Shill Bidding on eBay: A Case Study
 

For anyone that is interested, a detailed case study of an instance of blatant shill bidding on eBay, and a detailed comment on eBay’s disingenuous attitude thereto, at http://www.auctionbytes.com/forum/ph...ic.php?t=24033

This is why I always snipe whenever I bid on Ebay. Takes more time, but its pretty effective.

Here's the thing about eBay, or any other auction for that matter. Decide what you want to pay for an item. Bid that amount. If you get it for less, good for you.

Easy, peasy, lemon squeezy.

True enough, but try to place that one bid as late as possible. Early bids can stimulate more bids. That IS part of what shill bidding is all about, anyway, getting the bidding stimulated. I watch an item. If it goes higher than what I want to pay, well, it goes. If it is still within my price range, near the end, I snipe, and I don't do it with any special hardware or software. I enter my bid as late as practicable with my schedule, and if I have the free time, I wait until less than 20 seconds remain.

Sure, but one way to decide what I want to pay for an item is to see how much others want to pay for the item. That way, assuming it was an item that garnered lots of interest and spirited bidding, I'm confident that if I decide to resell the item, I can sell it for close to what I paid for it. So it doesn't really matter what I paid the first time around. So I wait and watch and then make my decision at the end on how much I'll pay and then it becomes a strategy of simply not provoking the current bidders to up their bids - i.e. put your bid in at the last second where they can't respond.

Shilling is common practice, especially on bike parts. I estimate half of all auctions are shilled. On popular items, like Thomson seatposts, for example, it's more like 90%.

Ebay is a big part of the problem. They don't really try to stop shilling, and in fact they profit significantly from the practice (higher price yields higher fee).

I'm moving this from Advocacy & Safety to General cycling (since bike parts were mentioned). Carry on...

--J, a Forum Mod

True, there is an amount of money you won't go over, but it is still true that you would prefer to spend less than that amount if possible. If you bid your max before the end, then you run the very possible chance that your bid will prompt others to push it up. These others may be shills. Or they may be newbs who bid like fools. In any case, it is just naive to think that Ebay is like a normal auction with the normal strategies.

Decide what you the item is worth to you, and then make that bid in the last 1 second of the auction.

jim

FWIW, I have bid multiple stuff in small increments on stuff I was lukewarm about. My thinking that's worth 30, ok 31, ok 32, ok 33, up to 45, then I say wow I 'm glad I did not win that.

BTW, you can cancel a bid, see their rules page for exact details.

This "shill" stuff is simply irrelevant. Never bid with more than 5 seconds left. Any earlier than that simply invites people to bid against you and drive the price up for everyone. Wait until the 5 second window and bid your limit. If you lose, move on. There are only two exceptions that I know of: a) if you think an early minimum bid can scare other lurkers off and don't plant to bid above the minimum in any case or b) to prevent a buy-it-now option.

Hi bkrownd

Of course your comment is spot on; I use a sniping program to protect myself from shill bidding.

The point of my case study, however, is to simply make it clear to anyone who may believe eBay's spin, that eBay is protecting buyers from shill bidding. In respect to such protection, if you use eBay the way eBay wants you to use eBay, then there is effectively no protection at all, and eBay knows it ...

My case study was simply a way of, in detail, peeling away the eBay spin and exposing them as the unprincipled, unscrupulous, disingenuous organisation that they in reality are.

ah, gotcha

You're terribly mistaken.

Shilling drives the price of the item way up above where it would normally sell. If you buy the item with a snipe bid or otherwise, then you've paid too much.

Clearly the item could have been sniped for less is the seller wasn't constantly raising his asking price through shilling.

Shilling is thus totally relevant to the fairness of the deal - it is the snipe bid at the end that's irrelevant. Sniping only helps you if it's a fair, un-shilled auction.

One of the points that I make in my case study is that if you use eBay's so-called “proxy” system (aka "eBay’s shillers' aid") to lodge a maximum bid early in the life of the auction then you are indeed asking to be shill bid up to that maximum if you are unlucky enough to be dealing with an unscrupulous seller.

Did anyone ever take eBay seriously?

I agree with the PO that ebay is complicit. Unfortunately, I have been shilled (blatant and agreed as such by ebay investigator) and seen first hand how little ebay does to the shilling seller. They go on happily shilling.

I've never used the proxy bid system for that exact reason.

I snipe my bids with <30secs remaining. Obviously there's no reason to bid earlier and potentially drive up your price.

You're exactly right - the proxy bid system invites unscrupulous sellers to shill. IMO unscrupulous sellers on ebay are approaching a majority. The only ones you can trust are high volume sellers who list their items as BIN, which isn't an auction and largely precludes the chance of "getting a deal" in the first place. Most of the BIN sellers list their goods at prices higher than those you can find from normal etailers by googling for 2 minutes. They have to to recover Ebay's fees.

Unregulated shill bidding basically forces a lot of otherwise honest sellers to "join the game". You can't get buyers to look at your $65 NIB Thomson seatpost (an example of a fair deal) when most all their competition is listing them at 99 cents. So, one bad apple ruins the whole online auction apple barrel.

The only improvement I've seen in years at Ebay are changes to feedback, some of which have probably improved the accuracy of buyers' ratings. Feedback from sellers is unneccesary - either the seller gets paid or he doesn't. If a buyer doesn't pay he should be suspended or banned from that point forward. I've noticed many sellers have stopped giving feedback altogether.

The buyer takes all the risk in this process, and ebay reaps most of the rewards.

Wordbiker - Unfortunately a great number of folks lack the savvy to know when they're being ripped off. Youth and seniors are especially susceptible to these schemes. You can't depend on "gubberment" to regulate any of these large corps for the most part. The only thing that keeps them in line is major litigation, which is economically prohibitive for the common man.

Years ago I noticed a video game seller on Ebay who had a repeat customer (hundreds of auction wins) by looking at their feedback. The hundreds of "wins" were very obviously the result of shilling too high and the shill winning the auction. I reported it to Ebay and the shilling seemed to have stopped with that ID. Of course another could have been created to do the very same thing.

Do you have an executive summery of the major update?

Sorry, no, and I do appreciate it is a bit long winded but I do try to dot every "i" and cross every "t"; otherwise people come back as tell me "but that is not what eBay says ..."

Well considering that you just post here to flog your 'I hate e-bay' page maybe you should consider it....

I snipe everything on eBay. I rarely lose too. I have gotten a truck bed cover that sells BIN for about 585 for 384 delivered. Got some obselete floor mats that had gone as high as 250.00 for 70 bucks delivered. Got a truck bed extender NIB retail of 350.00 for 90.00. Latest was a set of new old stock obselete headlights. Easily worth 300 dollars each. I paid 120 each.

eBay is great if you know how to use it. Bidding early on with your max price is foolish. An auction is won in the last 30 seconds. Entering your max bid with 3 days of bidding left is asking to pay more. Let it sit and bid late.

Sniping doesn't really protect you against shill bids. But it's still certainly the right way to do things -- if you bid early, your bid itself will prompt others to bid more, which ultimately leads either you to paying more (if you win) or losing (if somebody ultimately bids more than you.)

If you're serious about bidding on eBay, get a sniper program. You don't want to bid in the literal last second, but the last 5-10 seconds works nicely. But without a program, it's too easy to forget to bid, and really, they aren't hard to use.

I don't completely agree. Buyers can pay, then claim the item was never shipped or never arrived (if it's not properly tracked), or wasn't what was advertised, or swap it with their already owned broken one and say it arrived broken. Sometimes scammers will even take advantage of loopholes in Paypals or eBay's policies to charge back the seller's account with little recourse because the seller did something that the buyer asked them to do that seemed reasonable but violated Paypal's/eBay's policies. I've heard of several cases where that happened -- the seller knew exactly what they were doing, but Paypal wouldn't do anything about it.

Though in most cases, when sellers give negative feedback to a buyer it's bogus, so removing that probably made sense. It's not perfect, however.

Ultimately, I prefer not to do eBay much. The local monthly bike swap meet -- THAT's where the deals are.

Heh. The thread isn't in A&S anymore :) I don't think that word gets much use outside of traffic laws and A&S ...

Sniping is optimal, but go to your max with your last bid. E.g. if you are willing to pay $1,500 for an '09 Scott Addict frame set, don't bid $1,350 with 5 seconds left and lose the auction at $1,375. Also, if the auction starts high, for example $799 for a set of Bontrager XXX tubulars and $799 seems reasonable, but you don't want to go any higher, be the first bidder and just hang-out. Some people might be scared away at the initial high bid and you end up getting the wheel set.

... but if you make this bid in the last few seconds, and make it your only bid, this increases your odds of 1) winning and 2) getting it cheaper if you do win over if you bid the same amount earlier. Sniping is optional, but it DOES increase your odds of winning and winning for less money. (Unless you forget to bid entirely or screw it up somehow, of course, but a sniping program will help with that.)

Another piece of advice -- don't bid an even amount. Instead, take an even amount, and add a bit more. Don't bid $150 -- bid $151.12. If two bids are equal, the earlier bid wins. So if you snipe at $150 and there was already a $150 bid -- you lost. And they might have actually followed the same rule, and bid $151, hence the extra few cents ...

Hi PowerPuff,

No, No, No, never make a serious bid early; the system is far to open to abuse; make a nominal tactical bid by all means, but otherwise always save your big gun strategy for a last moment snipe; that's the only way to protect yourself from the unscrupulous shill-bidding vendors (and other naive nibble-bidding buyers). If you are a keen eBayer, as I am, and you don't have the time to snipe manually, get a sniping program.