The Three Bidding Strategies Found Here

Perhaps no other topic gets so much attention on the Bidding Board other than this one.  This page will present three bidding strategies on Ebay.  All three types of strategies here have gained a certain level of support from its users.  They each have advantages and disadvantages.  Which one is right for you?

Strategy 1: The Incremental (aka. Lowball) Bid

This is the type of bid which raises the current bid by exactly one increment.  When this bidder enters their maximum bid, it always matches the minimum amount necessary in order to bid.   Typically, this type of bid is most common in the earlier stages of the auction.

Advantages
(1) The bidder knows in advance exactly how much that they will pay for the item if they win the auction.
(2) This bid type is resistant to certain types of shill bidders.  If the shill bidder expected the lowballer to have a higher proxy, then the shill bidder will end up taking the lead on their own auction.
(3) If this bid manages to win the auction, then the bidder will have paid the least amount of money necessary for them to do so.
(4) If the opening bid is somewhere near or at the market value of the item, the lowballer could bid that amount and be the first one to "claim" that particular price.  This holds true especially if the next bid increment would require exceeding the market value.  Others may be discouraged from bidding because of this.  Therefore, the lowballer could win the auction with the opening bid.
(5) If the item is part of a Dutch Auction, the lowballer can still win an item and be outbid by some other people at the same time.  The odds of success are determined by approximate market value of the item, the value of the opening bid, the number of items up for sale, and the number of bidders in the end.  The added bonus to this is that everyone will pay at the lowest winning price.
(6) If you bid early, you will be unaffected if one of Ebay's famous outages were to occur.

Disadvantages
(1) Any other bid can beat the lowball bid.  Once someone else bids, that is it.  The only way for the lowballer to take the lead is to bid again.  I once saw an auction where the lowballer bid 42 times to try and maintain the lead.  They ultimately lost that auction.
(2) Some shill scams are still effective against the lowballer.  In particular, the shill bidder may bid the next increment in hopes of enticing the lowballer into a bidding war.
(3) Bidding wars!  If another lowballer shows up, both bidders may end up "fighting" over the item in a very long and tense incremental struggle.  This will in a sense mimic the style of live auctions.  It will take a lot of unnecessary energy, especially for the eventual loser(s), to maintain the lead.  In the end, it is entirely possible that neither of this dueling pair of lowballers will win the auction.
(4) If the bid is placed early, and the lowballer has the high bid for days, they could gain some emotional attachment to the object.  The danger here is that they could very well be outbid in the late stages of the auction.  Many people find this very frustrating.  See the Soapbox and Bidding Boards to see what I mean.
(5) If the bid is placed early AND the lowballer is outbid still relatively early, there is danger of a retraction reinstating the lowballer as the high bidder.   This could be exceptionally troubling if the lowballer has moved on to another auction and now is winning both auctions.  Early bids require the bidder to assume that they must pay for all items bid on EVEN if they are outbid.  That means having one's money tied up on speculation for possibly days on end.

Strategy 2: The Proxy Bid

Proxy bids are often misunderstood by people who are fairly new to Ebay.  Actually, they can also be confusing to a handful of veterans too.  This bid involves the use of Ebay's automatic proxy system.  Here, the bidder has entered a maximum bid that exceeds the minimum amount necessary in order to bid.  If the proxy user's initial bid is in turn outbid, then Ebay will bid on this person's behalf until they either regain the lead OR their maximum has been exceeded (leaving the proxy bidder outbid).   The value of the proxy bidder's maximum bid is hidden to all buyers and the seller unless the proxy bidder is outbid.  Proxy bids are common throughout the life of the auction.

Advantages
(1) If the bidder knows their exact maximum, then they only need to bid once.  Of course, the proxy bidder needs to have their maximum bid amount well thought out in order for this to work best.  Once that maximum bid is placed, there is only one way left to lose the auction.  Simply, someone would have to be willing to pay more than the proxy bidder.  If that is the case, no harm is done.
(2) If the proxy bidder's maximum bid is later tied until the close of the auction by another bidder, the first bid will break the tie and win.  In the case of this proxy bidder, the early bird gets the worm.
(3) An early proxy bid will provide time for the bidder to rethink their maximum bid later on.  This is for those who are not sure what their maximum bid is, but want to put something down in the meantime while figuring it out.
(4) Once the bid is placed, the proxy bidder does not have to be present at the end of the auction in order to win.  As long as the maximum bid is not exceeded, the bidder will win if the auction ends in their absence.  This is extremely effective for those with ultra busy schedules or even those who do not want to give their password out to an automatic bidding service.
(5) A proxy can beat a snipe (Strategy 3).  Yes, that is exactly what I said.  The proxy bid could very well be the final and winning bid in an auction even in the presence of a snipe!  If that late bid is not enough to beat the proxy maximum, then the proxy will win, and the sniper will not get another chance.  This scenario is more common than many people realize.
(6) If you bid early, you will be unaffected if one of Ebay's famous outages were to occur.

Disadvantages
(1) If the proxy is placed early, the bidder has a greater chance of having their maximum nibbled away by indecisive lowballers or even shill bidders.  The longer the wait, the more time there is for someone to beat that maximum.
(2) There is one scam that allows someone to sniff out a proxy bidder's maximum bid.  Someone could bid ridiculously high, taking the lead by one increment.  Obviously, they could deduct by that lead what the proxy max is.  Then, they retract with the "wrong amount" excuse.  Now, the proxy is exposed.   Someone using Strategy 3 just might take advantage of this information....
(3) If the bid is placed early on and the maximum proxy outbid, the early bidder must assume that they still could win the auction.  You can thank bid retractors for this.  If someone retracts, YOU could be reinstated as the high bidder.  That means that the proxy bidder must assume that they will still end up winning the auction at the maximum amount.  Therefore, they cannot feel free to bid on other auctions for the same item until the auction has ended.
(4) By bidding early, other people who collect the same thing that you do could perform a search of your ID to see what you are bidding on.  Then, they will follow you around from auction to auction and bid on the same item that you are bidding on.  You do all the work, and if they have deeper pockets than you, they will get all of the benefits of it.

Strategy 3: The Time-Awareness Bid (aka, the Snipe)

This bid can be incremental or it can be a proxy bid.  However, it has one special added feature to it that so distinguishes it from the other two bidding strategies.  This bid is placed so late in the auction, that no one will be able to manually respond to it before the auction ends.  It is the most talked about and controversial type bid on Ebay. Englandboy's page reflects the official Ebay position as well as comments made by the opponents of this bidding strategy.   Several  home pages have been made about this single subject.  Phil's page has 12 advantages, if you would like the exact details.   Cruentidei has a great summary of all the "proposed solutions" to sniping.  The most common reaction for someone who has been sniped is to wish for an auction extension.  Tiptie has the sniper's school to learn how to snipe like a champ.  I prefer to use the term time-awareness bidding, but most people know it as a snipe.  Snipe seems like such an ugly word, doesn't it.   Like the other two bidding strategies, this bidding style will have its advantages and disadvantages.

Advantages
(1)  No one knows you are coming.  You will evade shill bidders, retractors, lowball nibblers, bidding wars, and the rest of the circus.  You are going to be very instrumental in setting the final value of the item and determining who wins.  If you have the highest bid, guess what?  It's you.
(2)  No one will have time to manually respond to your bid.  If you take the lead against everyone else (lowballers, proxy bidders, and potentially other snipers) as the auction is grinding to a halt, who wins?  It's you.  Many might wish for a second chance to bid, yet they will not get one.
(3) You will not have your money tied up for days waiting for the outcome.  Your wait for a final verdict will be very short.  Then, you will know exactly what to do next.
(4) No one can discover your maximum bid, because there is no time to initiate that high bid and retract scam to find it.  If you win by less than your maximum bid, only you will ever know what you would have been willing to pay for the item.
(5) No one can perform a search on you to see what you are bidding on.  They cannot follow you around from auction to auction because you are cloaked in secrecy.

Disadvantages
(1) The time-awareness bidder only has one shot.  If they bid and miss the a proxy bidder's maximum, there will be no second chance.  A true snipe is where after you bid, no one (not even you) can manually counter bid.
(2) If Ebay has an outage, bids cannot be placed.  In order for an auction to be extended, the outage has to last a couple of hours if I am not mistaken.  I have only seen auctions extended one time, but have witnessed several outages.  Thus, the sniper risks not being able to bid on the auction if the outage time runs over the auction end time.
(3) If you snipe, you may receive e-mails from some very unsportsmanlike individuals belittling you for outbidding them.  True, you still have won, but it can be annoying.

Summary

Well, there you have it.  Ebay has three bidding strategies.  All three of them are used in full force.  Proponents of each are convinced that their style works best for them.  What works best for you?  The correct answer is the one that you are the most comfortable with AND the one that you would not regret using even if you are outbid in the auction.  All of these strategies have their merits and their troubles.  All are legal binding bids no matter what the circumstance.  Some people use multiple strategies depending on the auction.  There are various reasons why someone might pick one strategy over another.  However, incremental, proxy, and time-awareness bids are equally legitimate.  On the message boards, people gladly point out the advantages of their own strategy.  That works for me.  Unfortunately, some people feel compelled to want to ban one or more of these strategies because they do not understand why people would bid that way.  This is where I have a problem.  Everyone goes by the same clock, so there is no tactical advantage for anyone in particular.  We all bid with the same information.  Why should someone force everyone to bid their way because they do not understand everyone else's way?  This page is presented in hopes of giving someone a chance to see the auction process through the eyes of each bidder type.  Pick the one(s) that works for you, and good luck to you!