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How to Lose at eBay:
Pitfalls of Early Bidding
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July 2011     top of How to Win at eBay     Index of detail pages

 

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Why eBay Wants You to Bid Early

eBay and sellers encourage people to bid early is because it makes them more money.

eBay's search results show the number of bids an item has received, and the current highest bid. (Actually eBay uses a psychological trick and lies, labeling the highest current bid as "price." It's most emphatically not a price, since no one can buy the item at that level, but sucks more early bidders into bidding; thinking they can buy the item that cheaply.)

By encouraging a lot of early bidding, items look more interesting to everyone because the bid count is shown in the search results. If only two idiot early-bidders are nickel-and-diming each other to death with penny-ante bids, eBay will show each bid as if it's significant, and you might see "Bids" listed as 23, even if there are only two bidders.

The more buzz eBay can stir about a listing, the more people look at it, and the higher the bids are likely to go.

I'll be honest: when I see an item with no bids in the search results, human nature is to think there's something wrong with it.

If I see something with 25 bids, I'll check it out out of curiosity.

Never early-bid.

 

Early Bids Make You Pay Too Much

This is obvious, and eBay keeps this quiet because they make profits directly related to selling prices. eBay does everything it can to make you want to early and bid more than once, the surest ways to lose an auction while jacking up the price for the winner.

Likewise, you'll see many articles in the mass media, written by journalists, not pro bidders, who actually encourage early-bidding. For all I know, they get big gift baskets from eBay at Christmas.

In an open eBay auction, which is anything other then Buy-it-Now, you're bidding against emotional people. In every auction, there are cool-headed pros waiting it out on the sidelines to the last second, and at least one newcomer who bids with his emotions, not his reason.

When someone commits an early bid offense (any bid placed before the end of an auction so that others can see and react to it), every other early-bidder who placed a bid gets numerous notices that you just outbid him.

eBay (and all good auctioneers) do everything it can to incite auction fever, and incite otherwise reasonable people to want to outbid you, even if it's stupid, just for the sake of outbidding you. eBay sends constant text messages, emails, and more to every other bidder want to "close" them on paying more.

eBay will incite constant and certain doubt at every step of the way to early bidders to suck them into paying more. The fewer steps you take to the end of the auction, the better.

Every bidder gets automatically-generated "closer" emails like:

"It's almost yours, but you could still be outbid. You can improve your chances of winning by increasing your bid." followed by a big INCREASE BID box to click. Hee hee, eBay isn't happy that you just bid, they want you to bid too high.

If you're an early bidder, you'll especially get these emails as soon as anyone else bids:

"There's a new highest bid on this item, but there's still a chance to make it yours. Increase your bid to have a chance at winning. Don't let it get away!" followed by a big INCREASE BID box to click.

eBay is not at all like a live auction. On eBay, the real bidding only happens at the very end, as if the bids were sealed. eBay allows listings to sit out and collect early bids in the hope that suckers will try to out-do each other, and jack up the price and interest level.

There is no reason for anyone to early-bid, just as no one should share their hands at poker. Playing poker, another competitive gambling game just like eBay, is all about keeping your cards close to you. eBay bidding is the same. If you make an early bid, even just 10 seconds before the close, then everyone knows you're there, and you're a target. You'll now have 12 people all trying to outbid you. You either lose like most of them, or pay way too much.

If you bid early, everyone else gets these, even on their mobile phones, PDAs, iPhones and Blackberries, and will act on them to raise the price.

Everything eBay does is designed to make everyone think the only way to bid is to bid early. For instance, the eBay system is loaded with messages, carefully crafted by physiological operations specialists, to make you think doing the wrong thing is right.

eBay is loaded with messages like "check your status and see if you're still the high bidder," which we all know that means nothing.

The only thing that matters is who dropped in the highest bid in the last four seconds, and all the suckers who wasted a week "tracking" their positions served no purpose other than to attract more real bidders for the close, and pimp up their bids.

Never early-bid.

 

Early Bids Obligate You

Another reason why no serious bidder bids early is that once you've placed your bid, you're obligated if it wins.

If you place an early bid today, and tomorrow you find a better item, you're still stuck with the first item if you win.

Why on Earth would you want to obligate yourself to an item you haven't yet bought? Wait until the end and you're free the whole time.

Bid only at the last second, and you never have to wonder.

In the world of financial gambling, people pay or receive money for contracts called options. If someone obligates themself to a future option to buy something, they expect to be paid for the inconvenience. Don't be silly enough to obligate yourself with an early-bid, for nothing!

Never early-bid.

 

Early Bids Make Others Think the Item is More Valuable

Face it: when I see something has a lot of bids, and the price is high, I think the item is a lot more valuable than if I didn't.

When you early-bid, you're making everyone want to pay even more, and guess what? Someone will.

Never early-bid.

 

A Tale of My Own Early-Bid Offense

There was an item I once wanted. Like everything on which I bid, I had it in my watch list and was researching it all week.

The wife wanted to go to lunch right at the same time as the end of the auction, so I decided to drop an early bid an hour before the close.

I dropped a very high maximum bid (the absolute maximum I dared pay, which is how I always bid), and we headed out.

I returned, and of course some other half-crazy early bidder bid about double what the item was worth. I bid more than it was worth because it was an unusual item and it was worth what I bid to me, but this guy was just plain nuts.

If I had done the right thing, and not early-bid (or bid at all), I would have saved this nut hundreds of dollars.

If I had bid at the last second, this nut wouldn't have seen my bid, and I would have paid many hundreds of dollars less than he did.

Looking at the bid history, he saw my bid, and later bid again as the only other bidder in the last hour.

Here's a concrete example of one more way it hurts everyone when people early-bid.

If had gone to lunch and not bid, this same guy would have won his item, but paid hundreds of dollars less for it. Only because I early-bid did he have to go above and beyond sanity to win his item. As I keep telling you, the last bidder won.

If he bid like a pro (at the last second), its unlikely that I would have bid as much, and he would have won, again at a much lower price.

If he and I had both bid properly, I forget who would have won, but the important thing is that it would have sold at a much lower price and at a much more reasonable value.

Not to worry, I bought a better example of the same thing for less money a week later, bidding properly.

You can learn a lot looking at people's bidding histories. This same guy had a habit of early bidding, and paying way, way too much for things. I'm sure he gets invited to the eBay parties in San Jose, since it's guys like him that make eBay money.

There's no law against early-bidding, but it's just not right.

Never early-bid.

 

What if the Bids Get too High Before the End of the Auction?

Don't bid when the bidding exceeds the maximum bid you've determined for yourself during the research period.

Duh.

You just saved yourself the trouble of bidding, and kept your cover so no one else looking for the same item tomorrow knows you're interested, or what you'll bid.

Never, ever early-bid.

 

Next: How to Bid

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