Slashdot Mirror
How eBay Sellers Fix Auctions
Boj writes "The Times online is carrying stories on fraud carried out on eBay using shill bidding. Citing eBay's changes to security as aiding the shill bidders and this fraud:
"Last November eBay changed its rules to conceal bidders' identity — making it even more difficult for customers to see whether sellers are bidding on their own lots.""
Then what the seller does is send you a "second chance" email if you are the last bidder saying that the original bidder didn't pay or what not and lets you pay what they were offering for the item. The Second Chance is now an offical Ebay thing... which of course is being abused by the Shrills...
Because you can look at the user feedback and see if there is a lot of cross-feed-backing going on between the involved parties and also you can see if these are low-feedback users raising the bid.
;-)
I had this happening to me once. I'd put in a bid and then somebody would raise it and raise it again until just topping my bid, then withdraw the highest bid. Complained to EBay but they did nothing. In the end, I waited a while after the shill's last bid, then put in a bid of my own. The shill really quickly raised it again a few times then withdrew his last bid that topped mine. At which point, I withdrew my last bid and left the shill in the winning position with a few seconds to go and a bid that was too old to withdraw. So he ended up paying EBay for the privilege of selling the item to himself
----------------------------------- My Other Sig Is Hilarious -----------------------------------
Personally, I avoid eBay like a plague. it's got sucker written all over it.
Well, that may be. But they stay in business for a reason. If I have something to sell, I can reach a larger market than I can locally. And when I'm looking for some uber rare item that it would take years and thousands of dollars in gasoline to find by scouring every used record store, book store, person's home, etc., ebay comes in very handy.
I've only been burned a couple of times (out of several hundred transactions) and then only for low value items.
My own personal strategies for a succesful transaction include:
1) Never bid on camcorders, computers, automobiles, or any other high dollar item.
2) Always do an extensive check of the seller's feedback.
3) Don't bid early or get involved in bidding wars. Snipe instead.
I see all kinds of accusatory posts which I would have to disagree with. I've been a long time eBay user and that's mostly as a seller (a silver powerseller for a chunk of it). Now I never participated in shill bidding and would even ban friends of mine from bidding on my auctions. Occasionally I'd shoot them a link to just show them what I had posted and they'd bid on it (usually to get it started) thinking they'd be doing me a favor. For example, if I was selling a $500 monitor they might have bid $40 or something. However, I want absolutely nothing to do with this and I will add their user IDs to be banned from bidding on my auctions the second I see this.
Why? Because I have seen/spoke with people that took part in shill bidding. This will include people that just did it every few auctions and were Gold Powersellers, with well over 1000 positive feedback. Guess what happened to them? Two different things - automatic account termination and/or warnings. I've seen a huge seller (makes $$ for eBay you know) have their account closed, no questions asked. This (AFAIK) was not as a result of a complaint either. We're not talking these retards that bid up the auction and then cancel once they see what the first place bidder's amount was.
Anyway, I would say eBay does a good deal to try and stop this practice. So I'd ask that some people not post unless they know what they're talking about. It seems like a lot of people are talking out of their asses. It can be difficult to catch everything on a site that busy. Why don't you just go solve the problem for them instead of posting useless bullshit here.
Imagine your wife's grandma's heirloom china set is worth $400 on the market, but priceless to her. You have recently dropped one plate, and it's irreplaceable. The plate is worth $80 on the market. 6 months later, you see the plate on Ebay, drawing insipid bidding, reflecting relatively low demand, stuck at $40. Your web design business has been doing well, and you can afford $200 to get back in grace with your wife. You therefore bid $200, raising the current bid to $42. On the final day, you see a series of bids in , all by the same person, raising the price to $160. This is the point at which the shiller did not dare to raise the bid for fear of outbidding you.
Effectively, he got free information about how much you are willing to bid. Information is money. It's like when you're bargaining on a used care--you start with your offer. You don't tell the salesman how much money you brought, and then start bargaining.
In the example above, you pay less than the item is worth TO YOU, but more than market, because the shiller was able to tease that info out of you.
Hidden referrals are weak.
I think there is a world market for maybe five personal web logs.
No.
In economics, there is a long established and useful concept called consumer surplus. It is based on the fact that some consumers value an item at much higher than the going rate, but that their number is small enough that it would not be in the seller's interest to sell a smaller quantity at a higher price.
For example, say that I am extremely hungry and have a class in 10 minutes. I might be willing to pay $5 for a slice of pizza at the cafeteria nearest to my classroom, due to reasons of both timing and hunger. However, since the cafeteria can't read people's minds, and because of various local trade laws and issues of practicality, they must charge the same price to everyone. Say that the optimal price based on average demand and the cost of supplying pizza, both in labor and materials, is $1.50. So I buy a slice for $1.50 and I am left with a consumer surplus of $3.50.
This example is to say that people often value an item above the market clearing price (or below it, in which case they don't buy), and that the fraud being committed is fraud, because it artificially inflates the market price with bids of buyers who do not intend to pay, and who are in collusion with the seller.
In our pizza example, if a store employee out of uniform had stood next to me and tried to outbid me on pizza, until my reservation price ($5) was reached, that would be fraud. When someone misrepresents themself in a commercial transaction, it is fraud. All the bidders are transactors in an auction, not just the winner.
This sig has not been evaluated by the FDA. It is not designed to diagnose, treat, prevent, or cure any disease.
but it's still an asshole move most often capitalized upon by people with less active lives that have time resources to snipe in whenever their auction of interest happens to be ending.
Here:
http://www.jbidwatcher.com/
Now you too can snipe w/out having to sacrifice your active lifestyle.
Just configure it with the auction number to snipe - the amount you want to snipe - and go on with life.
First they burn books, then they burn people.
It is against the ebay rules. And if you're in a situation where it seems apparent that it might be happening, they have submission form in their documentation specifically for shilling complaints. And in fact, they do enforce the policy in my experience.
/not/ illegal, and they get a larger cut for auctions configured for reserves. Simply setting a reserve guarantees that ebay will receive no less than 1% of the reserve price (and substantially more for items less than about $150). If they allow shill bidding to take place, they lose money. For example, suppose you have a playstation 3 you want to sell and you don't want to let it go for less than $850. If you start the auction at $850, you pay $4.80 to insert it. If you start the bidding at less than a dollar, you take the risk of not meeting your final price, but the insertion fee is cut to only 20 cents. If you start bidding under a dollar and place an $850 reserve, it's %8.70 to start the auction. In each case, closing costs would be 3% of the winning bid plus 56 cents (since it's 5.25% on the first $25). So in this example, if a shiller were to start bidding under a dollar with no reserve, they would have to push the price up to about $1000 or $1130 for the closing fees to match the higher starting bid and reserve situations above, respectively. And the lower the final price, the bigger the difference is in the fees. In the case of an item with a 49.99 reserve selling for $50, the same item would have to sell for $83 without a reserve to generate the same fee. While it is possible that they could make more money by looking the other way for shills, there's a strong chance they'll alienate their users with high prices and frustrating auctions, face legal action if it can be shown that they looked the other way, and in all likelihood make less money than if they were to do the job themselves with reserve prices. Behold the almighty dollar.
I took part in an auction a few months ago which seemed to me to be a clear cut case of shilling. I put a low-ball bid in on a video game, got outbid, and came back the next day (after purchasing it elsewhere) to find that the winning bid that outbid mine had been cancelled but that my bid had been extended to its very top value (I think it was at $1 when I first took the top spot and I'd only offered up to $2). So before paying, I inquired with the seller as to why the other bidder's bid had been retracted. I made no statement toward either having bought the item elsewhere or toward ebay's narrow criteria for allowing retractions. I simply asked why it happened, and the reply to me was something like "Well if you don't want to pay, you should have said something sooner" or some similar BS. So then I wrote a message to the shill bidding department asking for advice of how I should proceed since, as far as I could tell, the anomolous bidding had disrupted the integrity of the auction. A few days later, I recieved an email from their loss prevention department stating hat the seller's account had been terminated and that I should not pay for the auction, as well as informing me of a few options for how I could get a refund if I had already paid. My only complaint about the process is that the form letter said I would be informed of the results of their investigation in 24-48 hours, but it was more like 72.
But anyway, there's are two strong motivations for ebay to enforce a strict anti-shilling policy: first, it's illegal in many places. Second, and more importantly, is that setting a reserve price is
Ebay only pushes your bid up to the reserve if your maximum is over the reserve. If your bid is below the reserve it allows it to stay at the starting price (or does the normal bidding war between you and the other seller).
Paul