Game Theory, Nobel Prize & Auctions Auction Prim

Game Theory, Nobel Prize & Auctions Auction Primer Series – Part 1

by: Steven Woodward

The Auction Primer Series is a group of articles to help further educate sellers about auctions; their history, strategies for use, and provide a comparison of various auction sites and types. In Part 1, we look at the more common type of auctions in use today.

William Vickrey, highly regarded as the founder of auction theory, was an economics professor at Columbia University when he published two papers outlining his views on auctions:

กCounterspeculation, Auctions, and Competitive Sealed Tendersก, 1961, Journal of Finance

กAuction and Bidding Gamesก, 1962, Recent Advances in Game Theory

In 1996 he received a Nobel Prize ขfor fundamental contributions to the economic theory of incentives under asymmetric information.ข It’s important to understand that asymmetric information is an essential component of auctions, where potential buyers have varying levels of knowledge about the value of the item.

Although Vickrey considered his work on auctions as กone of my digressions into abstract economics, at best of minor significance in terms of human welfareข, to those of us who work with online auctions, much of what he outlined is useful to understanding our marketplace.

Vickrey identified 4 general types of auctions:

English

Dutch

Firstprice sealed bid

Secondprice sealed bid

English Auctions

The most common type of auction is the English Auction, although it may also be known as an ascending price auction. In ascending price auctions each subsequent bid is higher than the previous one. This is the most popular type of auction for single items.

Although traditional ascending price auctions use a ขsoft closeข format where bidding continues until a final bid is placed, the majority of today’s online auction sites use the ขhard closeข format also known as a ‘time intervalข auction having a set time limit, regardless of ongoing bidding. It’s important to note that in a ขsoft closeข format, bid snipping, that is bidding during the last few seconds or minutes on an item, is eliminated since the auction stays open as long as bids are being made.

In an attempt to minimize bid snipping and provide more of a ขsoft closeข characteristic to their ขhard closeข auctions, eBay allows bidders to use ขproxy biddingข. In proxy bidding, a bidder enters the highest price they are willing to pay for an item when they first bid. The bid begins at the lowest possible level and increases automatically only if their original lowest bid has been beaten. For more indepth information on the ขproxy bidding capability on eBay go here. http://pages.ebay.com/help/buy/proxybidding.html

Amazon.com currently offers a feature for their auctions called ขGoing, Going, Gone.ข The Going, Going, Goneข feature extends the end of an auction for 10 minutes if a bid is placed effectively creating a ขsoft closeข. For more information on the ขGoing, Going, Goneข feature on Amazon go here. http://www.amazon.com/exec/obidos/tg/browse//1161360/10316661898415007#goinggone

From the buyers standpoint a ขhard closeข format is preferable since they may be able to make a final bid before others can react, possibly winning the auction at a lower price.

For sellers, a ขsoft closeข format provides an opportunity to realize the maximum price for an item by removing the time restrictions for an auction. As long as bidders are bidding the auction remains open.

Dutch Auctions

As you may have guessed, the concept of the Dutch auction originates in the Netherlands. Unlike English auctions which utilize ascending price methods, Dutch auctions are descending price auctions and are commonly used when multiples of the same items are to be auctioned. In a Dutch auction the bidding starts at a relatively high price which is driven progressively downward by bids.

As an example of a Dutch auction let’s say you had 10 items you wanted to sell for $20 each.

Bidder A bids $18 for 6 items

Bidder B bids $17 for 5 items

The final result is:

Bidder A would receive 6 items for $17 each

Bidder B would receive 4 items for $17 each

Please note that most Dutch auctions allow bidders to refuse an order for a lesser number of items than what they bid on. A ขsoftข or ขhard closeข format may be used in Dutch auctions although the most common is the ขhard closeข.

Firstprice Sealed Bid Auctions

Sealed bid auctions differ from the English and Dutch in as much as the bids are not announced to other bidders. The individual bid is only know to the bidder and the seller. This type of auction may be either buyerbid, where the highest bidder wins the item and pays the amount of their bid, or sellerbid, where the lowest bidder sells the item and is paid the amount of the bid. This form of auction is common for construction contracting, military procurement, foreign exchanges, and other types of goods.

Secondprice Sealed Bid Auctions

Another common name for secondprice sealed bid auctions is Vickrey auctions (named after William Vickrey) There is a slight variation to the firstprice auction for Vickery auctions. In a buyerbid auction the highest bidder buys the item and pays the amount of the second highest bid. Or in a sellerbid auction, the lowest bidder sells the item and is paid the amount of the second lowest bid.

The above descriptions provide a general overview of the most popular auction types in use today. Depending on the auction website these general categories may include a number of variations and options such as reserve pricing, open or closed venue, multiple items, fixed price and lot listings to mention a few. Before entering any particular type of auctions make sure you study and understand the rules for that specific type of auction, as the rules may vary from website to website.

About The Author

Copyright © Steven Woodward – All Rights Reserved

Steven Woodward is the owner, editor and publisher of the Auction Sellers Network (ASN); a web site for individuals and companies who are serious about utilizing the online auction marketplace for their business. In addition to topical articles, ASN provides an extensive resource center, news feeds and member forums. For more information, or to become a member, please visit us at http://www.AuctionSellersNetwork.com.

No permission is needed to reproduce an unedited copy of this article as long the About the Author tag is left in tact and included. We do request that we be informed of where it is posted and reciprocal links will be considered.

[email protected]

This article was posted on August 26

by Steven Woodward

Finding The Cheap Clicks

Finding The Cheap Clicks

by: Henry EldridgeDoyle

As anyone who uses Pay Per Click (PPC) advertising in their marketing campaign knows, getting your ad copy on the front page of a search results listing is becoming more expensive by the day. It’s a new phenomenon known as ‘keyword fatigue’, and itกs down to the overwhelming success of programs like Googleกs AdWords. As more and more advertisers realise the benefits of this form of traffic generation, so the number of people bidding for the same keywords increases, and the bid prices climb accordingly. Great news if you are a publisher taking a cut of the revenue, but not so welcome for those doing the bidding.

So are the days of 5 cents a click now just a distant memory? Not at all, there are hundreds of thousands if not millions of keyword phrases out there for minimum cost, all it takes is a little more effort to use them. To understand how this can be done, with Google AdWords in particular, it is first necessary to understand how ad positions are determined.

Googleกs PPC program, like their core search engine, places a great deal of emphasis on advertisment relevance. When a web surfer types keywords into the search box, Google wants the ad that most closely matches that phrase to be shown nearest the top of the list not just the ad bidding the highest amount of money. It mutiplies bid price by keyword relevance, and that means that by careful selection of your keywords, it is possible to be placed above competitors and pay only 1 cent more than they are (Google doesn’t necessarily charge the maxium amount you bid, only enough to put you ahead).

There are three simple ways you can trump your competitors with your keyword selection:

1. Longer phrases. There are huge numbers of people bidding on a loose term like กmortgage brokerก, but fewer people bidding on a tighter phrase like กmortgage broker in texasก. If a searcher types กmortgage broker in texasก into Google, and you have that phrase in your keyword list, your ad will be deemed more relevant than anyone just using กmortgage brokerก in their own list which means a cheaper click for you! Of course, there are fewer searches for mortgage brokers specifically in Texas than for mortgage brokers in general, so itกs necessary to build a large list of similar keyphrases targetting many locations.

2. Closer matching. Just because you might type กin car satellite radioก into Google, doesn’t mean every surfer will do the same. Somebody else searching for the same thing may well enter กsatellite radio in carก, or กradio in car satelliteก, and so on. If your ad contains every variation, it may trump a competing ad which lists only the first example. In other words, having just the keywords in your list isn’t necessarily enough having them in the same order a searcher enters them will give your ad a better relevance score.

3. The final (Google specific) method is to ensure that you wrap every keyword or keyphrase in both quotes and brackets. Again, this means that if someone enters an exact term you have listed, your ad will beat a competing ad that has the same term but without the brackets or quotes.

Clearly, building keyword lists in this way can be more time consuming than simply selecting a few generic words that describe your product or service, but free tools such as those at http://www.keywordlinker.com can make the process much quicker than doing it manually.

Cheap keyphrases are still there for the taking, the winners in PPC now will be those who put in the effort to catch them.

About The Author

Henry EldridgeDoyle is an internet marketeer, and site developer at http://www.keywordtoolkit.com.

This article was posted on September 29, 2004

by Henry EldridgeDoyle

Online Auctions: 10 Secrets You Should Know Before

Online Auctions: 10 Secrets You Should Know Before Bidding At An Online Auction

by: Ikey Benney, CEO

You may have heard about ebay and other online auctions.

You may have participated in some of the biddings.

But before you do the next bidding for a product or service, here are some few important online auctions secrets to help you:

1. Know the value of the product before you bid. If the product is brand new, check to see what price retailers are charging for it. If the product is used or reconditioned, you will want to pay way less than the retail value.

2. If the productกs description or picture isn’t detailed enough for you, contact the merchant to get more information before you bid. You don’t want to take a chance to waste your hard earned money.

3. Know the highest price you will bid for the product and stick with it. Don’t get caught up in a bidding war; you may end up paying more than the productกs worth. Don’t forget to add in the shipping price with your bid.

4. Visit a few online auctions before bidding because some merchants auction the same product in many auctions. You usually can purchase the product for a lower price in a unpopular auction because there are less bidders.

5. Know the time the auction begins and ends. You also want to know how long it will take to ship. If you need the product by a certain date, youกll want to estimate the time it will take to receive it.

6. Know the payment options the merchant accepts before you bid on their product. If they only accept checks or money orders, it may take even longer to get the product because the payment has to clear. If they accept credit cards make sure they have a secure server.

7. Know if the merchant offers a warranty or money back guarantee or before bidding on a product. You don’t want to get stuck with a product that does not work or you’re not satisfied with.

8. Online auctions will, sometimes, allow you to check the merchants history with their auction. Check to see if people have complained about the their products or business practices before you decide to bid.

9. Itกs important to place a bid early in the auction to show other bidders you are interested in the product. If someone does out bid you, don’t be afraid to out bid them. Remember not to go over your maximum bid price.

10. Another reason to know when the auction ends; you can place a last minute bid. The other bidders may not be keeping track of when the auction ends or may not have the time to bid again.

May these online auctions secrets help you to make a lot of money.

Warmly,

Ikey Benney, CEO

About The Author

Ikey, a Millionaire CEO from New York City is the creator of กMscsrrr: Millionaire Secret Cash Systemก, (internet income opportunity) which has helped thousands of ordinary people from all over the world to attain financial security and shining success during the past 2 yrs.

Mscsrrr Millionaire Secret Cash System helps you to generate $1,500+/Week for life, from home or office, part time or full time. No large investment or hassles. Win $1000$2000 free ขcashข…

mscsrrr.com

[email protected]

This article was posted on March 21

by Ikey Benney, CEO

Paid Search Advertising that Delivers Maximum ROI

Paid Search Advertising that Delivers Maximum ROI

by: Ivana Giardi

Paid Search Advertising (also PayPerClick, PPC) has gained a significant influence in the search engine industry over past couple of years. Whilst a traditional search engine optimisation still remains the online marketing strategy number one, more and more emarketers discovering the potential of online advertising campaigns. Properly designed and managed, PPC campaign can deliver highly qualified visitors to your online shop.

1. Quick Overview

PayPerClick (PPC) Search Engines are built on the similar principle as auctions. The difference is that you bid on keywords terms people use when they search for stuff on the internet.

The concept of PPC bidding is rather simple: you buy (= bid on) keywords that relate to your product. The highest bidder gets placed at the top of the search results, the second highest bidder gets the next listing and so on. Every time someone clicks through to your website, you pay the amount you bid on that particular search term.

Advertising with PPC search engines basically gives you three key advantages:

• Cheap and Highly Targeted Traffic

With bidding on keywords that relates to your product or service, you actually prequalify the type of visitors you wish to attract. You determine how much you are willing to pay (bid) for the click and you only pay when someone clicks on your ad. This implies that PPC search engines can cheaply direct qualified visitors to your website.

• Fast Exposure, Immediate Profits

Traditional search engines usually take few weeks (sometimes even months) to list your website. If you are having problems to get your website indexed by search engines or if you would like to get a quick results from the search engines then PPC is the best alternative. Most of PPC search engines will set your website live within a couple of hours (maximum few days) and the impact on your site traffic and sales is practically immediate.

• Guaranteed Top Position

Search engine optimisation is the classic method of getting your website on the top of search results for free. Simply said, the process of optimisation involves choosing keywords that are directly related to your website and placing them meaningfully within your pages. However, as easy as this sounds, for an average webmaster this is usually a quite daunting task without any guarantee on the success. This again brings me to PPC as the best solution to gain high rankings on the search result list. Often, by spending just few cents per click, your website can get to the top three positions within 24 hours!

The bestknown and most popular PPC Search Engines are Google AdWords (www.google.com/ads) and Overture (www.overture.com). Advertising with those two industry leaders will get your website lots of exposure and traffic. Furthermore, top 3 listings in Google AdWords and Overture appear on an extensive network of sites (including Yahoo!, MSN, AltaVista, Excite, and many others) so you can reach up to 80% of all active Internet users. However, at the same time be prepared that their top listings tend to be rather expensive and you need to pay quite a bit.

Generally, the more popular keyword you choose for bidding the higher is the price. You can start your bid from 1 cent per click and finish paying $5.00 (or more) for very competitive keywords.

2. Designing Successful PPC Campaigns

The golden rule of PPC bidding is: ขAttract highly qualified buyers and keep your bids as low as possibleข. Since you are paying for each single visitor landing on your website obviously you wish to maximize the effectiveness of your PPC campaign. Let’s take a look at some basic guidelines to help you optimise your campaign and ensure your ROI:

• Determine your bid cost

The calculation of the bid cost (also cost per click) requires a rather complicated formula. For the purpose of this article I mention just a baseline that helps determine how much you can afford to bid:

Firstly, you need to know the conversion rate of your web site. That means how many unique visitors you need to close one sale. For example, if you need 50 visitors (= clicks) to close 1 sale then your conversion rate is 2%. If your bid is 10 cents per click than one sale has $5 of bidding cost.

Secondly, you need to know your profit margin. If your profit margin is high enough to justify the cost you can consider increasing the bid and getting a higher position for your ad. This way you may increase the number of clicks through your website and acquire more sales.

Finally, calculate if the extra sales justify the extra cost and adjust the bid accordingly.

• Focus on highly targeted keywords

As mentioned earlier, PPC Advertising can deliver cheap and highly targeted traffic to your website. To use this advantage to your benefit it is important to choose wisely the keywords you wish to bid on. The key is to be specific. For example, instead of bidding on ขskin careข you can consider bid on ขanti ageing herbal treatmentsข. More targeted keywords attract more qualified buyers. It is easier to convert them into paying customers because they found exactly what they were looking for. This strategy is also a big money saver more specific keywords tend to be less expensive than the general ones everybody is biding on.

• Customize your advertisements

You will attract more attention from qualified buyers by writing ads specifically for each of keywords you bid on. Speak directly to the type of visitor you want to serve. For example, instead of writing an ad for ขpiesข you can write ขhome made meat piesข.

When tailoring your ads to a specific audience, be also sure that you direct your visitors to a page on your website where itกs easy for them to buy these items.

• Use less popular PPC search engines

Overture and Google AdWords are clearly the PPC market leaders. However you can still benefit from the less popular ones such as:

FindWhat http://www.findwhat.com

Espotting http://www.espotting.com, (biggest PPC engine in UK and European market)

7search.com http://www.7search.com

Kanoodle.com http://www.kanoodle.com

Enhance Interactive http://www.enhance.com

Sprinks http://www.sprinks.com

Bids on these less popular PPC search engines are much cheaper and you can purchase your listings for as little as one cent per visitor. Even though you may not get the same exposure as you would get with Overture and Google, you still generate a decent amount of traffic. And while you only pay for actual clicks to your website, you never waste your money.

• Choose the best position for your advertisement

To be listed first on the search results is not always a smart move. It certainly helps to attract lots of visitors, but may cost you lots of money at the same time. People usually visit first 5 top listings before making a final decision about their purchase. Therefore, it is more profitable to have lower ranking for highly competitive keywords.

3. Managing PPC Advertising Campaign

You have designed a killer selling ad copy, chosen highly targeted keywords, calculated the maximum you can afford to bid on each of search terms and determined which spot on the search results you wish to secure. Yet, there is no guarantee that your ad always remains on your desired position.

The key to managing the desired position is to adjust your bids correctly in accordance to the PPC market conditions. It’s like monitoring shares on the share market to get the best deal you need to constantly watch prices and react immediately to any change.

The main factor influencing the price of the bids and your position are your competitors. Let’s make few examples of bidding strategies you can consider using in your PPC campaign: assuming, your maximum cost per click is $1.00 and your goal is to secure position #3 at the most effective cost.

(a) Maintain Target Position

Your aim is to target the position #3 however your ad appears on the position #10. Knowing that the current holder of the position #3 pays $0.51 per click you can improve your position and take over his place by bidding $0.52. This strategy sometimes tends to drive up the keyword prices so be aware you don’t cross the limit of spending $1.00 per click.

(b) Remove Bid Gaps

Overture defines the bid gap as ขthe difference between the amount you are currently paying for a click and the minimum you could be paying to still remain above your next highest competitor in the search results.ข

For example: You pay $0.70 per click and your next highest competitor pays $0.60 per click. You can pay just $0.61 per click and still be placed above your competitor. By closing this bid gap you save $0.09 per click which in 1,000 clicks is saving of $90!

(c) Control your Maximum Cost per Click

As mentioned earlier in this article, the calculation of your maximum bid cost (cost per click) requires you to collect a list of statistics about your website. Based on our assumption, you are willing to pay maximum of $1.00 per click. Therefore you should not pursue any positions where the bids are over your $1.00 limit. Wait till the price falls under $1.00 to prevent any possible losses.

To get the most accurate bidding results without having to babysit your advertising campaign, I would recommend relying on one of the automated bid management software available on the market today. In general, those tools constantly check your bids and adjust them accordingly to maintain your desired position so that you don’t have to be alert 24/7.

The more sophisticated tools allow you to set your daily budget to prevent spending more than it is efficient for your business. Below I have listed the main features you should be looking for when choosing the bid management software for your campaign:

The ability to create and identify targeted keywords and phrases that convert leads in sales.

The ability to set the maximum amount your want to bid.

The ability to fix bid gaps so you don’t pay more money than is necessary

The ability to set your desired position.

the ability to compile comprehensive reports on your keywords, bidding cost, bid position and current bid for each keywords.

The ability to monitor competitor’s activity by checking competitors ranking and current bids.

If you would like to download a demo version of bid management software, there is one available for free at website http://www.keywordbidmaximizer.com/bidmaximizer. It will help you to better understand the whole process of designing and maintaining PPC campaigns so you always manage to costeffectively allocate your budgets and increase your revenue.

Paid Search Advertising presents an excellent opportunity to immediately address your offers to the proper online audience. Focus on identifying highly targeted keywords that convert for your website. Calculate your bids so your sales justify the cost. This way you will maximize your return on investment and ensure your website’s success with PPC advertising.

About The Author

Ivana Giardi is Marketing Director at Apex Pacific, developer of smart internet marketing solutions to help companies increase sales and profitability online. If you would like to learn more about Paid Search Advertising, visit Apex Pacific at www.apexpacific.com or email Ivana at [email protected].

This article was posted on October 17, 2004

by Ivana Giardi

SIX Golden rules of Pay per click marketing campai

SIX Golden rules of Pay per click marketing campaign.

by: Radhika Venkata

What are pay per click engines?

Pay per click engines as the name suggests, webmasters have to pay a fee for each click coming from search engine results. Depending on how much the person bids for a keyword over his competitor his website will be positioned in the search engine results.

How pay per click search engines work?

For example if a webmaster bids $0.07 on the term ‘tennis shoesก. If no other webmaster bids more than this, he will stay in 1st position. If second webmaster bids $0.08, then second one goes to 1st position. Basically this is like auction procedure for No.1 position.

So what are SIX Golden tips to work with Pay per click search engines?

RULE No. 1: Keywords:

Select your keywords carefully so that every keyword reflects your product. General keywords bring general public.

For example if you are offering search engine optimization service to webmasters, กsearch engineก will be a general keyword for you. กsearch engine optimizationก , กgood search engine rankingก etc,. will be your good target keywords.

Another thing you have to remember is targeting your keywords. Like any geographical locaton specific to your product or any specific language…Some search engines like Google offer this feature to target the keywords based on the countries and language.

RULE No. 2: Write a compelling ad:

Most of the times the pay per click search engine services limits your ad characters and length. So try to keep the keyword in the ad headline and the body.

By doing so, you will get higher click thrus for tha ads. This will be very useful with Google, which determines your position not only by your bidding amount but also click thru ratio. Google editors won’t allow you to use keyword more than once in your ad. It is to make use of your ad space more efficiently.

See the example below

กEbay ebook: Every thing about How to make money on ebay! An Easy to follow Guide!!ก

กEbay ebook that Stands in numder ONE position in Clickbank Market place as a Top Seller. See the Proof!ก

Certainly anybody can say that the second one pulls traffic than the first ad.

Try different ones and see what pulls more traffic for you. Check your spelling and grammer twice before submitting your ads.

RULE No. 3: Don’t enter in to Bidding war:

Keep an eye on your Return on Investment. (ROI) It is not that easy to resist the temptation of being number one on pay per click engine listings especially for the beginners. Always decide an amount how much you are going to spend on advertising campaigns. Depending on that devide certain percentage to PPCs.

With reasonable bidding amount you can get good amount of traffic from PPCs.

RULE No. 4: Monitor your bidding amount:

Most of the people bid once and don’t remember about it for weeks. Monitor your bid amount after logging in to your accounts. Do this atleast once in every 47 days.

For example, If you go to overture.com and search for some of the the keywords, you can find the first positions paying $0.87, $0.85, 0.35 for the first three rankings. Don’t you see who will be benefited by this? You can get the first and second position for $0.37 and $0.36 respectively.

So always keep an eye on your bidding amount.

RULE No. 5: Landing page:

After clicking on your link and coming to your website, don’t let them search for the product for which they came to your site. Directly landing on the product page is always a good idea and saves lot of your visitorกs time.

RULE No.6: Track your results:

Put some source code at the end of URL. Or submit different landing page for your product. So people coming to that URL can be tracked through a good weblogger. More on tracking your ad campaigns is at: http://www.webmasterscentral.com/wprofits/tracking.shtml

About The Author

Radhika Venkata

Subscribe to กEbookBiz Magazineก which is completely focused on ebook business and Internet Marketing. Receive FREE Ebooks with Resale rights every month!

http://www.ebooksworld.com/freetosell.shtml

Webmaster Resources: List Your product, ezine or web site free!

http://www.webmasterscentral.com/

This article was posted on October 23, 2003

by Radhika Venkata

Overcoming the most Frustrating Situation on eBay

Overcoming the most Frustrating Situation on eBay

by: Carolyn Schweitzer

Itกs happened to the best of us.

Youกve been watching the auction all week, and finally you’re about to claim your prizea rare bronze statue from the Shang Dy dynasty. Or something just as tantalizing. You log on a few minutes before the auction closes, and confirm that you’re still the top bidder no one has challenged you in several days. You’re already picturing กyourก statue prominently displayed on the living room mantelpiece, your friends green with envy as you tell them about the great deal you got on eBay. You refresh the page a few times, to make sure you’re still #1. You even up your bid a little just to make sure no body tries to outbid you at the last minute.

50 seconds to go…30…10…the auction has ended and the statue is yours!! You refresh the page for the last time so you can see your eBay ID announced as the winning bidder. And thatกs when your heart drops to your toes. Itกs not your eBay ID at all, but some joker who calls themselves กspeedyfingers147ก.

How could this have happened? You were the winning bidder with only 10 seconds to go!! Speedy or not, it just doesn’t seem humanly possible.

Well, you’re right. No one is that fast. Speedyfingers (I made that one up, so if itกs your actual eBay ID, please don’t sue me!) won the auction in the final 4 seconds. It isn’t humanly possible because กspeedyก didn’t actually place the bid. The bid was place on his or her behalf, from a remote server, using something called Bidding Software.

The act of placing a bid during the final seconds of an online auction is called กSnipingก and itกs perfectly legal on eBay. Bidding wars and sniping are an eBay sellers dream and a buyerกs nightmare. Why, you’re asking yourself, don’t these people just use eBayกs trusty proxy bidding process? Why not just discreetly enter the maximum they’re willing to pay at the beginning of the auction, then let the cards fall where they may? Well, for a couple of reasons. First, itกs not human nature. If all you have to do is outbid the next guy by fifty cents or even five dollars to win, wouldn’t you?

Second, it doesn’t make economic or strategic sense to place a bid anytime before the last five minutes of an auction.

Think about it. EBay encourages bidders to use the proxy system and place bids early. What this means is that an inexperienced bidder who wants an item will to want to be the highest bidder right away, and will keep upping their bid to hold that winning position. Theyกll only stop when the bidding exceeds their budget. Then the next guy comes along and continues the process. If this starts at the beginning of a seven or ten day auction, and ends with a bidding war in the last 10 minutes, the final price for the item can spiral out of control. Many items sell for far more than fair market value because people get caught up in กbidding feverก all they want is to WIN, they’re not even thinking about whether the price is realistic.

A better strategy would be for everyone to กwatchก the auction until the very end. Again, thereกs two good reasons. One, the price doesn’t spiral up as just illustrated. Two, the auction has zero bids, so it attracts fewer bidders less competition. Itกs a fact that once an auction has at least 1 bid , it becomes a magnet for additional bidders. Shoppers scanning an auction page tend to jump to the ones with bids, figuring there must be something that attracted other bidders. The more bids, the more interesting the item looks.

Wouldn’t it be great if a seller started a two carat diamond ring at $0.99 and no one bid until the last five minutes, and they all bid in fifty cent increments? Someone might win the ring for just a few bucks!! Of course, that never happens, but it would be the ideal situation for a buyer and it would put eBay out of business in a hurry. EBay encourages early bidding and smiles upon the snipers of the world. EBay makes their profits on listing fees and กfinal valueก fees. The more the item sells for the higher the กfinal valueก. This makes eBay very happy. Thatกs why youกll never find any tutorials anywhere on eBay telling you to wait until the end of an auction to bid.

OK, so now that we all understand the benefits of sniping, lets get back to our friend กspeedyfingers147ก. Speedy probably started out in life just like I did. She learned everything she knew about eBay from eBay and never realized there was such a thing as bidding software. Never knew a computer could do your sniping automatically, bid on your behalf in the last 2 to 8 seconds of an auction, and do it while you’re asleep. With sniping software, you tell the software program which auctions you’re interested in and how much you’re willing to pay. EBay never knows youกve seen the auction until your friendly sniping service swoops in and places your bid with only seconds to spare. Neither does your competition. They never see you coming. The only way you can lose is if someone else uses the same program sets their maximum bid higher than yours.

Yes, my friend, you can still lose. There is no guarantee of winning an auction no matter what system you use, if someone else is willing to pay more. If you set your maximum bid at a million dollars for a hunk of Elvisก belly button lint and some nut is willing to pay a million ten, you’re still going to lose!

But, thereกs something about losing thatกs good for the soul. Itกs the satisfaction of knowing that you didn’t lose your head and spend more than you could afford!! Trust me, Iกve been there, done that, and come to regret it. With sniping programs, you can กset it and forget itก and walk away knowing that if you don’t win, you couldn’t have afforded it anyway.

Whatกs that I hear you saying? กBut I could have had it if Iกd just upped my bid by another fifty cents!ก Hey, did you listen to anything I just said? Do you want to drive yourself nuts? Itกs only stuff, after all. You can’t take it with you, and there will always be more. The beauty of eBay is that there will probably be another just like it, or at least something just as fabulous.

Speaking of which, thereกs another big advantage to using bidding software. Two things, actually. (again). First, on eBay, itกs a huge nono to retract a bid. You can only do this under the most dire of circumstances and if you do it too many times youกll be politely asked to leave. Permanently. Second, sniping programs allow you to do something called กcontingency biddingก. Suppose you’re interested in several very similar items and you want to win at least one of them but not all. Provided they’re not all ending at the same time, you can create a contingency plan telling the bidding software to cancel your bids on the other items as soon as you win one of them.

In all cases, you can change your mind about an item you’re bidding on at any time (except in approximately the last 15 minutes) because eBay doesn’t register your bid until the Sniping program enters it for you, at the very end of the auction. Isn’t that nice? No more กwatchingก an auction you’re unsure about, and then forgetting to bid on it. No more finding out youกve read the description wrong and you’re bidding on an item you don’t want. No more finding something you like better after youกve already committed yourself to another item, and having to pass on it. Or worse, spending way too much on both!

There are several sniping programs out there. My personal favorite is PowerSnipe, at www.PowerSnipe.com?af=netbrainer , because their กAuto Searchก feature makes the bidding process even easier by allowing you to browse auctions through the program’s built in web browser. You can check out competitors with a simple search in Google.

Take a norisk tour through the Power Sniping program with their trial version. Believe me, the first time you snatch an item away from Speedyfingers147or anyone else for that matteryouกll be hooked.

About The Author

© 2004 NetBrainer LLC. An eBay PowerSeller and rabid eBay shopper, Carolyn Schweitzer is the owner and editor of www.NetBrainer.com, a site dedicated to improving the performance of buyers and sellers on eBay, and teaching eBay as a business. Carolyn provides weekly recorded tips on eBay for Third Mind USA SmallBiz radio at http://thirdmindusa.com/.

[email protected]

This article was posted on October 28, 2004

by Carolyn Schweitzer