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.""
Ebay knows about this type of fraud and other types and they do very little to combat.
Go to ebay and do a search on 'wholesale list'. You will find people attepting to deceive the buyers, I'll even say that much of this is fraud.
I would bet that among the 'power sellers' (and others) there were organized 'teams' of people that artifically jack up the prices for profit.
Now, if ebay KNEW about these practices and did nothing to stop them, could they be found liable?
I have been a victim of Ebay fraud, complained and heard nothing back. I sucks, but I now expect that from both ebay and paypal.
"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."
What this also does is it keeps people that wish to help fix the problem from doing so. IE, I see an obvious fraud attempt on EBAY and try to contact the people that are about to be screwed. I can't do it.
It could be worse, it could be Monday.
Correct me if I'm wrong, but it doesn't seem to matter all that much if you can't see the identity of the bidder. Isn't it pretty trivial to have some small network of people that agree to shill bid for each other?
Apology to Ubuntu forum.
Only pay what you can afford and what you think something is worth. If a seller out bids you on their own product. Fine, let them keep it.
Personally, I avoid eBay like a plague. it's got sucker written all over it.
Tom
Someday, I'll have a real sig.
As another poster said ebay makes money off ALL auctions. Fraudalent auctions earn ebay the same amount of money as real auctions.
Just remember Ebay is a flea market. The kind most people wouldn't enter if it existed as a real building. Treat going there as such and you won't get burned.
i thought once I was found, but it was only a dream.
I tend to agree with the people saying "Who cares?" about this practice. When placing bids on eBay, you should know from the start how much you're willing to pay for the product you're interested in. If you think "Cool! I'm winning this radio for only $5.00 and it's easily worth $200!" and then the seller enters a number of shill bids, bumping the price up to $150 - fine. He/she is *really* saying "Sorry pal! I'm not letting go of this $200 radio for only $5.00!" Fair enough. The auction hasn't ended yet. The worst he/she really did to you was get your attention with the artificially low starting price and make you think for a little while you were getting a "steal" on the radio.
Now, you have to make a decision. Will you pay a "fair price" for this radio, or will you duck out, saying "Oh well, I don't want one THAT bad. I was just hoping the seller was going to lose his/her ass on the sale." ? It's still completely up to you. And if you bail out, the seller has a real good chance of not getting a buyer at all, causing him/her to pay the listing and re-listing fees for nothing.
Shill bidding or not... the buyer still enters their maximum price that they are willing to pay for that particular item. If you don't want to pay that much, then don't bid that high! The complaints seem a little misplaced to me. Plus, the fact that everybody and their brother uses eBay now doesn't help prices.
How to sell your product for the price you want without paying for reserve pricing or shill bidding:
Set your starting price at what you want to make. Instead of trying to lure in buyers with $1 auctions and a $100 reserve or shilling a $1 auction up to over $100, try just starting the auction at $100. Gee, there's a thought.
120 characters for a sig? That's bloody useless.
Then, why in the world would you (a) bid $100 for it, and then (b) complain when you didn't get outbid?!?!?! In the end, I care. I occasionally buy stuff on eBay, and I want to know I paid the lowest price for what I want to buy. At the very least I want to know that I am not being cheated.
If you really mean this as an example of being cheated, I'd suggest that perhaps you could modify your bid strategy to not include bidding $100 for something worth $50. Not defending shill bidders, don't get me wrong, I'm just saying do your research of what something is worth before you set the number, _or_, overbid and know you're going to be highest. But don't complain about it if you use the latter approach.
The problem with shill bids is that there's no similar recourse for the buyer. If the buyer's bid is a contract, then why shouldn't the seller's offer to agree to the honest outcome of the auction also be a contract?
eBay's listing fees mean you pay more to list an item with a higher starting price. Simply put, it costs the seller more to have $100 auctions than $1 auctions. Same thing with reserve auctions, the seller pays for the privilege.
In a very real sense, eBay is encouraging shill bidders with their listing fees. They'd be gone overnight if listing fees were the same irrespective of the auction start value. After all, eBay is still getting their ending value fees.
That's a ridiculous argument. If a kid is going to bully someone into bidding on an eBay item, they're just as likely to bully them for any other reason. Bullies actually existed long before eBay.
The point is not that people pay more than they're willing to pay, it's that they pay more than the legitimate auction price. Any way you look at it, it's fraud. The bidder is offering to pay up to $X to defeat honest competition, but the rules say that he pays less if there are no competing bids. If the seller just pushes that up to his limit, he's breaking the rules under which that offer was made. It breaks the system.
That's not to say it would be wrong to implement a straight bidding system where an offer of $100 is an offer of $100. But that's not the system that's being used, so shilling is fraud and tantamount to theft of the difference between the price due to legitimate bid competition and the shilled-up selling price.
It's one thing to ask someone what they're willing to pay and then sell them at that price and another to fraudulently force that selling price by violating the rules under which an offer is made. eBay has means to ensure that you don't have to sell your item at a loss, so I have no sympathy for the argument that these sellers are merely protecting themselves when they need to get a certain amount.
There are many reasons why it's desirable to list a low-starting bid, no-reserve auction. These are attractive to bidders because they have the potential to be a really good deal. If you want this sort of attraction to your auction, then you have to accept the risk that you'll give away a few good deals if there's not the market you were hoping for. Cheating to eliminate that risk is fraud, plain and simple. Even if no one pays more than they were WILLING to pay, they pay more than they SHOULD have paid, according to the rules of the market.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
The fixing auctions, with shill bidders on the other hand, isn't as bad in my book. Just don't pay more than you want to pay for it. This is the sellers way of saying they don't want to sell it for less. Getting "caught up" in an auction for a common item is just dumb.
Just stick to the fixed price items, or just set your bid once (at the price want to pay for it) for the item you want. If you're bidding multiple times on an item, you're caught up in the game and have a problem.
-- these are only opinions and they might not be mine.
How is sniping being an asshole? I'm under no obligation to fork over as much money as a seller is willing to take. Nor am I under any obligation to get into a bidding war with some fanatic to whom winning the auction (at any price) is more important than obtaining the item.
Sure ebay isn't a brick'n'mortar auction house, and it has a different set of rules. So what? In the real world, people don't always pay the asking price --- they are free to haggle in an attempt to bring the price down. Is that also being an asshole? That's the way the market works --- the seller wants to maximize the selling price, and the buyer wants to minimize it. You understand the framework. My advice: If you are a buyer intent on winning, put in a high bid, or snipe it yourself. If you are a seller, set a reserve price. If you don't like the game, don't play.
Sure it's easy enough to justify the action of sniping, just like paying some kid for his spot in line to get a playstation, 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. I'm not sure if it's just laziness on the part of programmers at eBay, but I imagine they could gleam a better profit margin by emulating certain aspects of the time tested traditional auction format where bidding is extended upon attempted sniping.
In an ideal world, sniping should have absolutely no effect on the outcome of an auction. It shouldn't matter whether you put your bid in one second after the auction opens or one second before the auction ends, the winner will always be the highest bidder, sniper or not. Unfortunately, eBay is infested with morons. These morons think that they need to bid the minimum each time, like they do in the auction houses they've seen in old sitcoms. When they see that they've been outbid, they bid another dollar, then another, and another... In the span of thirty seconds, they'll place a dozen bids or more, each just a dollar higher than the last, not stopping until they have the high bid (regardless of what the item is actually worth). Considering that you are supposed to bid the maximum you are willing to pay, this behavior makes no sense; if the price you are willing to pay fluctuates that quickly, you should be too stupid to use a computer (unfortunately, this never seems to be the case...).
This problem is easily avoided by not signaling your intent to bid on the item until it is too late for the morons to place more clueless bids. You aren't cheating anyone, you are just holding the morons to their initial bids. People only have a problem with sniping when they think "I would have been willing to pay that price." They'll keep thinking, "It's just another dollar..." even though the fact is, someone was willing to pay more; the high bid is all that matters. If you can't make up your damn mind, you shouldn't be bidding at all.
Snipers do nothing illegal, immoral, unfair, unkind, rude, or unexpected. They place bids, just like everyone else on eBay. Sometimes they win the item, sometimes they don't (and many times they will pass on bidding on an item entirely because the price in the last few seconds is higher than they are willing to pay). Sniping actually forces a handicap on the bidder; by sniping, the bidder has only one chance to place a bid, and even then only if there are no technical issues that prevent the bid from being placed in time.
As for the idea of extending auctions when late bids are placed, that's just idiotic. In most cases you have 5 or 7 days to place a bid. If you can't figure out what you are willing to pay in a week, what good will another 15 minutes do? All I can see is that you might get swept up in the heat of the moment and bid way too much, raising prices for other bidders and giving the sellers the pleasure of trying to collect money from people who are incapable of making decisions - and driving an increasing number of users to alternatives that don't play stupid games with the auction's end time.
I have a solution for all of you who whine about snipers. It is really simple, 100 percent effective, and completely free. Bid more than you are willing to pay. That's it. If you get outbid, it's no big deal, because you never wanted to pay that much in the first place. If you win at your high bid, you may have spent too much, but you get that joy of winning that you seem so concerned about. Best of all, it requires no changes to anything else, so it couldn't be easier to implement.
Yeah, you went for Funny and you got it, but I really can't see the problem here, so please help me out.
I'm bidding on something and I get outbid, let's say the seller himself outbid me. I decide to go somewhere else. The seller is now stuck with the item and he still has to pay eBay their cut. He took a risk; it's a game and he lost. Or the buyer might decide to bid again if he feels that it's still a good deal.
What does it matter who bid before you? It doesn't. You look at the highest bid and then you ask yourself whether you'll pay more than that or not. It doesn't matter if there are 0 or 100 bids on the auction and if all bids are by different people or they're all by the seller. Just look at the highest bid, ask yourself whether you will bid or not, it's so simple.
I don't even see what fraud has to do with a seller bidding on his own auctions and I would hate to try to explain it to the police:
Me: "I think I got ripped off!"
Police officer: "OK, what happened?"
Me: "Well, I bought a shirt for $20 on eBay!"
Police officer: "Ah, and you never received it?"
Me: "Yes, I did!"
Police officer: "Ah, and the shirt turned out to be a knockoff?"
Me: "Nono, it's real, I'm very happy with it!"
Police officer: "So what happened?"
Me: "Well, I saw the shirt, it said $19 and that's cheap, so I bid $20 and won!"
Police officer: "So you saw something you liked, thought it was cheap and bought it. Where's the problem?"
Me: "Well, I suspect that someone else had bid on it before me, possibly even the seller!"
Police officer: "And this is a problem because...?"
And I would have NO idea what to say to that.
I realize it's very hard to catch people doing this if they take their precautions, but I don't even see what they're doing wrong. If someone wants to spend all his time outbidding his customers on his own auctions, thereby making no money and then paying eBay a percentage of every single non-existent sale, then I think we should just let him. I simply don't see what this has to do with fraud.