Is Auction Sniping Worthwhile?

Filed Under Bidders' Tips 




While auction sniping is a rather common practice (documented to occur in about 25% of eBay auctions that close in a sale), its never actually been scientifically evaluated and proven to save the bidder money.  Until now anyway.

A study by economics researchers from Northwestern University and Hong Kong University of Science and Technology indicates that sniping saves the bidder an average of 1% compared to bidding early – a technique they term “squatting.”

This savings is less than the 9% average benefit typical to those bidders who employ the cross-bidding technique.  So why would you want to snipe?

Here are some benefits to sniping:

  1. Its easier than cross-bidding — especially if you have an automated sniper tool like the free one from AuctionInsights and AuctionStealer:  http://auctioninsights.auctionstealer.com
  2. It protects you from naive bidders who are prone to keep raising their bids emotionally rather than moving on to another auction listing.
  3. If offers you your best protection against shill bidding — the illegal some shady sellers employ to bid on their own auctions in order to raise the final sale price.
  4. You are more likely to actually win the auction by sniping than by squatting.

The researchers, Jeffery C. Ely of Northwestern University, and Tanjim Hossain of the Hong Kong University of Science and Technology placed bids on 566 auctions for eight popular, recently released DVD’s.  Their winning percentage was 47.6% in auctions in which that bid early (squatting) and 53.6% in auctions in which they bid during the last five seconds (sniping).  The auctions all occurred during August and September of 2004 on the U.S. eBay site.

 The paper, entitled “Sniping and Squatting in Auction Markets” was published July 7, 2006.

Posted Feb 20, 2008

Related Posts:

  • Reader Mailbag: Competing Auction Snipers
  • Should Sellers be Concerned about Auction Sniping?
  • How Common is eBay Sniping?
  • Auction FAQ
  • How to Snipe on eBay


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    One Response to “Is Auction Sniping Worthwhile?”

    1. James Tullos on February 26th, 2008 6:47 pm

      Hi, Sniping is a source of irritation for many sellers, myself included. The perception is, as your article suggests, that items sell at a lower price when snipped. eBay could eliminate sniping easily if they did what other auction sites do. If a bid is placed in the last 1 minute, for example, of the auction closing, 5 minutes are added to the auction.

      This would effectively eliminate sniping, and more importantly, raise the final sell price of the item.

      Both eBay and the seller win out. eBay gets a higher final value fee, and the seller receives a higher sale price.

      Thanks
      James Tullos
      http://www.ArlingtonAntiques.net

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