Section 3.3. Bid to Win | eBay[c] The Missing Manual

3.3. Bid to Win

eBay newbies often complain that it's hard to win the auctions they bid on. Sometimes there's too much competition. Sometimes another bidder wins by just a couple of cents . Other times, a bidder thinks she's winning, then someone outbids her during the last minute of the auction, with no time left for a response. This section shows you the bidding strategies that will help you win more auctions.

3.3.1. How to Win by Two Cents

After you've bid in a few auctions, or even if you're just looking around the site, you've probably noticed that some auctions have bids in odd amounts like $14.53 or $267.32. Bids like this are the work of bidders who've learned to use bid increments to their advantage. The bid increment is how much a bid must increase over the current price to register as a bid. For example, if the current price is $14.00 and you try to bid $14.01, eBay won't accept your bid, because it's not a full increment above the current price; you'd have to bid $14.50 or more.

Bid increments are determined by eBay and the current price of the item, as you can see in Table 3-1. As the price of the item passes certain threshold amounts, the bid increment increases .

Table 3-1. Bid Increments: As the Price Goes Up, So Does the Minimum Bid

Current Price	Bid Increment
$0.01$0.99	$0.05
$1.00$4.99	$0.25
$5.00$24.99	$0.50
$25.00$25.99	$1.00
$100.00$249.99	$2.50
$250.00$499.99	$5.00
$500.00$999.99	$10.00
$1,000.00$2,499.99	$25.00
$2,500.00$4,999.99	$50.00
$5,000.00 or over	$100.00

So how can you beat out another bidder by just two cents? The minimum bid increment is five cents; won't eBay reject any bid that doesn't win by at least that amount?

The answer lies in the proxy bidding system (Section 2.2). The secret is that your bid has to be at least one full increment above the price that's current at the moment you place your bid . As long as you meet that requirement, your bid can be any amount you want, and eBay's computer will take your bid up to its max, but not above. So when a bidding battle erupts, if your maximum bid is just a few cents higher than another bidder's max, eBay takes the higher bidyours.

3.3.1.1 For example

Here's an example. If the opening price for a video game is $9.99 and you make a maximum bid of $15.99, eBay's proxy bidding system bids the smallest amount possible on your behalf , while keeping your secret maximum bid hidden. In this case, the opening bid of $9.99 is the smallest bid possible, so your current bid is $9.99. When another bidder comes along (call her game-raider), she sees your current bid of $9.99 but has no idea of what your maximum bid might be. All game-raider has to do is place a bid that is one or more bid increments higher than the current bid: $9.99. As long as she meets that requirement, she's free to type in any amount as her own maximum bid. The maximum bid is a hard-and-fast limitit says "Absolutely no more than this amount"and eBay can't stretch that maximum amount just to make it to the next bid increment.

So if game-raider types in $16.01 as her maximum bid (two cents more than your max), those two cents count. A proxy bidding battle takes place behind the scenes, raising the bidding by one increment each round, until someone's maximum is surpassed, in this case making game-raider the high bidder. Thanks to proxy bidding, whoever has the highest maximum bid takes the lead. In this case, your maximum bid is $15.99, and proxy bidding won't bid for you beyond that amount. But even though game-raider's is just a little higher, the higher bid prevails.

If game-raider had typed in $17.01 as her maximum bid, the current bid would show as $16.49: one bid increment over your max of $15.99. eBay raised her bid one increment, keeping her upper limit a secret. If you came back and bid $16.99, the high bid would be $17.01game-raider's max is still higher than yoursand you'd still be outbid by two cents.

3.3.1.2 The moral of the story

The key here is to realize that bid increments come into play at the time a bid is placed , not after the dust settles in a proxy bidding battle. As long as your bid is one full increment over the current price when you make the bid, it does not have to be a full increment over your competitor's maximum bidit just has to be higher.

So instead of getting beat out by two or three cents every time, use bid increments and maximum bids to your own advantage. To beat another bidder by a couple of cents, don't think in even numbersalways add two or three cents to your maximum bid.

Tip: Adding a few cents to your maximum bid is particularly effective when you're sniping. The next section explains sniping in detail.

WORD TO THE WISE
Don't Be a Nibbler

Sometimes new buyers try to win an auction by the smallest amount possible. This practice, called nibbling , involves making lots of small bidsjust an increment or two over the current priceand hoping to hang on to the high bidder spot.

Nibblers are usually outbid. They don't bid what they're willing to pay, just what they're hoping to get away with. Any other bidder who is willing to pay what the item is actually worth will almost always win out over a nibbler. All the nibbler does is drive up the price that the winning bidder pays.

Not only that, but a nibbler's bidding habits are extremely easy to spot. If a smart bidder sees a nibbler steadily bidding and rebidding $1 more until the nibbler finally takes the lead, the smart bidder knows exactly what it'll take to snipe the auction out from under them, winning by a hair in the final seconds.

The best and most basic bidding strategy is to bid the maximum you're willing to pay. You'll win more auctions that way, and often for less than your maximum bid.

3.3.2. Swoop in and Snipe

Last-second bidding is called sniping , and 15 percent of all eBay auctions are won within the last minute. If you've ever been sniped, you know how frustrating it can be when someone swoops in at the very end of an auction and outbids youoften by a small amount. You might have been willing to go back and bid another dollar or two, but thanks to the last-second action of the sniper, you didn't have time. On the other hand, you can use sniping to your advantage by outbidding other buyers when an auction is down to the wire.

Note: Sniping is controversial , but it's perfectly legit. eBay recommends letting the system handle your bids in a regular proxy bid, but it lets eBayers snipe to their hearts' content. (Sniping merely uses eBay's proxy bidding system to place bids as late as possible in an auction.)

3.3.2.1 Snipe it manually

If you've never sniped an auction, you should try it at least once. It's excitingyou don't know until the last tick of the clock who wins or for how muchand when the dust settles and you're the winner, you get to savor the thrill of victory. Even if sniping isn't your idea of fun, trying it for yourself lets you experience for yourself how the competition operates.

If you're going to be at your computer when the auction ends, here's how to snipe manually:

Decide on your maximum bid .

Figure this out well before the auction's end, taking shipping, insurance, tax (if any), and any other costs into account.
With about 10 minutes left in the auction, check out the auction page .

If the bidding has already gone higher than your max, this isn't the auction to snipe.
Open a second browser window .

Resize each of your two windows so that you can see them side by side on your screen. In each window, open the auction page for the item you want to snipe, as shown in Figure 3-17.
Get ready to make your bid .

In one of the windows, click the Place Bid button (sign in if eBay asks you to) and type in your maximum bid. (Keep in mind that the current high bid is not necessarily the high bidder's maximum bid.) Click Continue, but stop there. Don't click Confirm Bid until you're ready to snipe.
In the other window, refresh the auction page to see how much time is left and whether any bidding action is going on .

When the clock is ticking down to the last minute, it's time to sit up and really pay attention. You might be tempted to watch the auction from your My eBay page, but don't do this if you're going to snipe. My eBay updates more slowly than you can update progress on the auction yourself by watching the auction page and frequently clicking your browser's Refresh or Reload button.
Tip: If you're dialing into eBay (rather than using a high-speed connection), you may find it easier and faster to click to the Bid History link and refresh that page instead of the actual auction page. The Bid History page has almost no graphics, so it loads very quickly, keeping you up to speed with what's happening in the auction.
Keep refreshing the auction page, watching as the time ticks down to seconds .
Snipe it!

In the last 10 seconds or so, click the Confirm Bid button in the second window, where your bid is waiting. If your bid is higher than any other late bids, you've just sniped an auction!

Figure 3-17. Snipe manually by opening two browser windows: one to keep an eye on the auction (both the high bid and the ticking clock), and the other to set up your bid. In the last few seconds of the auction, as late as you dare, click Confirm Bid. The later you bid, the less chance the competition has to come back with a new bid.

Note: Manual sniping works best if you have a high-speed Internet connection. You can hold your bid until the last few seconds, confident your bid will make it to eBay's servers in time. If your Internet connection is on the slow side, give yourself a few extra seconds to place your bid.

As you watch the auction, you might find that bids start coming in during the last couple of minutes. A lot of bidding action might make you revise your snipe bidor convince you to try again with a different auction.

Tip: If you think the whole sniping thing is more frustrating than fun, check out Appendix B. It lists other auction sites, some of which extend the auction time when a bid comes in during the last few minutes, giving all bidders a chance to respond to any would-be sniper before the auction ends.

3.3.2.2 Snipe it automatically

Even if you get a kick out of do-it-yourself sniping, you can't always be at your computer when an auction is about to end. Happily, sniping services are available that will snipe on your behalf. When you sign up for a sniping service, you give the service your eBay ID and password so that the automated sniper can log in and bid for you in the final seconds of the auction. (If sharing your secret info freaks you out, see Section 3.2.2 for the down-low on downloadable sniping software.)

Many sniping services offer more than just last-minute bidding. For example, if you just have to have an iPod and you just have to have it for $200 even, you can create a bid groupthe sniping service will place snipes on one iPod auction after another until you win for $200 or less, then automatically cancel any pending snipes (so you don't end up with three iPods). You can also find search tools and tracking services on many sniper sites, and some offer buttons you can add to your Web browser's toolbar that will let you set up a snipe without even leaving eBay. If you're interested in an automated sniping service, check out several (most offer a free trial), ask eBay acquaintances about their own favorites, and then decide which one is best for you.

Tip: One advantage to using an automated sniper over eBay's regular proxy bidding is that if you change your mind before the auction ends, you can cancel a snipe right up until a few minutes before the auction's end. With proxy bidding, your bid is a promise to buy.

Here are some popular sniping services (prices and policies, of course, may change):

eSnipe (www.esnipe.com) . After a free trial period, eSnipe charges one percent of your winning bid (minimum 25 cents, maximum $10) whenever it successfully snipes an auction for you. If you don't win the auction, eSnipe doesn't charge.
AuctionSniper (www.auctionsniper.com) . Your first three wins are free. After that, AuctionSniper's fee scale ranges from 25 cents to a maximum of $5, based on your winning bid.
EZ sniper (www.ezsniper.com) . Three successful snipes free, then a per-win percentage fee between 10 cents and $10.
BidSlammer (www.bidslammer.com) . This site calls itself a "win management service": It integrates searching, tracking, and sniping. BidSlammer's Auction Tribune lets you create a list of searches, tracks your searches across 200 e-commerce sites (not just eBay), and emails you results once a day. The free trial is three snipes; then the fee range goes from 10 cents to $5 per win.
Bidnapper (www.bidnapper.com) . Available by subscription after a 10-day free trial, Bidnapper adds a few features: seller profiles strip out all the positive feedback and show you just the negative (when you're looking for troubling patterns); a feedback automator means you can leave feedback from the Bidnapper site; and Bidnapper's search feature, the Shadow, lets you search by keyword or bidder to set up your snipesif someone keeps winning auctions you're bidding in, the Shadow lets you target that bidder and start sniping his auctions. Subscriptions range from $6.95/month to $45.95/year, or you can buy blocks of snipes.
PhantomBidder (www.phantombidder.com) . Two-week free trial with unlimited bids. Besides a subscription plan, PhantomBidder offers fixed-price sniping: you pay $6 for 10 bid credits (you spend one bid credit for each auction PhantomBidder wins on your behalf) or $10 for 20 bid credits. PhantomBidder lets you leave feedback from its site, and it lets you snipe all international eBay sites except Korea's.
HammerSnipe (www.hammersnipe.com) . This one is free for occasional , basic snipingup to three snipes per weekbut every time you log in, you have to navigate past a couple of pages urging you to subscribe or donate money before you can set up your snipe. And if you want advanced options, like bidding on a group of auctions or the ability to specify when your snipe will hit, you have to subscribe to HammerSnipe's "priority service," which starts at $8.95/month. HammerSnipe offers a free toolbar called PowerTool that allows one-click sniping as you browse auctions. You can download PowerTool at www.hammertap.com/powertool.
AuctionStealer (www.auctionstealer.com) . AuctionStealer tracks an unlimited number of auctions and lets you make up to three free snipes each week. You can bid on multiple items, view past snipes, and cancel a snipe at any time if you change your mind. Or you can upgrade to priority service to snipe in bid groups, specify your precise snipe time, and snipe as often as your heart desires.

Tip: Merlin Software's JustDeals (www.pctechzone.com) is a Windows-based search-and-buy engine that combs through Buy It Now auctionsand only BIN auctionsto find you the best price. Tell JustDeals what to look for and how much you want to spend, and let it do your bargain-hunting for you. The program will notify you with a desktop alert, an email, or a text message to your cell phone (your choice). It can even buy the item for you before someone else finds the deal. It's kind of like having an automatic sniper for BIN auctions.

If you don't feel comfortable sharing your eBay ID and password with a third party, you're not locked out of the automated sniping game. You can download and install a snipe program on your computer. Many of these programs offer other functions, such as search filters and auction tracking, in addition to sniping. Even though you don't have to be at your computer to snipe using these programs, you do have to leave your computer turned on so it can connect to the Internet and start sniping. Prices vary; BidSage (for Windows) and JbidWatcher (for Macs) are free. The following downloads are for Windows, except where noted:

Final Bid (www.v-com.com)
AuctionSleuth (www.auction-sleuth.com)
Auction Sentry (www.auction-sentry.com)
Snipe (www.telience.com)
BidSage (www.auctionsagesoftware.com)
MaxiBidder (www.colourfull.com/maxi.html); for Macs
JbidWatcher (www.jbidwatcher.com); for Macs

If you're really interested in automated searching and sniping, you may want to check out the Auction Software Review (www.auctionsoftwarereview.com). Shown in Figure 3-18, the Auction Software Review evaluates dozens of sniping services and programs. The site charges $9.99 for a lifetime membership; in return, you get candid opinions on what does and doesn't work. The Auction Software Review covers software related to selling, searching, feedback, and morenot just sniping.

Figure 3-18. Joining the Auction Software Review Web site is a good idea, whether you're looking for the fastest sniper or the most flexible tracking database. The left-hand menu shows the kinds of tools available. Besides reviews of software for buyers and sellers, the site offers eBay statistics, discussion boards , and FAQs and articles about buying and selling. Some of these resources are free; others are for members only.

3.3.3. Other Proxy Bidding Strategies

The idea behind proxy bidding (Section 2.2) is that you bid the most you're willing to pay, hoping to get the item for less but resigning yourself to letting it go if someone else bids more than your maximum bid. eBay recommends that you bid early, bid your max, and hope to win. This sounds great in theory, but all too often, you find yourself outbid by 50 cents in the closing seconds of an auction, realizing too late that you wouldn't have minded paying another dollar or two.

Tip: One eBayer described his proxy bidding strategy like this: don't bid for a bargain and hope to win. Bid to win and hope for a bargain.

Of course, sniping, described in the previous section, is one way to work the system. But if you're not comfortable with that method, you're not left in the cold. For the absolute best chance of winning an auction, tweak eBay's official recommendation just a bit and follow this simple three-step strategy:

Figure out your true maximum bid .

In timed auctions, it might feel like the last bid wins, but this isn't necessarily true. The highest bid wins, no matter when someone placed it, as long as it comes in before the clock's done ticking. So the first thing to do is figure out your true highest bid. Research the item, online or at the local mall, to determine a reasonable price. And don't forget to factor in any shipping or insurance costs. Then, ask yourself: would I be willing to pay just 50 cents more? A dollar more? Two dollars? Five? When you can't imagine paying a penny more (even if someone else would), that's your maximum price.
Time your bid late in the game .

If the auction still has several days to run, don't bid yet. No need to call other shoppers' attention to an item you want. You, savvy shopper, want to bid as late as you can in the auction. (When other buyers are scanning their search results page, it's human nature to want to check out the auctions that already have some interest. If someone's made a bid, at least one person thinks the item is worth buyingthat fact makes it worth closer inspection.) If you're going to be asleep or at work when the auction ends, there's no need to stay up late or cut out of a staff meeting so you can post your bid in the last five minutes. But put in your bid as late as is reasonable, given your schedule.
Let the system work its magic .

eBay's proxy bidding system bids the minimum amount required on your behalf: either the starting price (if no one else has bid), or one or more bid increments (if there's already a bid on the item). As new bids come ineven from sniperseBay's proxy system continues to bid for you, little by little, until you win the item or the price sails past your maximum (in which case, you don't want it anyway).

3.3.4. How to Win Dutch Auctions

Dutch auctions might look like a free-for-all, with lots of people bidding on numerous items, but what they really offer are bargains for a few lucky winners. In a Dutch auction, a number of identical items are for sale, and they go to the highest bidders until the quantity runs out. The cool part is that all winning bidders pay only the price that was bid by the lowest winning bidder. (For more on how Dutch auctions work, see Section 1.4.7.)

Think of it this way. There's a line drawn in the sand. All the winning bidders are on one side of the line; all the losers are on the other side. The closer you stand to that line, the higher your chances of being nudged over to the losing side. So when you join in the bidding on a Dutch auction, you want to bid a little higher than you have to, to make sure you're on the winning side of the line when the auction ends.

Here's an example. You're shopping for an ink cartridge for your printer. You find a Dutch auction for the right brand and model number. The seller has four available. The opening bid was $9.99, the lowest winning bid at the moment is $10.99, and the current highest bid is $15.99. The auction has only half an hour left to run, and you're in competition with six other bidders. Table 3-2 shows how the bidding stacks up.

Table 3-2. Dutch Auction Bidders

eBay ID	Bid Amount	Quantity Wanted	Quantity Winning
bidder1	15.99	1	1
bidder2	14.49	1	1
bidder3	12.49	1	1
bidder4	10.99	1	1
bidder5	10.49	1
bidder6	9.99	1

UP TO SPEED
Winning with Proxy Bidding: An Example

You're looking for a 2,000-count case of fresh paintballs and can buy them locally for about 45 bucks plus tax. You get on eBay, hoping to find them for less. Eventually, you find an auction that looks good: a brand-new , unopened case with a starting price of $19.99. Shipping costs $10 even, so you're looking at $29.99, which is still under the price you're willing to pay. The seller's feedback looks good. This auction is worth going for.

You'd be happy to get the paintballs for $29.99, including shipping, but you'd be willing if necessary to pay more than that. If your final cost were $34.99, you'd still be ahead of the mall price by a little more than 10 dollars. It would seem a shame to lose a good deal over a few cents; after giving it some thought, you decide that a total cost of $39.49 is as high as you're willing to go. More than that, and you might as well drive to the mall and pick up the paintballs there.

You subtract the $10 shipping fee from the total amount, making your bid $29.49. The auction has a little over a day to run, and no one has bid yet. You add the paintball auction to your watch list and will take another look when you get home from work tomorrow, when the auction will be down to its last two hours.

When you check the next day, the number of bids is still zero. Because the auction will close soon, you decide to place a bid of $29.49. You appear as the high bidder, at the opening price of $19.99. If no one else bids, you'll win them for that price. If someone else who's been watching the auction tries to snipe it, however, you've authorized eBay to bid up to $29.49 for you.

In the last minute of the auction, things start happening. Your bid jumps from $19.99 to $20.99someone tried to beat your opening bid by just 50 cents, but proxy bidding immediately raised your bid by one bid increment to beat the attempted snipe. The price jumps again, but you're still the high bidder. When the auction ends, you've won the paintballs for $23.49. The sniper set his bids too low, trying to win by a few cents, but ran out of time before discovering your bid cap. When the clock ran out, you won. You fended off a sniper and even came in with a little more than the $10 savings you were hoping for.

In this Dutch auction, there are four high bidders: bidders 1 through 4. If the auction were to end right now, bidders 1 through 4 would each win one ink cartridge, and each would pay $10.99the lowest winning bid. But the auction is still running, and you want to bid. You must bid higher than $10.99. If you bid $11.99, your bid pushes bidder4 across the line into the "loser" poolbut now you're the one whose bid is on the line.

Instead, aim higher. You want your bid to be a couple of steps away from that line in the sand. If you bid an amount between bidder2's $14.49 bid and bidder3's bid of $12.49say, $12.99you knock bidder4 out of the bidding and nudge bidder3 to the line. If no more bidding action takes place after you make your bid, you and bidders 1 through 3 will each get a cartridge for $12.49.

What if you want two cartridges? You can still bid $12.99 (each), but your bid will knock out bidders 3 and 4 both, because only four ink cartridges are up for auction. That makes you the lowest bidder, and the next one liable to be shoved across the line. If you want two cartridges, consider bidding an amount between bidder2's $14.49 and bidder1's $15.99 to protect yourself from being knocked out of the auction. You could still be out of the bidding if another bidder comes along and bids higherfor instance, someone could come along and bid $17.99 apiece for all fourbut the higher you place your bid in the bidding hierarchy, the better your chances of staying in the auction.

Note: As in all auctions, don't bid more than you're willing to pay. You'll pay less than your bid in a Dutch auction if someone else has made a lower winning bid, but this isn't guaranteed . Your bid might be the lowest winning bid, so be ready to follow through.

Can you snipe a Dutch auction? Sure. Follow the same strategy of placing your bid a couple of steps higher than the lowest winning bidder, but do so in the closing seconds of the auction. Depending on how many other snipers are around, you'll knock out the low bidder, but you'll still probably get the item for less than you bid.