid, youÂ can go into business! You might discover that when you win an auction, you may end up paying less than your maximum. Why is that? The reason is the way Ebay’s bidding system works: the bid you enter is not your actual bid, but your maximum bid. When you place a bid, Ebay will only raise the auction price enough to overbid every other bidder’s maximum bid. Let’s look at an example:
Let’s assume that the maximum bid from all other bidders was â‚¬15 and you bid â‚¬30 (because that’s the value you determined above!), then Ebay will only increase the price to â‚¬15,50 because that’s enough for you to win!
Other bidders don’t know what maximum you entered; they just see the current winning bid. So if another bidder would place a â‚¬20 bid, Ebay would raise the winning bid to â‚¬20 to match his bid, and then raise it to â‚¬20,50 for you because you already entered a higher maximum bid!
Let’s now assume that nobody places further bids. Now you’ll see that you win the auction for â‚¬20,50 even though you entered $30. Your maximum bid wasn’t needed.
Of course it could happen that another bidder places a â‚¬40 bid, in which case you’ll lose. But you won’t mind because you decided that it’s not worth that much. Do you regret that? Then you didn’t do your homework about your true maximum price!
How to sell at the highest possible price
Successful selling is easier than buying, because the rules are few and simple.
More buyers mean higher prices. You get higher prices when more people know about your auction, because they all bid, and every bid raisesÂ your price! So you must attract as many buyers as you can. Follow two very simple principles to get the most out of your sale:
- Make your product attractive. If there’s no picture and no description then nobody is going to be interested. But when you add beautiful pictures and a great description, more buyers notice it.Â More on that below.
- make your auction end on a Sunday afternoon. If more buyers mean higher prices, then make sure your auction ends at a time when most of them can participate in the bidding. Pick a weekday and a time of day when you think most of your buyers can participateÂ (consider time zones!).
Make your product attractive
Your customers can’t walk into your store and touch your products. The product description is all they have to go by, so make the most of it. Pay special attention to these 4 areas:
- Title and category/categories
- Sale conditions
You must make sure that buyers can find your product when they search for it. Make sure that the title contains obvious keywords such as make and model, and that you select the correct product category. Depending on the product and expected sale price, it can be smart to select several product categories even though they cost a fee.
The photos must be great. Make sure that buyers can recognize exactly what you’re offering. Make sure the images aren’t too dark, and that there isn’t any disturbing background (your underwear) or reflections (you’re not wearing any). As with the categories, it can be smart to add many photos even though they cost a fee: If you’re selling a car, provide more pictures; if you’re selling a pencil, a single picture will do.
Use the description to provide as much information as you can. Every detail counts toward attracting more buyers because better information raises their confidence that they are buying the right thing.
Last but not least, specify your selling conditions. Do you offer a warranty? Refund? Not shipping to Nigeria? This should protect you from disaster once the product is sold.
More tricks in the toolbox
Buyers, pick your auctions with care. If sellers are encouraged to end their auctions on Sunday afternoons because there are more bidders at that time, then the opposite is also true: Buyers should look for auctions that end when few other bidders are around (like Tuesday mornings) because fewer bidders mean lower prices.
It doesn’t end here. Some people make a very comfortable living off of Ebay. There are a million other tips, and I couldn’t describe them all even if I tried. Many books have been written about this. But I believe that I’ve now described the most important principles that everybody should know about.