Ebay Morality

Flotsam said:

If you bid that amount early on, then someone comes along and starts probing for where the bid is at. He gets up to $250 and decides that it is more than he wants to pay. At the end of the auction you pay $250 + the increment where, if you had sniped you would have payed $100 + the increment. You are out 150 bones purely because you didn't snipe.

Of course the seller would have gotten much closer to the value of his item which is what I meant by it's the seller that tends to get hosed by the sniping process.

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Understood. My point was that the "prober", who either can't make up his mind or is trying to weasel a cheap deal by bidding low, is the one who's hosing the seller, not the sniper who bids $300. If that bidder followed eBay's recommendations (i.e. determine your max and bid once), the seller would get full value.

IMO, the best environment would be one in which bidders were forced to determine their max and only allowed to bid once per auction. But that will never happen because it would prevent people from overspending, and that would be un-American.

gbroadbridge said:

It really doesn't make any difference whether you place your maximum bid at the start or close to the end of an auction - unless you're not being honest with yourself about how much you're really prepared to pay

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In the best of all possible worlds you'd be right. In our world, though, it doesn't always work that way. Suppose you place a maximum bid of $100 on an item that has with a starting price of $10. You're the first bidder, so eBay shows the current price as $10. Somebody else comes along and has some unclear notion of what she (I literally picked the gender at random) is willing to pay. She sees if she can win with a $50 bid. The price jumps up to $51. (Or maybe $50.50; I don't recall the precise boundaries of eBay's bid increments.) Ms. Wishy-Washy thinks, "oh, if I was willing to pay $50, I can afford a little more," and enters a new bid of $55. The price goes up to $56. This process goes on until the price reaches $76, at which time Ms. Wishy-Washy gives up.

On the other hand, if Ms. Wishy-Washy had thought about what she's really willing to pay for the item, she might have decided her maximum was $60. If you entered your $100 bid as a snipe and she entered her $60 value as either a snipe or a regular bid, and if there were no other bidders, you'd then pay $61 for it. If Ms. Wishy-Washy started out with a lowball bid of $10, then you'd get the item for $11.

Of course, there are lots of other possible scenarios. The one that makes sellers drool is having Ms. Wishy-Washy bidding against Mr. Cant-Make-Up-My-Mind. They end up in a bidding war, each one's new bid momentarily winning bid fueling the other's conviction that the item really is worth $50, then $75, then $100, then $150, before one of them gives up. The one who gives up may eventually be grateful that the auction went the other way.

In sum, the way you bid can influence other bidders. IMO, bidding late (particularly sniping) keeps emotional and otherwise irrational bidding behavior to a minimum.

moose10101 said:

Understood. My point was that the "prober", who either can't make up his mind or is trying to weasel a cheap deal by bidding low, is the one who's hosing the seller, not the sniper who bids $300.

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Probably small comfort to the seller who just sold a $300 item for $100 instead of $250.
This discussion is very interesting with many different angles on it.

I agree with the previous response, i.e., that a last-minute (or second, in the case of sniping) bidding may prevent an item from being bid up early in the auction by someone who's ambivalent about buying the item in the first place.

As an ethical question, though, in many auctions, the real bidding takes place in the last minute of the auction. What's the difference, other than the possible thrill factor, if I'm there poised over my computer in the last few seconds of the auction, or if I've told auctionsniper to submit my highest bid for me? For me, it's usually a case of me not having time (or forgetting) to be at the computer at the right time, rather than any Machiavellian thinking!

Graham

srs5694 said:

Of course, there are lots of other possible scenarios. The one that makes sellers drool is having Ms. Wishy-Washy bidding against Mr. Cant-Make-Up-My-Mind. They end up in a bidding war, each one's new bid momentarily winning bid fueling the other's conviction that the item really is worth $50, then $75, then $100, then $150, before one of them gives up. The one who gives up may eventually be grateful that the auction went the other way.

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My favourite bidders are Mr I'llkeepbiddingtilImeetthereserve and the twin bro's winatallcosts.

It is funny that the real problems on Ebay are the ambivilent buyers or the irrationally emotion driven buyers who make things difficult for us "sensible" buyers . It reminds me of the universal view that when you are driving in your car, everyone who drives either slower than you, or faster than you is always a jerk who doesn't know how to drive and shouldn't be on the road .

I'm sure that these types exist but I wonder how many people who would be genuinely interested in buying an item, _but only if it goes at well under its real value_ (and who among us haven't been there?) would be considered ambivilent? And in a situation where you really had an urgent use for an item that rarely turns up on Ebay wouldn't you be tempted to keep pushing the price up past what might be considered it's market value?
I'm just saying that it is interesting how many situations come into play.

Flotsam said:

Of course the seller would have gotten much closer to the value of his item which is what I meant by it's the seller that tends to get hosed by the sniping process.

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I know what you're saying Neal and it's true that as a seller, you would feel as if you've not gotten a fair price, but......speaking fairly, the seller always has a number of "tools" available that will protect his position, not least among them the "buy it now" option where he could put a BIN at $300.00 or a "reserve" which he could also place at or close to his assumed "fair" price. I think we have to assume that each buyer and seller is operating at an adults mental capacity and takes as much advantage of the field levelling tools as they can. Once again, I have to think that there is nothing unethical or immoral about sniping.

cheers

Excellent points, John

Flotsam said:

Probably small comfort to the seller who just sold a $300 item for $100 instead of $250.
This discussion is very interesting with many different angles on it.

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If it sold for $100 it's a $100 item. It's no more complicated then that. If you had bought the item from a store front then you wouldn't be feeling sorry for the store owner I bet.

If you are going to worry about the seller then are you going to worry about what price the seller bought the item for? If that item that sold for $100 was bought by the seller for $5?

Is it ethical for sellers to let bidding exceed the market value for an item?

As both a seller and buyer on eBay, the only way that an eBay seller can "get hosed" is by failing to set a reasonable reserve amount on the item(s) for sale. Use of the "Buy It Now" option is the functional equivalent of setting a reserve amount.

There is the always the potential problem of the non-paying bidder, but that has nothing to do with sniping.

eBay Proxy bidding makes the seller smile, so does sniping. Both practices tend to run the final selling price of the item up.

Case in point, I've been watching an auction for a Kiron 30-80mm lens for OM fit cameras. But it has gone past the £15 I was prepared to pay for it, so I won't be bidding.

Another point is I never bid on any auction where the cost of postage is not stated.

Nick Zentena said:

If it sold for $100 it's a $100 item.

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In the example I posed, One buyer put the value at $300 another at $250. That the seller got only $100 is purely a matter of the auction process. It is true that the seller has the ability to protect himself. He can set a reserve if he is not willing to sell below a certain price, or not, if he just wants to move the item quickly.

My opinion on this topic has definitely evolved by reading the posts in this thread. I half expected the majority of responses to be along the lines of "Snipers is worser than horse thieves". "Hangins' too good for them low down polecats". Instead, it seems that most people consider it to be technique that is equally available to everyone and therefore a a valid and fair option to use.

I now feel that terms like "morality" and "ethics", which I used at the beginning of the thread are not appropriate in a situation where there is no real agreement not to engage in the practice. In fact the rules of the auctions are set up to favor it's use.

My perspective as a seller:

I hate snipers because they don't expose their interest in advance and get the bidding rolling and run the price up above the market value or at least close to the value of en item.

My perspective as a buyer:

I snipe all the time, it is quite often the only way to win an item even for fair market value. I bid my maximum within a few seconds of the end of the auction when ever possible. I usually research an item to determine current value. Decide how much I am willing to pay/can I afford it?/how often is this available?/how soon do I need this? etc. For the most part "There will always be another one on ebay eventually" and maybe at a lower price or posted in the wrong category or with bad pictures or ending at a ridiculous hour.

I currently have satellite internet service and the latency of the connection can lead to some intersting delays. Usually there is only a lag of 4-6 seconds but sometimes it can stretch out to more than a minute. If a cloud goes by at the wrong time I lose my connection completely and then the satellite is down often and I have to resort to "dial-up" with a noisy phone line my connection gets dropped often.

I have placed bids early for a fair amount only to generate interest from other bidders who increment against me. I have noticed many bidders who when they finally get above my bid immediately place another higher bid. We all have multiple prices in mind when we want to buy something...

• the I stole it price
  the really good deal price
  the fair price
  and the highest price

In a regular auction you usually end up paying more than you wanted to.
I got into a bidding war last spring for an used lawn tractor, I was on dial up and losing my connection every couple of minutes and I really wanted that tractor since it was nearby and the only decent used one I had found anywhere in my area. So I bid several minutes before the end in case my connection terminated. Another guy outbid me, I rebid, he rebid, etc. at the end I was lucky to lose the auction. The seller was ecstatic, he had relisted the tractor from a cancelled previous sale at $350 and he got $625 instead.

Until ebay extends auctions with last minute bids like a real auction to allow for bidding wars to develop, I will snipe. And as a seller I will either put a reserve or starting bid at my minimum price so I don't get sniped for a dollar on a $100 item. I often put a buy it now price which many people use to avoid losing out on the item. I wish ebay would allow me to choose to have the buy it now option to remain available after a lower bid is made without having to place a reserve price or make known that there is a reserve price on the listing.

So, I'm watching these two auctions on ebay. The film is out of date by about 7 months and its the same for both auctions (same seller). Retail for the film, in date by about 18mos is about 180.00 at B&H. The auctions end at over 120.00 and all the action happens in the last minute (one was at 38.00 the other 56 prior to the last min or so). I'm just guessing, but I think the seller is pretty gosh darn happy.

As a reference newly out dated film at my local camera shops (Camera Mart or adray) is 1/2 off and they often will take any reasonable offer for quantity (as in 75% off).

You have all just had a lesson in supply side economics. Love it or hate it, its the way the world works. This is also true for things you purchase in the store at a "set" price you just dont realise it because every raw materal used to make all manufactured goods went through a similar bidd process. Ever seen the trading floor at a stock exchange? The "bid" price is passed on to the end user.

Hi there,

Interesting thread. Personally it all depends as to how much I want the item but I never 'snipe' closer than 10 min. til auction end in case someone REALLY needs the piece.

Something that I have seen and is not mentioned in the thread; a last second sniper with 0 feedback blowing the auction for everyone concerned. non-paying bidder, other bidders moved on, seller stuck. That is just plain wrong.

Other than that, I love beating the snipers by $2.85.

Happy Last day of Summer people.

There's lots to reply to; I'll make it one post....

Flotsam said:

I'm thinking of a situation where an item is sitting around at $100. You feel that a fair and affordable value for that item is $300. If you bid that amount early on, then someone comes along and starts probing for where the bid is at. He gets up to $250 and decides that it is more than he wants to pay. At the end of the auction you pay $250 + the increment where, if you had sniped you would have payed $100 + the increment. You are out 150 bones purely because you didn't snipe.

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This scenario assumes that the sniper's lack of interest prevents the other seller from placing a bid. This might be true if sellers are searching on items on which others have bid, but otherwise it doesn't track. The $250 bidder could as easily have placed that bid even without the sniper, although given the bidding pattern you indicate, I grant that it's likely this bidder is related to Ms. Wishy-Washy, who I mentioned in an earlier post, and would place an initial lowball bid, so it might end up going for $150 or thereabouts.

Besides which, this is about business. As a buyer, it's not my place to be overly concerned with the seller's profit margin. Now, if I saw some genuinely rare and valuable item about to go for a pittance because it wasn't described properly, broader ethical concerns might kick in and prompt me to alert the seller, but for the most part that's not an issue.

Flotsam said:

In the example I posed, One buyer put the value at $300 another at $250. That the seller got only $100 is purely a matter of the auction process.

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Actually, in the example you posed, one buyer put the value at $300 and another was mysteriously absent in the sniping condition; it's not really a fair comparison. At its most fair, the second buyer was ignorant of the way the market works and placed a lowball bid. Educate that buyer to place bids reflecting the item's true value (to the buyer) rather than place manual incremental bids.

Flotsam said:

I wonder how many people who would be genuinely interested in buying an item, _but only if it goes at well under its real value_ (and who among us haven't been there?) would be considered ambivilent?

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That's not ambivalence; that's being cheap.

Flotsam said:

And in a situation where you really had an urgent use for an item that rarely turns up on Ebay wouldn't you be tempted to keep pushing the price up past what might be considered it's market value?

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This doesn't change anything. If you really desperately want something, you should decide how much money that desperation would drive you to pay and place that bid! Do it via eBay's proxy bidding system or via a snipe; I don't care. If you're outbid on something and you'd have been willing to pay more than you bid, then you should have placed a higher bid. Period.

(Remember the increment system, though. If you're the second-highest bidder, you set the price, and the winner will necessarily win by a small increment, sniping or no sniping. The high bidder may have placed a substantially higher maximum bid than the winning value. Don't think "if only I'd bid $2 more, I could have won it!" Chances are you wouldn't have, and the winner would only have paid $2 more.)

Tom Hoskinson said:

Use of the "Buy It Now" option is the functional equivalent of setting a reserve amount.

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Actually, "Buy It Now" isn't a reserve equivalent, at least not in a standard auction. Place a starting price of $10 and a BIN price of $100 on an auction and the item could sell for as little as $10. Now, if you set it up as a marketplace item that has only a BIN price, that's another matter, but sniping doesn't exist in such cases. Reserve prices and starting prices that reflect the seller's minimum selling prices are sellers' guarantees, not BIN.

dsisaacs said:

Until ebay extends auctions with last minute bids like a real auction to allow for bidding wars to develop, I will snipe.

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There are many kinds of "real" auctions. As described in the sniping myths page I mentioned in an earlier post, eBay's auctions come close to a silent auction or a "television" auction (the sort that PBS stations sometimes run for fundraising purposes). These auctions don't allow extensions, and they at least theoretically allow a sort of sniping. It's just that eBay makes sniping more reliable. If everybody were to snipe, the auction would be close to a sealed bid auction (except that the second-highest bidder sets the price).

phfitz said:

Something that I have seen and is not mentioned in the thread; a last second sniper with 0 feedback blowing the auction for everyone concerned. non-paying bidder, other bidders moved on, seller stuck. That is just plain wrong.

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Yes, that's wrong, but you can get deadbeat winners who aren't snipers, too. (As a seller, I'd guess that most of my deadbeat winners have been novices who did not snipe -- but I don't sell a lot on eBay, so my sample's pretty small.) Also, the seller does have the option of using eBay's "second chance offer" feature (I think that's the term, but I'm not positive). The seller offers the item to the second-highest bidder for that bidder's high bid as a limited-time BIN-only item. Of course, by the time the seller's realized that the auction's winner isn't going to pay, the second-highest bidder might no longer be interested (ditto for the third-highest and on down the chain), so this is an imperfect solution, but it does work sometimes. In fact, given the rules, this is actually advantageous for the seller, because the second-highest bidder, if s/he accepts the offer, will end up paying his/her high bid, rather than the next-highest bidder's high bid plus the increment, which means a higher price than if the deadbeat winner hadn't bid at all.

I don't consider sniping any more unethical than haggling.

Sometimes I don't snipe. For items that appear frequently and usually don't get many bids, e.g. FSU rangefinders or DVDs, I bid low on an unbidded item and wait. That's because I personally avoid those items when bids are already on them and I figure others are playing that game too. In other words, I lowball an item until I win one. That, IMHO, is a little more unethical than sniping, because I'm sort of trying to devalue the item.

And sometimes I'll do both: place a lowball bid early to deter people (like me) who are looking for an overlooked steal; then snipe my max and read about it in my email the next day, win or lose.

As others have said, snipers mainly hurt nibblers (bidders who incrementally bid up as if it's a live auction or because they want to be the highest bidder) and lowballers (bidders, including sometimes me, whose max bid is less than we think the item is worth). Both of those are "incorrect" uses of Ebay, and Ebay tries to educate user to that notion.

As a seller, I've been disappointed at an item's low final bid, but I preferred those to the times I saw a nibbling war leave the winner paying clearly too much.

Sometines I've found that sellers are quite happy to sell an item for what I smugly thought was a candy-from-a-baby steal of the century. It turned out that they couldn't advertise stuff in-store for less than the MSRP without being "starved" by their distributors, but they made a satisfactory margin on Ebay.

Finally, I do think Ebay is sometimes a game: with the explosion of estate brokers onto the 'bay, you get the chance to collectively speculate, deconstruct listing language, and conduct exhaustive searches into how a camera operates and might seem broken if not operated properly.

Tom Hoskinson said:

As both a seller and buyer on eBay, the only way that an eBay seller can "get hosed" is by failing to set a reasonable reserve amount on the item(s) for sale. Use of the "Buy It Now" option is the functional equivalent of setting a reserve amount.

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I'm also both a buyer & seller on eBay. I really hate the whole 'reserve' thing, and so rarely (I've tried it a few times) use a reserve. What I do is simply set my opening bid at my 'reserve'. In a real live auction (and being a former auctioneer) I can understand having a reserve, as there is no set opening bid (if the auctioneer starts the bidding at $100 and gets no bites, s/he can go down, something you can't do on eBay).

The BIN feature has nothing to do with reserves, and I don't see how it can be considered functionally equivalent to having a reserve?

-Mike

derevaun said:

And sometimes I'll do both: place a lowball bid early to deter people (like me) who are looking for an overlooked steal; then snipe my max and read about it in my email the next day, win or lose.

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I do that when there's an item I want with a low opening price, but with a BIN (Buy It Now) price higher than I'm willing to pay. I use a program called AuctionTamer (www.auctiontamer.com - only available for the PC, I wish it was available for the Mac!) which is really nice at tracking both auctions I'm selling, and ones I'm looking at buying. It has a built-in sniping engine in it, and as I have a cablemodem which is a 24/7 connection, it makes sniping easy, with no 3rd party involved.

derevaun said:

As a seller, I've been disappointed at an item's low final bid, but I preferred those to the times I saw a nibbling war leave the winner paying clearly too much.

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As I said before, If an item I'm selling sells, I'm happy. I never list an item at such a low price that I'd be unhappy if it sold at that price. It rarely bothers me when I sell something for clearly too much! There are exceptions to that (as there are with almost all rules), one time I was selling 6 rolls of expired (by like 50 years) 130 sized film, done as a dutch auction. I had bids on a couple of them for like $1 or $2 or such, and at the last moment, a guy comes along, and bids $60.00 each for all 6 of them! While I would have been within my rights as a seller to demand he pay the 6x$60 it was fairly clear that he really only wanted to pay $10.00/roll, and considering that the owner of the film would have been happy with a dollar a roll, he was happy, the buyer was happy, and learned something (I hope), and even I was happy (with my small commission).

On one item I sold fairly recently, a Linhof anatomical grip, the high bidder was a snipe, and AFTER he won it, he stated "I assume it has a cable release with it", and when I told him no, he got all upset, and in 2 days we sent more than a dozen emails back and forth debating my use of the word 'complete', so I finally said screw it, and sent a second chance offer to the second highest bidder, who happily bought it (so I lost all of $2.00 by going with the second highest bidder). That transaction (the original one, not the second chance offer) got me one of my few negative feedbacks, and added some more text to my disclaimer text! I used to think it was cold when sellers would have a paragraph of disclaimers, etc., but I've learned that some people just don't understand how the real world works!

I've also gotten tired of international bidders buying items, and then asking for a shipping quote, even though in the listing it says to ask ALL questions, and ask for shipping quotes BEFORE bidding! How can somebody buy something and have no idea of what the shipping will be? That got me another negative feedback, sold something to a guy in Germany, quoted him $30.00 shipping, to which he complained about (it ended up that I messed up in the quote, and it cost me $35.00 to ship it!). After he grudgingly paid I sent off his item (I don't even remember what it was), and within a week he posted negative feedback saying shipping was too expensive, and took too long!

One time I saw a seller that had a whole rant about feedback, and about how sellers with 100% positive feedback can be fouling the feedback system by not posting negative feedback for deadbeat buyers (all sellers who sell any volume WILL get deadbeat buyers) for fear of getting negative feedback in retaliation, and I whole heartedly agree!

One thing I do like about selling camera equipment on eBay rather than computers (what I used to sell on eBay) is that most of the items I sell are older, and won't loose value if I sell them now, or next year! I have a whole storage unit full of Sun computers, that I used to sell for $500.00 for a complete system back in 1999, $250.00 in 2002, and now can't GIVE away!


Sorry for the long winded reply, (but then lots of my replies are long winded) I just had to get that out while we're on the topic of eBay.

Sniping is a necessary tactic to secure your bid against irrational buyers. If eBay auctions were purely rational, everyone would just put in their proxy bid for the truely highest amount they'd pay anytime before the end. Sniping, in this case would make zero difference, since if the sniper outbid everyone else it would have been no different if they were the first bidder on the item.

One advantage of sniping is that the irrational buyer sees "oh, someone is beating my max bid by only 50 cents! Well, I can't let the item go for just 50 cents more." And so they get caught up inching their bid up to well beyond what they thought they were willing to pay. If you snipe, you don't give them a chance to engage in this silliness.

A second advantage of sniping is, as mentioned before, it doesn't attract more bidders to your item.

A third advantage is that is keeps you from being an irrational buyer.

I only really have two gripes about eBay. 1) is the shill. I've been in a few auctions were later I've found out that the guy bidding against me is actually a friend of the buyer.

2) is that sellers don't usually give feedback until you give them feedback. This isn't correct since the buyer's half of the transaction ends before the seller's. That is, once you pay your seller they should post your feedback. Instead, what happens is, sellers wait to see if a buyer posts possitive feedback about them and then responds in kind. And even though a buyer pays immediately and holds up his end of the bargain, if he gives negative feedback to the seller, the seller often retailiates.

Too bad eBay doesn't have an RSS feed based on item search criteria.

-j

jvarsoke said:

2) is that sellers don't usually give feedback until you give them feedback. This isn't correct since the buyer's half of the transaction ends before the seller's. That is, once you pay your seller they should post your feedback. Instead, what happens is, sellers wait to see if a buyer posts possitive feedback about them and then responds in kind. And even though a buyer pays immediately and holds up his end of the bargain, if he gives negative feedback to the seller, the seller often retailiates.

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This is my beef as well. As anyone here can attest I always (well at least mostly) give feedback once I've been paid or as soon as I get the item and see that it is aok.

In auctions that I have run for others I didn't have this luxury.

Meanwhile, feedback has become all but useless as an indicator of quality.

jvarsoke said:

A third advantage is that is keeps you from being an irrational buyer.

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That is true. It forces you to carefully consider your true bid limit. It leaves you no time to up your own bid if you are outbid.

raucousimages said:

You have all just had a lesson in supply side economics. <snip>

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Oh, come on. Supply side economics was a fad when R. Reagan was president. It was used to rationalize Reagan's tax cuts.

As an empirical matter of fact it was purest nonsense. I built models that incorporated the relevant tax rates, fitted them to historical data, simulated them with and without the proposed tax cuts. The differences between sims with and without are pretty trivial, as in within measurement error. And I used post-tax cut data to estimate what difference the tax cuts made. Same result.