As an eBay buyer, I love sniping tools; they enable me to place my maximum bid at the same time as not provoking buying fever and keeping my cards close to my chest and keeping my options open until near the end of the auction.
As an eBay seller, I hate sniping tools; my auction sits there getting nothing but visits and watches, maybe a bit of good-natured, moderate back-and forth bidding from a buyer or six, then, mere seconds before the end of the auction, a complete outside sweeps in and scoops the deal at a price that probably isn’t near his maximum bid and that one or more of the other bidders would have perhaps considered revising their maximum to compete with.
So sniping tools are (IMO) generally good for the buyer but generally not so good for the seller; in the long run though, I wonder if this won’t just work out to be not so good for everyone, if it affects the way in which sellers list their items and indeed puts some amateur sellers off selling at all…
Anyway, how about this for an idea:
Reverse online auctions; you list the item at a high price; over time, the price steadily and automatically decreases until one of the following happens:
–Someone decides that the price is sufficiently low and purchases at the prevailing price
-It drops to the reserve price and remains there as a ‘Buy It Now’ item for the rest of the listing duration (or perhaps, optionally, the auction ends when the reserve is breached)
-It drops to a ridiculously low price and the lucky buyer gets it for not much more than the postage cost
I think it wouldn’t work so well. It’s harder to deal with the psychology of, “Well, if I wait another day, it’ll go down” as opposed to the current method of waiting possibly bringing an increase. Also, most people would probably wait to see how low it would go, and then once it hit the reserve, it wouldn’t be an auction anymore. It would be a contest to see who has the fastest computer/internet connection and can click on it first. I also can’t imagine that any buyers would opt to not set a reserve price since they’ll be further and further screwed as time goes on.
I agree with audiobottle, that the psychology of eBay would be lacking.
One of the things that hooks people to eBay is the constant promise of an absolute bargain, reinforced by all those ‘99p’ prices. Even though we all know they’re not going to stay that low, it somehow taps into our minds, certainly more than a whole load of ‘£300 starting prices’ would.
I should mention that I’ve actually seen a similar system work in a supermarket; there was a considerable amount of produce that was near its sell-by date; normal store policy is to reduce the price a bit, but it’s too easy to get it wrong:
-Reduce the price too far and it all sells, but you’re not maximising your profit
-Reduce the price more modestly and it might not appear enough of a bargain to sell through (and you have to throw it away, also losing potential profit).
What this particular supermarket did, on this particular day, was to arrange the goods on four shelves; a member of staff reduced the prices of all the items on the top shelf, then started on the second shelf and so on; when he reached the end of the bottom shelf, he started again on the top one - some items had half a dozen price labels, one on top of the other, each one lower than the one it covered. New items were brought and added to the shelves occasionally.
There was considerable interest and people reacted in two distinct ways:
-Some of them simply took what seemed to be a bargain at the time - they typically walked away with the higher-quality items (the fillet steak, the stilton cheese, the duck fillets). They got their choice of item and at a good enough price but if they’d waited, they might have got it cheaper (or of course they might have missed out entirely).
-Some other people stood waiting for individual prices to drop to bargain level, but because of this, they were often gazumped by people who wanted something quite specific and were happy to pay a higher price. The folks prepared to wait got some fantastic bargains at giveaway prices, but they typically walked away with whatever was passed over by others (the turkey drumsticks, the stewing steak, the beefburger patties)
I suppose with reverse auctions, a tool would be possible to bid automatically once the price had dropped to whatever level you considered reasonable - the thing to remember is that not everything would be at the high prices at any one time; if the 99p starting price is a hook, how about “Starting price £300, now reduced to £89.99!”?
When I bid on a conventional auction (which is not often, as most of my eBay purchases are DVDs from dealers at fixed prices), I use HammerSnipe, because it’s free and it will bid automatically from their server (rather than my PC).
The trouble is, this couldn’t work for a supermarket in general. Everything on those shelves was sold at less than what they had hoped to get for it. Would you use an auction site if everything you sold would sell for less than the going rate?
Plus, remember that all the cheap listings will get clogged up with stuff that nobody wants…to see what it would look like, go to the “CD-Rom drive” page of eBay, and look and the endless un-bid-for listings.
Well, quite, but an auction is not generally like a supermarket. Most of the items I buy on eBay, I do get at a price I consider below the going rate and there wouldn’t have to be a case of ‘less than you hoped’, because of the reserve prices.
I think it could work, simply because it plays on self-interest; do you really want the item now, or do you want it at a lower price? Do you want it for sure, or do you want to wait for a reduction, but risk not getting it at all?
I think it’s called a Dutch auction and I have seen two in real life. Both times with shops that were closing down. It attracted lots of attention because every morning people would pour in to check the latest price reductions on the items they were interested in. Expensive items were displayed prominently out front and on more than one occasion I saw someone impulsively buy something because someone else looked interested. I’m sure it worked well for the retailers.
I think the fairest anti-sniping measure would be a “patience” setting for the seller. The item goes up for bid, and will be open for at least a week (time frame chosen by seller). At the end of that week, if there is activity near the close, the auction remains open for another 3 days. If there is no activity in those three days, the high bidder wins; if there is activity, the auction is extended for one day, and so on, whittling the length of the extensions down to the seller’s preference. That way instead of performing just one check for a high bidder, the seller checks for interest from several buyers. If only one buyer is interested, the market has found its price. If two are interested, the seller has the option to leave the bidding open to try to fetch a better price, instead of arbitrarily choosing one.
A seller who checks frequently (impatient) may end up choosing the bidder who is bidding most frequently – an okay measure of interest.
A seller who checks infrequently (patient) might require 24 hours of inactivity before closing a sale. This way each of the snipers plays against the others, and the person willing to pay the most gets it for pennies more than the second-place contender.
Of course, the downside is that this makes things less attractive for a buyer.
No, a Dutch auction is where the seller has several items (let’s say 10) and the ten top bidders each get one item for the 10th-highest price. So if 20 people bid a range of prices from $5-$100, then the top ten bidders would probably each pay something like $45 for one of the items. Google decided the price of their IPO using a Dutch Auction.
As a matter of fact, eBay has offered Dutch auctions for as long as I can remember; it’s useful for selling a large quantity of identical items, whether they be IPO shares, tulip bulbs, or keychain lights.
Jurph, I used Yahoo Auctions a few years ago, and at that time they had what was effectively an anti-sniping patience measure. No auction would end unless a set period of time passed after the last bid-- perhaps a half hour. This ensured that all interested bidders had a chance to meet the highest offer, and therefore let the item reach its true market value.
The problem with the supermarket analogy, or the store analogy, is that they don’t translate well into the online mentality. When you’re at the store and you see something that looks good for a cheap price, you get it then because who wants to come back in an hour just to see if it’s cheaper? But online, it’s easy to just click again. Plus, the type of people who are using auction sites are mainly doing it because they want to find something cheap. Obviously there is a percentage of the population that is looking for hard to find items, but for them price is usually not a concern anyway. So the people who want things cheap will have a harder time justifying buying something right now when it might go cheaper than buying something right now or it might become more expensive. Both of those possibilities are more concrete than the idea that somebody else might get it first. After all, most items aren’t unique, and in your system, when a price is dropping, you’ll almost undoubtedly be able to find it for as cheap as the one you lost.
Unless someone else also gets there first, and again etc; you could apply the same argument to ordinary auctions; if the price is rising, why bid any higher for the item when you will undoubtedly be able to find another one starting at a lower price? (the reason is that it will also be bid up past you).
However, the basic idea that the price is going to drop is still there. No matter what, in the new style of auctions, if you wait, you stand to gain because the price can go down. With the current auction system, if you wait, you stand to gain nothing as the price can only stay the same or go up. Thus most people will wait since you stand to gain by waiting. You’ll lose most impulse buyers who think, “Oh man, this is a good price, if I don’t bid now it’ll only go up!” as instead they’ll think, “Oh man, this is a good price, and if I just wait another minute/hour/day it might go down!”
The way to deal with sniping has been discussed in other threads. To me, the most promising idea is to make an online auction resemble a live auction in that a valid bid causes the auction to remain open for at least n minutes longer (n = something between 2 and 30). This gives other interest bidders the chance to step in without being shut out.