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Reserve Auction Bidding

Many auctions have a “reserve” price. A reserve is a price below which the seller does not agree to sell. As a matter of practice and tradition reserve prices are not known to the bidders, but some sellers will reveal the price, or a range, if you ask. Reserves are usually used on items that have a strong intrinsic value but an unknown likely price on eBay, or where the seller may have paid too much in buying the item and wants to be sure to get his money back if and when it sells.

Buy It Now and eBay Stores

eBay has recently expanded its “non auction” elements to include a wide variety of fixed-price auction types, which generally are known as “Buy It Now” or BIN. A BIN is similar to how you shop in a store – things cost what they cost, and you buy it or you don’t! Increasingly eBay is distinguishing between true “auctions” and store-type listings, though BIN remains an optional feature in regular auctions as well.

Additional Auction Formats

Dutch Auctions

A “Dutch” auction is one in which multiples of the same item are available. You can bid on as many multiples as you wish, all at the same price, and all winners of the auction will pay the lowest of the winning bid prices.

This sounds mildly confusing, and it is, which is why new eBayers are actually not allowed to participate in them. On eBay, you must be a member for 60 days and have at least 50 feedback points in order to participate in them.

The way it works is that if a seller has items in high quantity say 25 in numbers ( similar to wholesale) he will take the top 25 bids and award it all of them at the lowest bidder price to all. If the starting bid was $290 for a digital camera (25 in number) and the lowest was $120 at position number 25 out of total 80 bidders than, all the top 25 bidders get a camera each at $120. Its simple but can get confusing initially. Dutch auctions work the best for people who have merchandise in bulk and are not aware of the price it will go at. Since selling them individually incurs high insertion fee, they are auctioned with one Dutch auction.

Reverse Dutch Auctions

Reverse Dutch auctions are unusual but be can very profitable for a skilled buyer. Basically rather than a price incrementally going up, it incrementally drops. When you’ve been trading on eBay a while, look into the format!

Restricted Auctions

Restricted auctions are for adult items, in general. Check the eBay regulations at any given time, as the auctions requiring age verification have been increasing, and certain adult materials are no longer allowed on eBay at all.

Private Auctions

Private auctions are used when a seller wishes to let (or indeed force) the bidders to remain anonymous. This format was developed earlier in eBay history when there was more unrestricted communication between members – someone would see twenty people bid on something and contact them directly to offer the same item for less than the auction price. Today such communication is not possible, and can get you suspended in any case, yet the private auction remains popular for either controversial or adult items where buyers might prefer privacy or certain very expensive items where buyers might prefer to be unknown.

Really serious auction players and collectors use strategies that make sure they win the majority of desired items. They buy items that they can then resell for a profit. The first step is to know what you are buying, but the next is to actually get the items you want by bidding well.

Mastering effective bidding strategies will help you maximize your profits in the reseller marketplace at eBay. A few basic strategies are discussed below.

Strategy #1: Bid non-round amounts

Buyers on eBay tend to bid in easy to think of amounts like $7.50 or $99.25.

Our strategy is to calculate your top/best price for an item. Then add a few cents to it. Bidding a few cents more often makes a difference. Try bidding $7.54 or $99.28 instead and see how it makes a whole lot of difference – regardless of the minimum bid increment you can win any auction by a penny.

Avoid using this strategy at the very beginning of an auction. Wait until near the end of the bidding. This way you will keep the edge over your competitors without exposing your bidding strategy. In your final bid increments add few cents more, or if you are planning on a proxy approach, bid the maximum with odd cents tossed in.

Strategy #2: Last minute “Sniping”

You will observe on eBay that there are several last minute winners – in fact, many. Waiting until the last moments of an auction, never having bid until then will keep the final price lower and increase your chances of winning. There are even software programs to help you do this. Many consider this as unfair practice but it in reality it is not since it falls within the stipulated regulations.

Strategy #3: Use two windows in the final moments

If you are watching the end of an auction, open a second browser window. On eBay you can use this two window strategy in the final moments where one window is for you to bid while the other is for watching the flurry of other bids. To keep up with the bids, keep hitting the reload or refresh button on the browser. If you use this method, be aware that it takes seconds to fill in your ID and password before submitting a revised bid so have that part of your screen filled in to save time, and just wait to fill in the new bid amount and click the submit button. Also you should have a broadband connection if you can, as dial-up will be too slow to take advantage of this.

Strategy #4: Do not bid too high too early

Hot items are eyed by others too. You know you have competition as a buyer, not just as a seller. Assess it early. Devise a master strategy for such products or items. If there are several people who are determined to acquire the item that you want, you will only be forcing the price higher every time. Whether you truly going to snipe or not, bidding later is usually better for smart buyers.

Strategy #5: Don’t get emotional

Auctions are similar to gambling for buyers and can be very emotional. We’ve seen some crazy prices for fairly common items! As a seller that’s great but as a buyer, stay calm. Keep in mind that if you lose, there will probably be many more items available at a later date.

There are several other advanced strategies that you can use and more you can devise on eBay auctions. However, the above basic strategies should be plenty to get you started…and bear in mind in many cases a bid can be withdrawn if made in error.

Now that you’ve started using eBay, know what you want to sell, have started researching and buying it and are comfortable with the whole process, it’s time to start making money!

Unlike most “markets” where research is hard to come by or expensive, eBay makes it incredibly easy to see how the market for your particular products is doing – you can watch other auctions live, and more importantly, you can see everything that happened on eBay for the last 90 days.

If you wanted to open a bakery on the main street of your town and wondered “How many muffins get bought in this town every weekday morning” you’d almost certainly not get a good answer to that.

If you want to sell, for example, dehumidifiers on eBay, you can easily do a search of completed auctions for items like yours and see all kinds of incredible information like how many sold, how quickly, and at what prices.

So that is the most important aspect of selling on eBay – doing a little legwork to understand your market.

Also keep in mind that if a relatively obscure item sells for a high price to one person, everyone who has one of those to sell will list it, trying to get the high price. Outrageously high prices for relatively obscure items are often because one collector of something decides in one moment they “need” it – which may or may not influence the general pricing trend.

Also, as a seller, your main concern is problematic, fake, or non-paying bidders.

Ebay allows you to control who can bid on your auctions both through automatic rule-making (you can require bidders to have a PayPal account, for example) or through simply stating your own policies – no bidders with less than a feedback rating of 10, for instance.

You’ll find your own strategy but my general advice is this:

· Check the range of pricing your item or items like it have sold for, and you’re your price/reserve in that range
· Start with low opening required bids, like 99 cents or $1
· Consider avoiding zero-feedback bidders
· Consider avoiding bidders with more than 1 or 2 negatives
· Consider avoiding bidders from foreign countries with a lot of financial fraud, such as Indonesia and parts of Africa (international shipping can be a hassle also, we’d recommend starting with US only auctions)
· Consider requiring a PayPal account for bidders even if you accept or prefer other forms of payment (it means they have a credit card and bank account, at minimum!)
· Use the standard auction lengths, typically one week – unless you have a reason to have a shorter or longer auction.
· You can set your auctions to automatically begin at a specific time (currently this will cost you 10 cents per auction) – the advantage is if you have many listings it may easier to have them all close at once each week.