Say something costs $5.00. I bid $6.00 the ‘current price’ stays at $5.00. Why?
Thanks.
The example you give doesn’t quite make sense, unless you were the first bidder for the item and $5.00 was the minimum price.
When you enter a bid, you are telling eBay what the maximum price you’ll pay is. eBay then increases the “current price” as much as is necessary without going over your maximum bid. Here’s an example.
Let’s say there’s an item for sale whose current price is $50. The current winnder, Alice, has entered a maximum bid of $60. Bob decides he is willing to pay $70 for the item, and so enters a bid of $70.
eBay then increases the current price as much as is necessary for Bob to be the winning bidder, and the current price will be set to something like $61. Alice gets an email saying she’s been outbid, and Bob gets confirmation that he’s the current winner.
Now suppose Carl sees the current price of $61 and decides he’ll bid $65. This is still less than Bob’s original bid of $70, so eBay bumps the price up to $66, informs Carl that his bid was too low, and Bob remains the current high-bidder.
Until Donald comes along and bids $100, beating Bob, and therefore bumping the price up to $71.
[sub]All the numbers are examples. The bid increments increase with the value of the item, so would probably be slightly more than a dollar.[/sub]
Clear as mud, eh?
Actually that seems illogical. Why not just have the current price equal to the maximum bid? That way people can bid, knowing that theirs is the maximum bid. When I’ve seen auctions on TV the price has sold for the exact price the bidder offered.
I am sure there is a good reason for it, I just don’t understand it. (p.s. my example wasn’t actual prices, it was just to illustrate that my bid hasn’t upped the price)
In a live auction, the bidders usually have an upper limit in mind when they start bidding. The only live auctions I’ve watched are the Barrett-Jackson auto auctions. The auctioneer will start the bidding with, say, $10,000. He’ll then ask if anyone wants to bid $11,000. Someone will bid and he’ll move up to the next increment and until the car (or whatever) is sold. I’ve never seen an example where someone would jump from $10,000 to $50,000 in one bid.
Ebay is a proxy bidding auction. You put in your maximum bid (as well as many others) and the software acts on your behalf. Let’s say you want an item with an opening bid of $10 (with no reserve). You are willing to go as high as $50. If no one else bids, you get it for $10.
I once used to bid at an auction site where that was the case. The effect was that nobody wanted to waste money by bidding too high so everybody bid just marginally higher than the last bid and it was mostly about who was fastest (and luckiest) in the final minute. With the current ebay system you can decide what you think the item is worth, set your limit accordingly and watch. There is no need to have a radio-controlled clock next to you and hit submit just 1 or 2 seconds before the end.
D’oh! DO NOT HIT ENTER UNLESS YOU’RE FINISHED!
In a reserve auction, even if you are the highest bidder, you won’t win unless your bid meets or exceeds the reserve.
Of course, buy it now is self-explanatory. You could get it cheaper by bidding regularly, but you might not want to chance it if it’s something you really want.
Sorry, does US ebay have reserves? Ours (Germany) does not, and I always thought at least the rules were pretty global (and I never understood the need for reserves…) Now that’s interesting.
Ah It makes more sense now. Thanks guys.
It will take a bit of getting used to not bidding by small increments.
I just wanted to make sure there wasn’t something wrong with my account or something. It might actually turn out to be a preferable system.
Oh, yes, indeed!
The only thing I would say they’re good for is to test the market to see what you could for an item. I had a friend who used ebay quite a lot and had a rare item he didn’t want to sell (and couldn’t find any others on ebay), but wanted to gauge the market. He set the reserve at some outrageous amount that he knew he would never get ($1,000,000).
Otherwise, if you won’t accept anything less than, say $500, for an item, just start the bid at $500.
Just don’t fall victim to bidding fever. If it’s a fairly common item, it’ll come back. Stick to your highest bid.
I was looking for David Bowie’s Sound + Vision in the 6-lp clear vinyl version a couple of years ago. I had gotten outbid on five different occasions. I waited and waited and finally got a set for $25. Other sets had gone for $50 (the original selling price) and more.
The main reason is that because unlike a live auction, in an eBay auction everybody isn’t there at the same time. A live auction ends when nobody is willing to go higher, and may go on as long as necessary. But an eBay auction is a race against the clock. So the proxy bidding system ensures that you will get your chance to go up to your maximum, whether you’re there or not. It further ensures that you can’t be beat by someone bidding a penny more than your maximum a second before the auction ends. Since nobody knows your actual maximum, last-minute bidding may be fruitless.
(There is a significant community of eBayers who insist on bidding at the last second, for reasons that remain entirely unconvincing to me.)
Makes sense. Thanks.
Like gambling, there are just things people do that are not logical. Perhaps they don’t realize it’s proxy bidding. Or maybe they decide at the last minute they want the item more than they first thought (typical compulsive behaviour)
If someone bids on a reserve price auction and doesn’t meet the reserved price, and the seller also has the buy-it-now option, another seller can actually use buy-it-now and get the item (Portugese ABBAcadabra CD!).
Otherwise, bidding minimum price eliminates buy-it-now.