Why do people on ebay bid up items early in the auction?

Started Aug 21, 2011 | Discussions
IcyVeins
Senior MemberPosts: 1,342Gear list
Like?
Why do people on ebay bid up items early in the auction?
Aug 21, 2011

For example I am scouring e-pl1 + kit lens auctions, and what almost always happens is a few people start bidding when there are several days left and bid the price up to $100-150 (there is no reserve), well what's the point? None of those bids are ever going to win the auction and all they are doing is artificially inflating the price for later bidding near the end of the auction.

If they were smart they would either (a) make a serious maximum bid, if they were unable to be there when the auction ended, or even better, (b) don't make a bid at all until a few seconds before the auction ends, then place your maximum bid so that nobody else can see it in time to react to it. That would create a de facto silent auction but with the benefit that the winning bid may not have to pay his maximum bid (due to how ebay's bidding system work, it outbids automatically in increments depending on the current price.)

So the only result of these early bids is to benefit the seller by driving up the price. If someone has the high bid and you place a high enough bid to go above their maximum, all that does is give them an excuse to place a higher bid. Whereas they would not do this is you refrained from bidding till the last few seconds because they would not know they had competition. Am I missing something or are the vast majority of people bidding on used ebay cameras just plain dumb?

 IcyVeins's gear list:IcyVeins's gear list
Sony Cyber-shot DSC-W290
beshannon
Veteran MemberPosts: 4,203Gear list
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to IcyVeins, Aug 22, 2011

IcyVeins wrote:

all they are doing is artificially inflating the price for later bidding near the end of the > auction.

They could be anxious buyers but more than likely they are shill bidders.

Just one of the reasons I gave up on that site years ago.

 beshannon's gear list:beshannon's gear list
Panasonic Lumix DMC-ZS7 Sigma DP2s Nikon Coolpix AW100 Nikon D800E Nikon AF-S Nikkor 16-35mm f/4G ED VR +5 more
Reply   Reply with quote   Complain
onlooker
Veteran MemberPosts: 3,822Gear list
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to IcyVeins, Aug 22, 2011

IcyVeins wrote:
Q:

Why do people on ebay bid up items early in the auction?

A:

what they are doing is artificially inflating the price for later bidding

Reply   Reply with quote   Complain
IcyVeins
Senior MemberPosts: 1,342Gear list
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to onlooker, Aug 22, 2011

That's not an answer.

 IcyVeins's gear list:IcyVeins's gear list
Sony Cyber-shot DSC-W290
Reply   Reply with quote   Complain
hjr13
Senior MemberPosts: 1,250Gear list
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to IcyVeins, Aug 22, 2011

Are you saying people shouldn't be allowed to bid until the last few minutes? That would be the only way you would not get those bids near the beginning.

Reply   Reply with quote   Complain
IcyVeins
Senior MemberPosts: 1,342Gear list
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to hjr13, Aug 22, 2011

No. I'm just wondering if there's ever possibly a good reason to do that if you're actually interested in buying the product. And ranting a bit because I suspect there isn't.

 IcyVeins's gear list:IcyVeins's gear list
Sony Cyber-shot DSC-W290
Reply   Reply with quote   Complain
jedinstvo
Senior MemberPosts: 1,914
Like?
Only one bid counts: the winning bid
In reply to IcyVeins, Aug 22, 2011

eBay gives us something called "price discovery." A few years ago I was looking for a nice Visoflex III, a Leica gizmo that enables you to use long or macro lenses on an M Leica. Every camera store in the world (I checked them all!) had a nice Visoflex III in the box for $250. I said "that's nuts! Nobody will pay that!" So then one comes up on eBay. How much did it sell for ? $250? No way Jose. It sold for $48. So that's the selling price of a Visoflex III. I know that sellers on eBay do sneaky stuff with the early bids. But so what? If somebody doesn't want to bid more than the seller's own phony-baloney bid, then the seller is also the buyer. Some stuff sells for too much, and some stuff goes for cheap. I've gotten some real deals on eBay. Not a lot, but some. And I've made a killing more than once when somebody paid more than they should have. That's why they have auctions. To find out how much somebody will pay for your black paint M4, mint in the box.

Reply   Reply with quote   Complain
Marty4650
Veteran MemberPosts: 9,644Gear list
Like?
Here's why
In reply to IcyVeins, Aug 22, 2011

There are only three reasons someone might bid a price up quickly....

1. They could be shill bidders, as others have pointed out
2. They could be idiots
3. They might not know any better

I think you should not underestimate the third group. Ebay has MILLIONS of bidders, and people are constantly joining the site. It takes a while to learn the ropes and understand how to increase your odds of winning.

Some new members might not know they are effectively driving up the price for themselves by bidding very early in an auction.

I remember one time my teenaged son once asked me if I would buy a Playstation for him on ebay, because "it was only selling for 4 cents." Even after I explained to him that there were still six days to go, and that 4 cents wasn't the selling price, just the current price... he still assumed I was lying to him.

Here are some more tips on how to bid on ebay:
http://marty4650.blogspot.com/2010/09/everything-you-wanted-to-know-about.html

 Marty4650's gear list:Marty4650's gear list
Olympus PEN E-PL2 Olympus OM-D E-M5 Panasonic Lumix G 14mm F2.5 ASPH Olympus M.Zuiko Digital 14-42mm 1:3.5-5.6 II R Olympus M.Zuiko Digital 45mm 1:1.8 +4 more
Reply   Reply with quote   Complain
OvinceZ
Senior MemberPosts: 2,587Gear list
Like?
Buyers vs sellers
In reply to IcyVeins, Aug 22, 2011

If you are a buyer you want to get the cheapest price. If you are a seller you want to get the highest price you can. Except for cars and perhaps some other items the seller cannot remove an item from an auction as there are no reserves. If the item is an expensive camera or lens and the bids are low with a day to go what does the seller do? Suppose there are several people bidding on an item. What you don't know is what the highest bidder is prepared to pay. So I guess some people use shill bidders to find out. This does increase the price but that is exactly what the seller wants. As long as this is done in small increments I suppose it is something people do because they don't want to let expensive items go for peanuts. I think most auctions end up with fair prices. The buyer and seller are usually okay with the results.

The problem with online auctions is that you don't know who is bidding because it is mostly anonymous. There is a lot of excitement for all parties for very expensive items. The trick of assessing what others might pay and then putting that bid up with 15 seconds to go is an art. Suppose you want an item badly so want to maximize your chances yet not bid too much. So you refrain from bidding in the last hours and just watch what others are doing. You then figure out both what you think others will bid and what your maximum will be. Suppose an item has a bid of $1000. You are prepared to go to $1200. You think others might, too, so what do you do? Well, you might put your highest bid at $1252. You assume others might bid $1250 so add a bit more. This is where the sweating occurs! We are assuming the item is worth much more and if you had enterred the bidding at $1000 the end result might have been much more than $1250.

Vince

 OvinceZ's gear list:OvinceZ's gear list
Sigma DP3 Merrill Canon EOS 5D Mark II Canon EOS 60D Sony Alpha NEX-7 Sony Alpha 7R +14 more
Reply   Reply with quote   Complain
Gesture
Senior MemberPosts: 2,062Gear list
Like?
Re: Buyers vs sellers
In reply to OvinceZ, Aug 22, 2011

"The problem with online auctions is that you don't know who is bidding because it is mostly anonymous." It has changed to the disadvantageous of bidders, I believe. In the old days, you knew the identity of the other bidders and you could check what else they were bidding on actively, as well as review what they had purchased in the past. That has all changed. You really don't know if the other bidders are genuine and, thus, the wisdom I guess of the first person. I think that has diminished, not increased, bidding fervor??

Reply   Reply with quote   Complain
JulesJ
Forum ProPosts: 32,761
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to IcyVeins, Aug 22, 2011

I once questioned the high value a friend and antique dealer had put on a chines wooden vase. He replied the value is the price that someone will pay me. No less, no more. i don't see your problem with eBay. I love it. you get to bid what you think something is worth to you, not to someone else. And you can bid whenever you like. I tend to bid near the end of a sale's time period if i wnat to bid more than the exisiting bids so far, but sometime I put in an early bid too. This ensure you get notification of end of sale and pute you in the running.

IcyVeins wrote:

For example I am scouring e-pl1 + kit lens auctions, and what almost always happens is a few people start bidding when there are several days left and bid the price up to $100-150 (there is no reserve), well what's the point? None of those bids are ever going to win the auction and all they are doing is artificially inflating the price for later bidding near the end of the auction.

If they were smart they would either (a) make a serious maximum bid, if they were unable to be there when the auction ended, or even better, (b) don't make a bid at all until a few seconds before the auction ends, then place your maximum bid so that nobody else can see it in time to react to it. That would create a de facto silent auction but with the benefit that the winning bid may not have to pay his maximum bid (due to how ebay's bidding system work, it outbids automatically in increments depending on the current price.)

So the only result of these early bids is to benefit the seller by driving up the price. If someone has the high bid and you place a high enough bid to go above their maximum, all that does is give them an excuse to place a higher bid. Whereas they would not do this is you refrained from bidding till the last few seconds because they would not know they had competition. Am I missing something or are the vast majority of people bidding on used ebay cameras just plain dumb?

-- hide signature --

Julesarnia on twitter
Vibeke Dahl on Twitter is..
https://twitter.com/DahlPhotography

Reply   Reply with quote   Complain
JulesJ
Forum ProPosts: 32,761
Like?
Re: Buyers vs sellers
In reply to Gesture, Aug 22, 2011

Like i said before, it doesn't matter if the other bids are mates of the seller or not. you just bid to what you are prepaered to pay. If the other bids are friends, or indeed the seller himself he will not sell to an outsider if he is stupid and over bids. I love eBay for buying and selling.

Gesture wrote:

"The problem with online auctions is that you don't know who is bidding because it is mostly anonymous." It has changed to the disadvantageous of bidders, I believe. In the old days, you knew the identity of the other bidders and you could check what else they were bidding on actively, as well as review what they had purchased in the past. That has all changed. You really don't know if the other bidders are genuine and, thus, the wisdom I guess of the first person. I think that has diminished, not increased, bidding fervor??

-- hide signature --

Julesarnia on twitter
Vibeke Dahl on Twitter is..
https://twitter.com/DahlPhotography

Reply   Reply with quote   Complain
Kikiss
Junior MemberPosts: 30
Like?
Re: Why do people on ebay bid up items early in the auction?
In reply to IcyVeins, Aug 22, 2011

I have exactly the same questions myself !!! Differentiating between inexperienced bidders/buyers and the rest, I can see no reason other than driving the final price skywards!

I remenber one time recently, when I watched just two (!!!) bidders, bidding agaist each other ferociously for four days on no end until one of them eventually lost and the price paid was waaaay too high to be reasonable. After all, that was supposed to be an auction. People go to auctions to try and get stuff at reasonable prices and I am not talking about rare things and valuables here (i.e not a Sotheby's auction )! Sellers at auctions give low starting prices to lure potential buyers looking for a good value for money.

I do not know if they are shill bidders or not (supposedly ebay restricts this kind of activity to the minimum - but I am not sure anymore) but to me what they really are, is "spoilers of a good bargain".

Kikiss

Reply   Reply with quote   Complain
Mark Smith
Veteran MemberPosts: 5,642Gear list
Like?
Re: Here's why
In reply to Marty4650, Aug 22, 2011

Marty4650 wrote:

There are only three reasons someone might bid a price up quickly....

1. They could be shill bidders, as others have pointed out
2. They could be idiots
3. They might not know any better

I think there are more groups try

4. I am going to be on holiday, making love or at work when the auction ends, no one has shown interest they may not have noticed the item so I might win.

5, I'm a gambler lucky dip type who might be lucky to pick things up for a song if there's not much money about or an item is out of season.

Lots of people fit into those last two groups, people who don't have time (because they have a life) to sit until the last 10 seconds to bid, and are trying their luck–you never know you might be the only one interested in a 1958 Decca SXL LP of Gilbert and Sullivan–stranger things happen!

Reply   Reply with quote   Complain
joyclick
Senior MemberPosts: 2,673
Like?
Re: Play by your rules.
In reply to IcyVeins, Aug 22, 2011

If you start looking over your shoulders and try to see what others are doing you will be invariably "out-bidden".

Have a limit in your mind at the outset-a minimum and a maximum.Play within those two,if a bid crosses the upper limit-QUIT.

There will be yet another day-yet another item.If you "must win" "this bid".you will be lost.

Gajanan

-- hide signature --

student4ever

Reply   Reply with quote   Complain
LJSmak
Senior MemberPosts: 2,006
Like?
Re: Here's why
In reply to Marty4650, Aug 22, 2011

Marty4650 wrote:

Some new members might not know they are effectively driving up the price for themselves by bidding very early in an auction.

What these people could also be doing, is making sure there are less people left over that are willing to play the "end-game" at the end of the auction.

Having less bidders playing the end-game is VERY interesting if you really want an item.

You may still end up with a reasonable price, and maybe even lower than with a thousand people all bidding at the last moment.


Lourens

Reply   Reply with quote   Complain
Marty4650
Veteran MemberPosts: 9,644Gear list
Like?
Snipeing programs have made it hard to win
In reply to Kikiss, Aug 22, 2011

Lately, I don't even bid anymore.

I just check "buy it now" prices, and if a price is decent I will just buy it.

Thanks to automatic snipeing programs, it is almost impossible to win an auction against a determined buyer. You can enter a high bid with 2 seconds left on the clock... and BANG.... somehow you get beaten by the other guy's program.

Incidentally, ebay's own automatic bidding system works the same way. It will automatically advance your bid by one small increment each time someone tops your bid.

This is a dream come true for ebay, since they love to have two automatic programs competing with each other, driving the price (and the fees) higher.
--
Marty
http://www.fluidr.com/photos/marty4650/sets/72157606210120132
http://www.flickr.com/photos/marty4650/sets/72157606210120132/show/
my blog: http://marty4650.blogspot.com/
Olympus E-30
Olympus E-P1

 Marty4650's gear list:Marty4650's gear list
Olympus PEN E-PL2 Olympus OM-D E-M5 Panasonic Lumix G 14mm F2.5 ASPH Olympus M.Zuiko Digital 14-42mm 1:3.5-5.6 II R Olympus M.Zuiko Digital 45mm 1:1.8 +4 more
Reply   Reply with quote   Complain
JulesJ
Forum ProPosts: 32,761
Like?
Re: Here's why
In reply to LJSmak, Aug 22, 2011

LJSmak wrote:

Marty4650 wrote:

Having less bidders playing the end-game is VERY interesting if you really want an item.

You may still end up with a reasonable price, and maybe even lower than with a thousand people all bidding at the last moment.

Very good point. There is no wrong or right about this. That's why eBay is fun and INCREDIBLY successful.


Lourens

-- hide signature --

Julesarnia on twitter
Vibeke Dahl on Twitter is..
https://twitter.com/DahlPhotography

Reply   Reply with quote   Complain
Kikiss
Junior MemberPosts: 30
Like?
Re: Snipeing programs have made it hard to win
In reply to Marty4650, Aug 22, 2011

First time I hear about Snipeing programs. I have just googled the term and the internet is full of them!!! I was thinking that everything is relatively good and fair on e-bay but I must wake up and reconsider!

That explains some of the recent losses I have had. In two consecutive occations I was beaten at virtually the last second by mere cents!! Until now I thought, it was just bad luck!

Thanks for the heads up, Marty!

Kikiss

Reply   Reply with quote   Complain
normsmith
Veteran MemberPosts: 3,372
Like?
I bid early sometimes
In reply to joyclick, Aug 22, 2011

I will put an early bid in sometimes if;

I just fancy a punt and I just type in the top price I am willing to pay

or, if I want to lock down the description - the seller cannot make subtle changes to the description once a bid has gone in, without it appearing in a new window as an amendment.

or to try and compel the seller not to withdraw the item.

Reply   Reply with quote   Complain
Keyboard shortcuts:
FForum MMy threads