Bearfruit

On ebay, a “snipe” is when someone bids on an auction at the very last second. Maybe you’ve experienced this when you bid on something and thought it was in the bag and then refreshed the auction page expecting to see a “Congratulations, you won” message but instead saw, “This auction has ended, sorry, you didn’t win.” It’s frustrating and disappointing and your first response is, “I hate it when that happens!” But really, snipping isn’t a bad thing.

My rule of thumb when bidding is to decide how much I’m willing to pay for an item and don’t pay a penny more than that. I saw a cell phone that you can buy new for $140 go for more than that recently because of last minute bidding. How foolish! You see, as the auction nears its end, people start getting emotional and will start increasing their bid, in many cases paying more than they should. The sellers love this, there’s nothing more exciting as a seller than seeing a last-minute bidding war for your item.

As a consumer you should not get emotional or you’ll spend too much money. If we all followed this rule then snipping would be useless. We’d all just decide how much we want to spend and bid the appropriate amount and the auction would end with the highest bidder getting the item. So if you want to pay $60 for that item, bid $60 initially, if you want to bid $70, decide it up front and bid it. If you don’t win, oh well, there will be another one in a day or two.

But we don’t do that… ebay (and auctions in general) trick us. It looks like we were outbid by only $1 so we increase our bid by a bit, then the other person’s bid increases by $1 more than ours, so we think, ok, its not much, just one more time… so you bid a little bit more and now you’re the winner. The other person then goes through this same process and it repeats itself a couple times and the end result is we pay too much.

So assuming that your initial bid is truly what you wanted to pay, then a sniper will come in and bid at the last second, circumventing the bidding war. Either the sniper will bid more than you and win, or less than you and lose. Both buyers come out ahead because no one has time to make emotionally motivated bids.