How Bidding Works
There are a number of differences between how bidding works in Internet auctions and a conventional auction house.
- As there is no auctioneer driving the auction and able to end the auction when there is
only one bidder left, online auctions run for a fixed duration, which is typically 3 to 10 days.
- On most Internet auction sites the time that the auction ends is fixed. You will find
occasional exceptions where a bid in the last few minutes of the auction will extend the
auctions end time by an extra few minutes, to give other bidders a chance to make their own counter bids.
- Depending upon the items current price there will be a standard set of Bid Increments, which will
typically be a few pence at low prices climbing to tens and hundreds of pounds at higher prices.
(In the example below I am using an increment of approximately 10%).
- As an Internet auction may not end for a number of days and to save bidders having to keep
logging in to place new bids when another bidder out bids them Internet auctions accept a Proxy
or Maximum Bid.
When you place your bid it is compared to the current winners remembered, proxy, bid and
the outcome will depend on its value.
i.e. you find an item you are interested in.
The current price is £1.
The Lowest you can bid is £1.10.
You decide that £5 is the most you are willing to offer.
You place your £5, proxy, bid.
- Their bid was £1.
They did not use a proxy. You become the current winner of the item.
Current price is shown as £1.10.
The minimum bid is shown as £1.20.
Your proxy of £5 is being remembered.
- Their bid was significantly lower then yours, say £3.00.
You win the item and the current price is now a bid increment above their proxy.
Current price is shown as £3.30.
The minimum bid is now £3.60.
Your proxy of £5 is being remembered.
- Their bid was a little lower then yours, say £4.80.
You win the item and the current price is now shown as the value of your bid
because the full bid increment above their proxy is more then you offered.
Current price is shown as £5.
Minimum bid is now £5.50.
Next bidder will win item from you.
- Their bid was a £5.
When your new bid matches the current winners proxy they stay as the winner
because they placed their bid first.
Current price is shown as £5.
Minimum bid is now £5.50.
Next bid will win item.
- Their bid was less then a bid increment above your bid. Say £5.10.
They are still the winner. The current price is shown at the value of their proxy as
a full increment above your bid is more then their proxy.
Current price is shown as £5.10
Minimum bid is now £5.60.
Next bid will win item.
- Their bid was more then a bid increment above your bid. Say £10.
They are still the winner. The current price is shown as a bid increment above
your bid.
Current price is shown as £5.50
Minimum bid is now £6.
Their proxy of £10 is still being remembered.
- Many people place bids in rounded values. Rather then using rounded bids, try adding
a few pence to your small bids or a few pounds & pence to larger bids. This way your
bid has less chance of being the same as the current winners proxy.
- While it is possible to keep coming back to place new bids during the course of the auction it
makes better
sense to decide your maximum bid, place it and leave the auction to run its course.
Should you lose the item to another bidder do not be tempted to place new higher bids.
- When working out your maximum bid you should factor in the other costs involved like the
postage, handling charges etc.
- Newer, inexperienced, bidders often lose out as they do not understand / trust the proxy bidding
process and just bid the next bid increment.
- A popular time to place a bid is in the last few moments before the auction ends.
This is called Sniping
and has the advantage that if the sniped bid
wins the item, no one else has a chance respond before the auction ends.
For a snipe to be most effective it will be made only seconds before the auction ends.
- If you are winning an auction and are out bid it is not wise to start bidding on
other similar items until the first auction has ended, as it is possible that the winning bid
might be cancelled, or retracted, leaving you as the winner of both items.
(Remember your bid is a binding contract and failure to pay for your winnings can lead to your being
thrown out of the auction site).
Bid
Once,
Bid
Last,
Bid
Your
Max
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