Last Second Bidding
Is last second bidding or "Sniping" all you need to know about winning more eBay auctions? The answer is no its not! This is the original Target Price theory written by David Eccles inventor of the Automated eBay Snipe program, a theory now copied and put into some eBay How To Books as was the automated bid software he invented!
If you are unfamiliar with the concept of sniping here is a short explanation:
Bid Sniping is a strategy employed by bidders who place their maximum bid in the final seconds of an auction. Reasons for doing this other then winning the item include avoiding the following examples. ·
Although last second bidding enhances your odds of winning more auctions you should not stop there. When all is said and done it will be your maximum bid amount that will determine your wins and losses. The person that brings the most money to the table will win the auction.
Enter Cricket Target Price Theory
Apply this eBay auction price theory to your bidding strategy and you will win more auctions. You will more and lose less because what you are doing now is separating yourself from average bidders and thinking smarter. We are teaching you how to be a savvy bidder.
If you keep losing items it means that the average person is targeting or establishing a fair market value higher then you. Consistent losses mean that you might be under valuing the item. (Or you are a dealer and must undervalue and hope for the best.)
Lets assume that the item you bid on has a fair market value of $15. This sets a maximum target price of $15. If this is true then you can expect others to think like you are thinking. Working with the law of averages. If 10 people bid on this item and place a target value of $15 on the item most will bid a few pennies to say 50 cents over the target value. In many cases, people will bid an even dollar over. This is smart bidding, but not smart enough to beat the a savvy bidder.
The target price theory says that you are not the only one that is thinking about bidding on an item in demand. The theory says that, somebody is going to think about paying the same amount as you. The theory says that if the latter is true then you must bid in a way that will put the odds of winning in your favor and you do this by applying some simple math to the targeted bid to increase your odds of winning.
Apply The Cricket Target Price Theory ·
Set a target price in your head. $15.00 · Assuming a target price is under $75 to $100.00, add $5 or a few more dollars to your target price. (If $100.00 add $10-$12 etc.) · Split the difference on the $5. This would make $2.50 · Add the $2.50 to your $15.00 target price and you end up with $17.50 The extra $2.50 covers ALL possible minimum bid increments for any other bidder that bids over the $15 target price. Even those bidders that stretch the over bid to say $16.50. For you to win you would pay minimum $17.00. However, you will rarely pay the $17.50 maximum bid in our example.
|You bid $17.50. The next minimum increment on eBay is .50 cents so the only way to beat your hidden proxy $17.50 bid on a $15 targeted price is for somebody else to bid $18.00.|
The Cricket Target Price Theory In Action
What does it mean if you lose the item to an $18.00 bid? You have been simply told the target price was wrong! (At least to somebody else) The target price could be $20. In the final analysis when you lose to a minimum increment, your target price was too low and others have targeted the items value as being highe. This is construed as a fair and square loss because you were not willing or able to target the price higher.
You will win more auctions however because when you apply the Cricket Target Price Theory, you will out bid most anybody that values the item at the same price you do.
Here is why:
On eBay the minimum increments are cast in stone.
Everywhere you see a different bid increment in the table above, consider raising your bid 5, 7, 10 or more dollars then split the difference. When you split the difference, you increase your odds of winning dramatically because few people will bid $2.50 over a fairly targeted $15.00 valued item.
Apply Cricket Target Price Theory
You can use simple math above to derive your maximum Snipe bid or you can use a bit more complicated math to gain an even greater edge at winning.
I want to pay $15 for item X. However, I know that if somebody else bids $15 and if they bid by proxy before I do, there is no way I can win for $15. I multiply 1.39 to the $15 and arrive at $20.85. Why don't I just multiply by 1.19 and avoid the extra step of dividing by 2? The theory says that if I have target the price wrong, I can see more clearly what somebody else might be thinking and determine how much more then $15 to win. I look at the $20.85 figure and decide. No. $20.85 is too high.
What if I said yes. $20.85 is not too high? Really did I just admit that the target price could be $20 understanding that the average bidder does not think in odd numbers but rather in even fives and tens?
Apply the theory to #1 above.
I would pay up to $18 for the item. I have changed the target value.
$3.51 = ($18.00) X .39 / 2
$21.51 = ($18.00 + $3.51)
I set my Snipe bid for $21.51 for my $18 target believing that if somebody else targets the price like me they will probably bid anywhere from $18.00 to $19.50. If they bid the latter it will cost me minimum $19.75 to win my $18.00 item. Even though I am bidding over the $18 figure I said was too high above, the odds are in my favor that I will not pay that much. I am bidding that much to win this auction. I also understand that if I lose to a $18.00 bid, I will probably wish I bid a buck or two more win -- after the fact. If I do lose I will take pleasure in knowing I really made the other bidder pay for taking the item from me.
Apply the theory to #2 above.
No I am not willing to reset the target price to $20.85 and start this whole mess again and push to $25.00 for my $15.00 item. I will go to $27.80 to win.
$4.88 = ($25.00) X .39 / 2
$29.88 = ($25.00 + $4.88)
In the second scenario, nothing changes.
Apply the theory to #3 above.
What part of $15.00 do you not understand? $15.00 is my top limit. ..err. uh.. I want to win though.
$2.95 = ($15.00) X .39 / 2
$17.95 = ($15.00 + $2.95)
Okay.. I'll set my Snipe bid to $17.95. I understand that the naive bidder
will probably bid $15 and a savvy bidder will bid up to $17.25 . But wait, I am
more savvy. I have seen people win bids for 1 penny more! I understand they win
for 1 penny more because they never bid in even change amounts. So I'll set my
Snipe bid to $19.97. Just in case somebody is thinking just like me, I'll show
them I am smarter!
Cricket Target Price Theory Review
Free Software Program!
You like the theory? Download this SavvyBidder program now and use it to calculate what to bid applying the theory!
Happy Sniping from the Cricket Keeper!
Is last second bidding or "Sniping" all you need to know about winning more Ebay auctions?
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