Thursday I
blogged
about my imminent bid for a 1959 Canonflex on eBay.
I got it for $255.50, outbidding the loser by $5.
Here’s a quick review of how eBay auctions work:
Highest bidder wins; all bids before close count (even if 1 second before); if a bid is more than the current high bid plus an increment, only the smallest necessary amount is bid, with the rest being held back for possible future automatic bids until and if the full bid amount is needed.
The eBay computer does the automatic bidding for you; all you do is tell eBay what your maximum is.
If all goes well, you won’t have to pay that much.
eBay is a so-called second-price auction because the price is effectively set not by the high bidder but by the second-highest bidder, since the final amount from the high bidder is only just enough to top the losing bid, plus the increment. The actual bid from the high bidder doesn’t matter, as long as it’s high enough.
It makes no difference at all when bids are made (unless there’s a tie, which is rare), so one of the great eBay mysteries is why people bid early. For example, today I saw a Zeiss Ikon Contarex Bullseye auction ending in a week with 5 bidders already. The price is now at $11. I’m sure that camera isn’t going go for $11, or even $111. It will go for $400 plus, maybe even $600 plus.
(If it goes for $400, I’ll take it myself.)
Update added 25-June-2009: It went for about $450. I didn’t bid at all, but instead found another Contarex in even better shape and got it for $300 in a Buy-It-Now-or-Best-Offer deal.
Maybe people confuse eBay auctions with live auctions, which end when no one tops the high bid. (”Going once, going twice, …”) If they do, it means they haven’t bothered to read any of the excellent eBay help pages, or any of the numerous articles and books about how to buy on eBay.
But this is about the Canonflex.
As they used to say many years ago when I was learning to play Bridge, let’s review the bidding. (The names are made up.)
The auction was due to end on 12-June-2009 at 19:16:00 PDT, and the opening bid was $.99. Nothing happened for a few days, and then Ule bid, making himself the high bidder at .99. Remember, eBay uses automatic bidding, so at this point we don’t know Ule’s actual bid, only that eBay used only .99 of it because that’s all that was needed at that particular moment.
The next day, on Wednesday, June 10, Jim bid more than $47, because eBay bumped Ule up to 46, telling us that that was his real bid. Jim is now high at 47. Then Ivan enters the picture, bidding the next day, June 11, bumping Jim off at his maximum of 58.95 and putting Ivan at 59.95. As we’ll find out, Ivan’s actual bid is much higher, but all that’s needed now is the automatic bid of 59.95.
Then several bidders try but are immediately outbid by Ivan’s automatic bids: Xavier at 66, Don at 70, Harry at 121. Then Harry comes back (still on Thursday, June 11, a day earlier than he needed to) with a fresh bid of 151, but again Ivan’s original bid is more, so Ivan is still on top, but now at 153.50. That’s where things were when I wrote yesterday’s blog.
It stayed at 153.50 most of yesterday, the final day, until about 16:40 when Ralph entered the bidding, but he, too, was automatically topped by Ivan, whose original bid must have been fairly high. The price is now at 161.59. Seeing this, Ralph comes back about an hour-and-a-half later, but Ivan’s bid is still too much, and all Ralph accomplishes is to push Ivan to 167.69.
I’m watching this develop, wondering why in the world these guys are bidding at all, since the auction still has over an hour to run. I also realize that probably something over 200 is going to be needed to win, but I still don’t know what Ivan bid, only that it was at least 167.69. Bear in mind that I’m not bidding, just thnking about bidding. That’s a huge difference.
What Ivan doesn’t know is that it’s my Birthday and I decide I’m going to have this camera and I’m going to take my absolute maximum 250 and add 100 to it because it’s my Birthday. This is just me talking to myself. Ivan knows nothing, not even that I exist. (I assume he doesn’t read my blog.)
So, I decide to bid 350, but certainly not on eBay just now, because if I did eBay would immediately enter a bid, and then Ivan would know somebody wants this camera besides Harry. Ivan might increase his bid. Or, maybe he doesn’t have to, but I don’t know that. I only know that Ivan put in a large bid, more than 167.69 the day before. I take heart in the thought that Ivan isn’t a very smart bidder, since no smart bidder bids that early. Or early at all, as I’m about to demonstrate.
I know 350 is my maximum, because if Ivan takes it for that much he is even crazier than I am, and, unbelievable as that is, he then will deserve a Canonflex to ease his pain. The point is that bidders have to have some way to know their maximum.
More activity in the last minute: Mike bids with 51 seconds to go, but Ivan is still on top at 190.50 (Mike bid 188). With 23 seconds to go, Oliver bids 200, pushing Ivan’s to 202.50. Probably not Ivan’s maximum.
OK, now for the fun part. With 8 seconds to go, my bid of 350.25 (I added .25 to break a possible tie) hits eBay, pushing Ivan to 250.50 (he also added a tie-breaker!) and out. (So that’s what he bid.) The camera is mine for 255.50. Not close to 350 at all, as it turned out.
With me bidding at the 8 second mark, if Ivan was even watching, he may not have had time to react. Or, he may have chosen not to. Maybe 250 was more than he really wanted to spend and he was relieved.
But the most important lesson is this: If Ivan had just bid the 250 with a few seconds to go instead of the day before, I wouldn’t have known about him, and the price might have still been in the 100 - 130 range with an hour or so to go. I might have bid 250 or even less, which is what I thought I would do when I blogged Thursday, and Ivan may have won. But, Ivan tipped his hand, I went for 350, and only paid 5.50 above 250.
Every article I’ve read about how to bid on eBay says the same thing: Bid once for the maximum amount you’re willing to pay, and bid as late as possible. The problem with Ralph is that he doesn’t know what he wants to pay. He bids, sees he’s outbid, bids a little more, gets outbid again. Ivan did two of the three things right: He bid once, and he bid for the maximum amount he was willing to pay (I guess), which was 250. But he didn’t do the third thing right, because he bid over a day earlier than he should have. He should have bid in the last minute or, better, in the last 10 seconds.
Mike and Oliver really bid well, although Mike was a bit early.
He presumably wanted to pay only 188 and he bid with 51 seconds to go. He should have waited. Oliver bid what he wanted, 200, with 23 seconds to go. It turned that neither bid was going to work, because Ivan had bid 250 the day before.
But Mike and Oliver didn’t want to pay 250 and they didn’t have to.
I bid more than I really wanted to pay (Birthday, remember),
bid once, bid really late (8 seconds to go), got the camera, and didn’t have to pay very much more than 250 anyway. The price was set not by me, but by Ivan—it’s a second-price auction, recall.
(If you aren’t going to be at your computer when the auction ends or aren’t sure
you’re going to be able to get your bid in in the last 10 seconds, you can use a sniping service such as AuctionSniper.)
Now I’m back to watching a few other auctions that are ending in a few days. The bidding is already underway. I have no idea why.
If I decide to bid, it will be with 8 seconds to go.