EBay and other online auction sites are great places to find rare and collectible items, clothing, electronics and a million other things. But even the eBay website itself will tell you… caveat emptor: buyer beware. You as the bidder enter the auction place with visions of buying things for pennies on the dollar. The sellers know this and work it to their advantage. Certainly there are bargains to be had, but if you’re not careful you’ll end up paying more than retail for an item. Case in point – I once bid in an auction for a copy of this book. It is not rare; in fact, it can be bought at just about any Barnes and Noble or Borders anywhere for $6.99. But someone decided to top my bid and paid $8.50 for it, plus $2.00 shipping – that’s $10.50 for a used $6.99 book. I paid $7.47 with tax the following day at my local B&N and didn’t have to wait 5 days to get it.
Anyway, since I understand online auctions like some people understand poker, I’ve decided to whip up a quick buying and selling guide that distills my years of experience in online horse-trading. Tips for buyers are immediately below. Scroll down to see the tips for sellers!
Tips for Buyers:
Know the Rules: Auctioning is a game. Games have rules. If you don’t know the rules, you’ll never win the game. It’s that simple. If you don’t follow the basic rules below, you’ll either lose your auction or win it but end up paying way too much.
Be Patient: First of all, there are two ways to buy things from eBay – “slow and cheap” or “fast and expensive”. If you’re looking for something fairly common at a decent price, search through the listings for up to six weeks before you buy. I wanted a Japanese copy of Madonna’s Ray of Light CD because it comes with a bonus interview disc, but I didn’t want to pay the $47 Amazon wanted for it. A few copies a week would show up on eBay, but they were usually priced at $30 or so. After about 5 weeks, I found a “Buy It Now” auction that had the disc brand-new for $17.97. Patience is a virtue indeed. On the other hand, if you’ve just gotta get that Captain Kirk action figure as soon as possible, you’re limited to the auctions in progress. Which means that you’re more likely to get into a bidding war, which will only cost you more.
Use Saved Searches: While I suggest that you search for non-critical items for up to six weeks before buying, that doesn’t mean that you have to actually search for those item(s) manually. EBay lets you save your searches and will send you an email when a new item of interest is listed. Just click the “Save this search” link the next time you search for something. Also remember that you can use the + or – operators in your auction searches to add or remove words from the results. For example, if you were looking for U.S.S. Ronald Reagan memorabilia, you could search for “USS Ronald Reagan –mug –shirt –poster” to remove items you’re not interested in. On the other hand, searching for “Laetitia Casta +video” will only return auctions that have both the French model’s name and “video” on the same page.
It’s All About Supply and Demand (part one): It’s so simple, but it’s so often forgotten: if what you’re looking for isn’t one-of-a-kind, there’s more than one of them. Related to the previous rules about patience, you need to learn to keep your cool. There’s more than one “mint-condition Rolling Stones Sticky Fingers album with original ‘zipper’ cover” out there, I promise. It’s worth it to do some research before you buy. How many Rolling Stones items are there on eBay in general? Are they getting bids? How many copies of Sticky Fingers with the original zipper cover are out there? Are there any copies with “Buy It Now”? If so, what’s the price? How many auctions for this item have closed in the last 30 days and how much did they go for? How popular is the band at the moment?
It’s All About Supply and Demand (part two): Keep in mind that prices tend to rise when a band or celebrity release a new album, get arrested, dies or otherwise generates public interest. Prime examples of demand increases include Princess Diana, the World Trade Center, Anna Nicole Smith and Madonna. After Princess Diana’s death in 1997, anything having to do with her sky-rocketed in price. Likewise, prices for World Trade Center memorabilia went through the roof after September 11th, 2001. Anna Nicole? Her things – posters, Playboy issues, videos – were selling for almost nothing until The Anna Nicole Show debuted on E! – at which point they went up, up, up! Madonna stuff was selling at near all-time lows on eBay after the hoopla from American Life‘s release died down but before her Re-Invention Tour was announced. Once news of the tour hit headlines, prices started creeping up. As shows started happening, fans would get wistful after the show and bid on items with abandon. Prices spiked. Now that the tour has been over for some time, prices are on their way down again. So if you can wait… do so! Having said all that, any item up for sale on eBay has a “probable worth”, an average selling price. Any copy of Madonna’s Sex book in good condition almost always sells for over $125, regardless of her popularity at the moment. Don’t expect to be able to buy it for $10 just because she’s out of the spotlight! Expect to pay the “probable price” for the item and start working your way downwards.
Check the Feedback: EBay’s feedback system isn’t perfect, but it’s the best thing you’ve got to judge the merits of a seller. Be sure to check the feedback of every seller you buy from. Be wary of any seller with little or no feedback, or a seller that has multiple feedbacks from the same person(s), especially if they are from low-cost auctions. Scam artists often band together or create multiple eBay IDs and sell each other (or themselves) lots of $5 or $10 items to build up a good “track record”. If you see a lot of negatives walk away. If something in a seller’s feedback strikes you as fishy, walk away. There will always be another item!
Only Buy Through Ebay: EBay and PayPal have decent – but not stellar – buyer protection plans in place in case the seller takes off with your money. However, these plans only apply to eBay auctions. If you email the seller and ask him to sell you something “on the side” and get ripped off, eBay will not help you get your money back. At all. If you see an item you like but has ended with no bids, or if you suspect that the seller has additional stock of the item, email them using eBay’s email system and ask if they will re-list the item(s). Any decent seller would be happy to accommodate you.
Read the Description Carefully: Back when PlayStation 2 and Xbox game consoles first hit stores they were sometimes difficult to find. Many unscrupulous eBay sellers were selling the boxes (yep, just the cardboard box) that the consoles came in for $400 – not the actual game consoles themselves. It sounds silly, but if you were a desperate parent looking for the game system your kid just had to have for Christmas, it was easy to quickly scan the item description and bid anyway. A recent eBay scam busted on Ars Technica involved someone who was selling “a wholesale price list of Gateway laptops” for $500. The scam worked because it looked as if the auction was for an actual laptop. The seller’s item page had lots of pictures and a full page of text listing every single component and feature of the laptop – even the types and sizes of screws used in the laptop’s case! To just about anyone, it looked as if this auction was for a laptop. But – buried in the middle of the massive block of text – was the following sentence: “This auction is not for an actual laptop, but for a wholesale list“. It was very hard to pick out since the seller used very bad grammar and a boldface font, both of which hurt the eyes to read. Yet another scam is for “link sales”- you might see a listing for what appears to be a $400 video card selling for just $50. The item description might lead any normal person to believe that they are bidding on the actual card itself, but if you read the fine print (or sift through the linguistic acrobatics) you’ll see that the seller is actually selling “a link where you can buy this product for $350” or something similar. So you’ll end up paying $50 for an email from the seller that includes a link to a “price finder” site like Pricewatch or PriceGrabber, which you could always have done yourself for free.
Be Careful With Designer Goods: If you go to downtown Atlanta at lunchtime, you will find several street vendors with stalls full of Coach or Kate Spade purses for $10 -$30 each. Of course these are as fake as a $3 bill, but you knew that already. Some of the people that hock them have moved onto the Internet too. And while you know the Coach bag the guy on the street is selling is a fake, you can’t be sure online, since they might not be presented as fakes, since you can’t look at and touch the goods and because most sellers start their bids out at $1. Beware of any seller that claims to be an individual that “got duplicates of this item for Christmas” or “can’t fit in this Chanel suit anymore” yet seems to have 10 of the same dress, purse or expensive sunglasses for sale at the same time. Remember the Golden Rule: if a deal looks too good to be true, it probably is.
Watch the Payment Methods: If you see an item where the seller will accept only cash, money orders (or even worse) Western Union transfers, walk away. While USPS money orders offer a “money back if lost or stolen” guarantee, it’s a long process that can tie up your money for weeks or even months. And auctions that require Western Union as the only method of payment are almost always scams, since once the cash leaves your hands it’s gone forever. And don’t think that your local police, postal inspector or FBI agent will care – these agencies are typically too busy fighting “real crime” to worry about the guy that skipped out with your $40 for rare Nirvana CD. In the real world, you need to lose at least $5,000 to get law enforcement even remotely interested in your loss. So be careful who you send your money to.
NEVER Buy Anything Autographed: It has been estimated by more than one source that up to 90% of all autographs in the sports memorabilia market are forgeries. That’s 90% of the entire market, not just what you see on eBay. But since online auctions have no “face-to-face” communication, chances are even greater than 90% that the autographed item you buy on eBay will be fake. If you absolutely insist on buying an autographed item on eBay, it pays to look for the obvious, like signature misspellings or signatures that don’t look anything like others posted on eBay. It sounds simple I know, but I guarantee that if you search the eBay autographs section for a half-hour, you’ll find at least one item autographed by “Donavan MacNab” or “Ben Rothlisburger”. You’ll probably even find a “Sammy Sosa autographed baseball” where his signature looks suspiciously like a fifth grade girl’s handwriting. If you’re really into autographs, then it pays to do some background checking on your “target celebrity”. A “Dwight Eisenhower picture autographed with Sharpie” cannot be genuine because Sharpie pens weren’t marketed until after Ike’s death. Know your celebrity: “Tiger Woods autographed golf balls” must also be fake, since Tiger never, ever signs golf balls (or pinflags or posters or anything that could be easily sold on eBay). One good note is that “obscurity pays” – if you see an “autographed Corey Hart poster” you can almost be sure it’s genuine. Who would fake that? Also, try to look for sellers that can provide photographic evidence that they met the celebrity in question. I know of at least two eBay autograph sellers that always have someone around to take a picture of them standing next to the celebrity as they sign the item you’re bidding on. I believe them to be 100% legit, and if your seller can’t provide such “evidence” – walk away. Lastly, none of the above applies to “special” high-profile auctions, like eBay hosted Christies or Sotheby’s type of stuff.
Dutch Auctions Are Your Friend: Dutch auctions are auctions where a seller is selling multiple copies of the exact same item in the same auction. For example, I might have an auction where I’m selling five of the exact same model TV, each one sealed in a box and completely identical. Understand that I’m selling them individually but in one auction. You can bid on just one TV or all of them if you want. Final prices are determined by the lowest and earliest winning bid (see examples below). Because there are several items for sale, prices usually stay lower than single-item auctions. Lots of window shoppers might not even notice that it’s a Dutch auction and pass it up for the next listing.
Example 1: Five TVs are for sale with a starting bid of $5. Bidder A bids for 1 at $5. Bidder B bids on 2 TVs at $5. Bidder C bids for the third TV at $5 and Bidder D bids for the last TV at $5. The auction closes. Everyone gets a TV for $5, Bidder A’s price.
Example 2: Five TVs are for sale with a starting bid of $5. Bidder A bids for 1 at $5. Bidder B bids on 2 TVs. Bidder C bids for the third TV and Bidder D bids for the last TV. Bidder E comes along and bids $10 for 2 TVs. The auction closes. Bidder E wins 2 TVs, Bidder C wins 1 TV, Bidder B wins only 1 TV and Bidder A wins 1 TV. Bidder D wins nothing because he bid too late. Everyone pays the lowest bid price, which was Bidder A’s $5.
Example 3: Five TVs are for sale with a starting bid of $5. Bidders A, B, C, D and E each bid $5 for one of the TVs. Bidder F comes along and bids $10 for one of the TVs. Bidder G comes along and bids $12 for two of the TVs. The auction closes. Bidder G wins 2 TVs, Bidder F wins 1 TV and Bidders A and B win 1 TV each, which means that Bidders C, D and E win nothing. Everyone pays the lowest bid price, which was $5.
Bid Late and Only Once: Sniping is the act of bidding on an auction at the last possible second, thereby preventing anyone else from topping your bid. Even though it’s frowned upon, it works. Bid too early and you’re not only advertising to the world that you’ll pay a lot for the item, you’re allowing others to view (and possibly bid on) the auction. Swoop in at the last moment and the auction’s done before the previous high bidder can even respond. To snipe, simply figure out the maximum amount of money you want to spend on an item and bid that much with 10 seconds or less left in the auction. Remember that your final bid price will only clear the previous maximum bid by the auction’s stated bid increment. So, for example, if an item were at $45 presently and the current high bidder’s maximum proxy bid is $50, you can bid $300 for it with three seconds left and only actually have to pay $55. Of course, you have to be careful – since you don’t know what the present high bidder’s maximum bid is, it could very well be $295 and your $300 bid will only barely cover the increment bid – and might also be far more than you wanted to pay. So you could still lose the auction if your last-minute “snipe” is too low, but at least you’ll get the satisfaction of jacking up the other guy’s final price!
Search for Misspellings: Sellers make mistakes too, so it’s worth your while to search for “Micorsoft Mouse” or “Modonna CD”. Since few people will take the time to search this way, you can sometimes find insanely great bargains.
“Buy It Now” is a Good Thing: EBay gives sellers the option of setting a fixed price for an item. This option will be unavailable as soon as someone bids on an item (unless the item has a reserve price), so it might be worth your while to use BIN. Most of the time you will pay a premium to do this, but you will gain the comfort of knowing that the auction will end – with you as the winner – immediately. You can sometimes find bargains too – like the Ray of Light CD for $17.97. I once saw an auction for a Ray of Light silver votive that usually sells for $75 – $100 with a BIN price of $15. What a steal! Too bad I was too late – some lucky buyer found it and bought it as soon as it was posted!
Tips for Sellers:
Always start at $1 (part one): People can’t resist a good bargain. As soon as they see a Hummel figurine that’s “worth $3000” selling at $1, they’ll absolutely jump on it… and ride it all the way to the $3000 that it’s worth. I’ve had rare records sit at $1 for almost the entire auction… until there’s two minutes left, when the price shot up to over $100. Just be patient. Also, remember that people can’t help falling for a “deal”. You’ll often see that an auction for a rare collectible might have 34 bids and is up to $150 while the same exact item from another seller has zero bids. Why is that? Because the “no bid guy” had an opening price of $145, which seemed like less of a deal than the guy who started out at $1 – even though everyone knows that the item is worth at least $200.
Always start at $1 (part two): EBay charges you a minimum of two fees to auction an item, an insertion fee and a final value fee. The insertion fee – sometimes called a posting fee – is based on the opening bid price of your auction. For instance, a used CD with an opening bid of $1 might have a posting fee of 50¢ while a used car with an opening bid of $5000 might have a posting fee of $40. Of course, going with the cheapest opening bid saves sellers money – in addition to being the nice psychological tool mentioned in part one – so most start off as low as possible. EBay also offers several optional services for your auctions, like listing your auction in BOLDFACE, making it a “featured auction” that appears to the top of search results pages, adding as many pictures as you want and putting the auction on the main ebay.com page. All of these features help your item sell, although some of the options cost too much for some kinds of auctions. There’s no sense in spending $19.95 to make an auction for a used CD a “featured auction” if it’ll only end up selling for $5, no? Lastly – just an FYI – the final value fee is usually around 5% (or less) of the auction’s final highest bid. It’s an awkward system: around 5.25% of the initial $25.00, plus 2.75% of the remaining closing value balance ($25.01 to $1,000.00). In short, think of eBay’s final value vig as “sales tax”.
Pictures, pictures, pictures: As most everybody else will tell you, always have pictures of everything you sell. Swipe pictures from other auctions if you must, but always, always have them. Also, use HTML to spice up your listing and try to make it “integrate” with the look of eBay’s site, but remember that not everyone is on cable or DSL.
End on Sunday: The best time to have an auction end is around 11:00 pm Eastern Time on a Sunday evening. According to eBay, this is when their site gets the most traffic. Remember that most bids come with under an hour left in your auction. Ending it at 5:00 am ET means that no one is watching your auction at the time when it should be getting the most attention!
Spell correctly: Sounds obvious I know, but “Mircosoft Mouse” is going to get waaaayyy fewer hits than “Microsoft Mouse”. A few people are smart enough to search for these kinds of things, but they’re snipers anyway.
Be Honest: If an item is used, say so. If it’s chipped or cracked, say so. People will appreciate your honesty. You could pull a fast one on people a few times, but karma will get back to you. Besides, I’ve noticed over the years that being honest doesn’t seem to have much of an impact on my final prices (relative to the condition of the item of course).
Be Wary Of Payment Scams: Although most eBay scams have traditionally come from the seller side, there are certainly “buyer scams” out there as well. Don’t sell anything to someone in Indonesia, Africa or Eastern Europe – there’s about a 99.8% chance that the credit card they’ll use is stolen and you’ll be stuck with a chargeback. Do not accept as payment any cashier’s check far in excess of the auction amount. Here’s how this scam works: typically an African (usually a Nigerian) will win an auction and then ask the seller if he can pay for an item with a cashier’s check for (say) $8000. All the seller needs to do is deposit the check and send the balance on to a relative (or business associate) in the United States or elsewhere. The problem is that the check is a forgery, typically such a good forgery that it will take your bank a couple of weeks to figure out that the check is bogus. If you send the money on, then you’re on the hook with the bank for the forwarded amount – and are possibly out your merchandise if you sent it already. Never accept any offer to “sell things on the side” – if you sell something outside eBay, then their payment protection schemes will not apply to you… and the credit card used for that purchase is probably stolen as well. If the person really wants to buy something from you, offer to list an auction for it with an agreed upon “Buy It Now” price; if they refuse, walk away!
Don’t rip people off on shipping: I don’t mind if people charge a buck or two extra for shipping, especially if it’s an individual. Sending a package from the Alpharetta, GA post office usually took up my entire lunch hour, so I can appreciate the cost of people’s time. But sellers that charge $20 to ship to stick of RAM deserve the +100 D0D. Post a fixed shipping price on your auction page IN ADVANCE, if possible. If you can, also include FedEx or UPS overnight as shipping options. I’ve only had people use it a couple of times, but next-day delivery was the sole reason those two items sold, plus I was able to either pad the hell out of the shipping rate or use the company’s FedEx account – which added $25 to my pocket!
Offer as Many Payment Methods As Possible: As a seller, I offer people cash, check, money order and PayPal as options. Because as a buyer, I won’t bother with 99.99% of auctions that are check\money order only.
Don’t Bother With International Shipping: Dealing with overseas customers is just a pain. Shipping always costs more than what the USPS, UPS or FedEx online price calculators say, so you get dicked on that. Plus, overseas customers are statistically more likely to dick you over with a chargeback or other non-payment. And if that happens, you’re much more likely to get your money back from PayPal or eBay if the deadbeat is from Boston not Budapest.
“Buy It Now” is a good thing: Most of what I buy on eBay these days is BIN. Think of it as just another option that will make someone buy your stuff. If you have an item that I know is worth $50 and you have a “Buy It Now” for something close to that, I’d just as soon do that than wait for it to close, because I know that someone else probably knows it’s worth $50 too and will bid it up if I just bid normally. See what the closing prices are for similar items and price accordingly.
Always use 3-day auctions for software: Even if you are selling absolutely legit Microsoft software in a retail box, chances are that eBay will end your auction for “copyright infringement”. Use a 3-day auction in this case, since chances are greater that it’ll slip through the eBay police’s watch. If you have it as a 10-day auction, they’ll be able to find it and kill it and you’ll be out your sale and your posting fees.