This instructable will show you how to:
1. Research your item
2. Set a benchmark for your price
3. Characterize listings that sell on the cheap
4. Find fluke listings
5. Determine scam listings from real listings
6. Bid aggressively
Step 1: Research
1. Know what you want to buy
I am an amateur audiophile - I loooove speakers. Before I had acquired what I now know about speakers, the following event took place:
One day I was browsing around Ebay, and came across this intriguing pair of speakers made by this company "DaVinci". They looked incredible, were being sold at around $1000 each, and if the technical specifications were right, would have made a fantastic, bargain home theater component. So what was the problem with this scenario? Simple: DaVinci speakers do not exist.
Sure, they exist materially, and by that I mean that somewhere, someone owns the speakers that are pictured in the Ebay listing, and that person is willing to sell me those speakers for the price shown. However, the branding, DaVinci, that does NOT exist. No major retailers sell DaVinci branded products, nor does DaVinci have a website telling you about their speakers. As a matter of fact, there are only three places you can actually purchase these speakers: Ebay, direct from China through an import/export website like Alibaba.com, or out of a white van (get on Google and search for "white van scam"). In short, the listing was a hoax, the speakers were fake, and if I hadn't done my research, I could have gotten sucker-punched into buying a bunch of overpriced crap from some dude who lives in Malaysia.
What was the point of this vignette? In most instances (this excludes things like antiques or collectibles), Ebay is absolutely the last place that you want to be searching for that hard-to-find, diamond-in-the-rough type deal. For something like speakers or mainstream technology, if you can't buy it in the store, you probably shouldn't buy it on Ebay either. By knowing what you want to buy up-front, you'll preclude yourself from being influenced by the extravagance found in most listings and will be able to discriminate between fact and fiction.
2. Know the market price and set a comfortable budget
Once you have decided what you are going to buy, it is important to know the market price. By knowing the market price, you will be able to more accurately characterize your budget for the purchase, which will ultimately lead you to get a better price. Knowing the market price can be a little tricky for things that are rare, but for most things, determining a good base-line is very easy, and it doesn't start on Ebay.
One of the biggest mistakes many people make is assuming that Ebay will always have the best price, and this is not always true. Ebay will often have the best price, but sometimes you can buy the same item from an online retailer or even a physical retailer for as much or less than you could buy it on Ebay, and if this option is available, there is no reason to go with an Ebay seller. For this reason, it is important to exhaust all your other options before turning to Ebay as a retailer. Some of my favorite sites are www.resellerratings.com, www.dealnews.com, and www.overstock.com, just to name a few. Don't forget to incorporate your local listings as well.
If you do find that Ebay can offer you the lowest price, the best way to find the market price is to search in Ebay history. You need to be a registered user, but that shouldn't be a problem if you're considering buying something anyway. Just do a search for whatever you want to buy, and then on the left under "Search Options" and "Show only", select "Completed Listings" and click "Show Items". This will show you every item, sold and unsold, that was listed on Ebay in the last 90 days. Items with a price in green were sold, items with a price in red were not sold. (If you're red/green colorblind, then... you're kind of out of luck on this one.) Now sort your data by price, and get ready for some reading.
Now that you have all your data, we want to get a good feel for what an average price would be. How would we do this? Just look through all the pricing data and find a big chunk of listings that all sold for around the same price (if you're a statistics person, we're looking for the peak of the bell curve). Okay - this should be your benchmark and your budget, but remember: we're not trying to get the average price, we're trying to get the best price. If you can't beat the average, then you need to try again, and if the average is out of your ballpark, you need to be shopping for a different item (refer back to step 1).
3. Characterize a cheap listing
Now that we have set a budget for ourselves, it is time to start searching for deals. Remember, we don't want to be average, we want to be BETTER than average. A good way to beat the average is to look at the sale history and find the listings that sold for 15%-30% below average (much lower than that and you're looking at anomalies). Look at these listings and try to determine what they have in common; what made them sell for less than the average price? That way, when you start looking at regular listings, you'll be able to identify which listings may never reach the average. Read on to find out what I think are some of the biggest indicators of listings that will never reach maximum value.
Step 2: Find Fluke Listings
People screw up - it happens all the time. Fortunately, their mistakes will work to your advantage when it comes to buying on Ebay. I will illustrate my point with another short story.
The very first thing I sold on Ebay was a digital camera. I was pumped: I bought this camera for really cheap (actually I bought three of them and sold two), it was a good camera, and I felt that I could sell it for almost $70 more than I had bought it for. I was 18, still in high school, so $140 was exciting stuff.
The title of my listing read something like this:
"Nikon Coolpix 5400 6.3MP 3x optical zoom - brand new in box"
I started my listing at $0.99, and waited. After three days, I only had one bidder... at $0.99. And then it hit me: I had forgot a crucial portion. I forgot to put the words "digital camera" in the title of my listing. What did this mean for me? It meant that every person that got on to Ebay and searched for "digital camera" saw thousands of other listings besides mine. It meant that the only people that ever saw my listing either searched specifically for "Nikon" or even more specifically for "Coolpix 5400", or went through the arduous Ebay buying menu. In short, nobody saw my listing, so I ended it early and let Ebay eat my $4 or whatever listing fee.
In retrospect, this taught me a valuable lesson that I will pass on to you: the world is full of morons, and you, the savvy investor, can capitalize off of them. Think of it as keeping score, except with money instead of points. Here are some things to look for:
a. High Opening Price - This is very common among new sellers. Oftentimes sellers will list an item with a starting price close to or equal what they want the final price to be, so many times, these items get no bids until minutes or hours before the auction is over. Listings like these are by no means scarce, and they can make for great deals because they get very little traffic until the auction is almost over.
b. Obscure Ending Time - This is another common mistake among new sellers. People get home from work in the evening, they're tired, and they don't end up listing something until 12 or 1 in the morning. Well, if you live in California, that means 3 or 4 in the morning for people in New York. An obscure ending time will definitely get you less traffic than a listing that ends at 6 or 7 in the evening, so look for those and you'll be sure to find listings that won't reach peak values.
c. Misspelled Item Names - Canon makes cameras; a cannon is a giant gun. Intentionally search for misspelled words and you'll find listings that most people won't.
d. Incomplete Titles - In just the same way that I listed a digital camera without actually putting the words "digital camera" in the title, so will others list everything else. If you're looking for speakers, narrow the search down using the category listings on the left, and then do a search like "-speakers -home -theater". This will give you everything listed in speakers that doesn't have the words "speakers" or "home theater in the title. Since these are things that many people search for, you will be able to find some hidden listings using this technique.
Step 3: Determine Real Listings From Fake Listings
This is very easy. Reputable sellers have a good history, others do not. If the person you are thinking of buying from exhibits any of the following characteristics, you should NOT buy from them - there are better, less risky deals out there:
a. Claims to live in the United States, but cannot speak/type/spell check in English - this person probably lives in Nigeria and will exhibit qualities (d) as well as (b) or (c)
b. Just joined Ebay yesterday and is selling a brand new $3000 Trek bicycle for only $500 as his first item
c. Is actually selling eight or nine $3000 Trek bicycles for $500 each, but you have to email him to arrange a "special payment agreement" - this is most definitely crap
d. Will not accept PayPal as a payment vehicle, only Western Union - there is no reason to not accept PayPal over any other payment vehicle unless you're trying to scam people or you don't have a bank account, in which case I still don't want to do business with you. Furthermore, Western Union is the red flag of all red flags. Many many internet scams are facilitated via Western Union, so never ever use them to pay for anything that you buy, or more importantly, sell, online.
e. Has "0" feedback - probably not a scam per say, but definitely not your best bet
Step 4: Bid Aggressively
Here is the most fun part, and everybody has their own style. I personally like to open two windows side-by-side for the same listing, one so that I can monitor the price, and one so that I can actually bid. If it's your first time bidding on Ebay, you might not know this, but when you click "Bid" on the listing page, it actually requires two more clicks to officially register your bid. First you go through a page where you enter your price, and then you go through another page where you confirm your price. In my two-window strategy, I have one window focused on the listing itself, and the other window on the "Confirm Bid" page, so that I can place my bid at the best time with the least amount of clicks.
Here is another trick-of-the-trade: never bid in whole or half-dollar increments. Always bid obscure prices, like $27.82 or $107.13. Bidding like this really throws people through a loop if you do it at the last second, and many times, what would have been good bids turn out to be invalid because they don't meet the bid increment criteria required by Ebay. Less competition for you!
Step 5: Conclusion
It is important to remember, however, that there will always be good deals on Ebay. Never delude yourself into thinking that what you are looking at is a "once in a lifetime" opportunity. If you slip into this mindset, it's easy to overbid and get stuck with an item that you don't really want at a price that really sucks.
The great thing about Ebay is that the longer you wait to buy something, the cheaper it will probably get, so be patient, practice the steps listed here, and have fun in the world of Ebay.