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Seller bumps.
lilguy
Member Posts: 12 ✭✭
Is there any way to watch for sellers bumping up the bid on an item?
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Is there any way to watch for sellers bumping up the bid on an item?
If a seller wants a particular minimum price for their item, they are supposed to set a "reserve" price, or start it at a minimum price.
Sellers can't bid directly on their own auctions, but they can do it with proxy accounts or have friends or relatives do it. That's called "shill" bidding, the "shill" being a phoney bidder who isn't really interested in winning the auction.
This isn't easy to spot. The only way to know for sure is to spot an unusual pattern of the same bidder bidding on multiple auctions from the same seller.
Even that doesn't necessarily prove anything since one bidder can normally bid on multiple auctions from the same seller. For example, lots of bidders here (myself included) bid frequently on auctions by "Locust Fork", a friendly dealer who likes to announce her one-cent no-reserve auctions on the general discussion board.
Also, there is nothing intrinsically wrong with having friends or family members bid on a particular item, so long as they actually willing to pay if they win. If the person bidding is willing to follow through with buying, then the bid is real, and its not a shill bid.
A particularly bad red flag would be a seller relisting items for sale supposedly won by a previous bidder, then allowing that bidder to bid on different items (or even worse, the same item again).
Another red flag would be the same bidder bidding ONLY and ALWAYS on one persons auctions. A bidder having multiple completed auctions without any seller feedback would be another red flag.
The auction site claims to have procedures in place to watch for shill bidding, but needless to say, it won't give the details. Obviously, shill bidding is explicitly prohibited by the rules on EVERY auction site including Gunbroker, since the practice undermines confidence in the market.
While I have absolutely no doubt that shill bidding happens here from time to time (it happens everywhere auctions are conducted), I don't think its all that common, and I can't say I've personally been involved in an auction where I thought it was happening.
In general, shill bidding can help a seller some of the time, if its a non-competitive auction. IE, it can help prevent someone from walking away with a "steal" if there are few bidders. It can also help extract more money from someone who seems absolutely committed to buy a particular item (EG at any price).
But as price-fixers often find out, its actually fairly tough to outsmart the free market. In any sort of competitive auction, or even in some non-competitive ones, a shill bidder may just find that they've outbid the market and cost themselves a sale.
As the saying goes, you can't cheat an honest man. If you are bidding close to what something is actually worth, you can't be hurt too badly by a shill bidder. If you aren't bidding near what something is worth, you probably can't reasonably expect to win the auction.
quote:Originally posted by lilguy
Is there any way to watch for sellers bumping up the bid on an item?
If a seller wants a particular minimum price for their item, they are supposed to set a "reserve" price, or start it at a minimum price.
Sellers can't bid directly on their own auctions, but they can do it with proxy accounts or have friends or relatives do it. That's called "shill" bidding, the "shill" being a phoney bidder who isn't really interested in winning the auction.
This isn't easy to spot. The only way to know for sure is to spot an unusual pattern of the same bidder bidding on multiple auctions from the same seller.
Even that doesn't necessarily prove anything since one bidder can normally bid on multiple auctions from the same seller. For example, lots of bidders here (myself included) bid frequently on auctions by "Locust Fork", a friendly dealer who likes to announce her one-cent no-reserve auctions on the general discussion board.
Also, there is nothing intrinsically wrong with having friends or family members bid on a particular item, so long as they actually willing to pay if they win. If the person bidding is willing to follow through with buying, then the bid is real, and its not a shill bid.
A particularly bad red flag would be a seller relisting items for sale supposedly won by a previous bidder, then allowing that bidder to bid on different items (or even worse, the same item again).
Another red flag would be the same bidder bidding ONLY and ALWAYS on one persons auctions. A bidder having multiple completed auctions without any seller feedback would be another red flag.
The auction site claims to have procedures in place to watch for shill bidding, but needless to say, it won't give the details. Obviously, shill bidding is explicitly prohibited by the rules on EVERY auction site including Gunbroker, since the practice undermines confidence in the market.
While I have absolutely no doubt that shill bidding happens here from time to time (it happens everywhere auctions are conducted), I don't think its all that common, and I can't say I've personally been involved in an auction where I thought it was happening.
In general, shill bidding can help a seller some of the time, if its a non-competitive auction. IE, it can help prevent someone from walking away with a "steal" if there are few bidders. It can also help extract more money from someone who seems absolutely committed to buy a particular item (EG at any price).
But as price-fixers often find out, its actually fairly tough to outsmart the free market. In any sort of competitive auction, or even in some non-competitive ones, a shill bidder may just find that they've outbid the market and cost themselves a sale.
As the saying goes, you can't cheat an honest man. If you are bidding close to what something is actually worth, you can't be hurt too badly by a shill bidder. If you aren't bidding near what something is worth, you probably can't reasonably expect to win the auction.
Well, thats what I was going to say..[:)],,nambu
But, the bottom line should be ---- know the maximum you are willing to pay, & don't get emotional & pay more just because you want to "win".
Neal