BidBud.com - Sniping- Mechanics of Bidding

Mechanics of Bidding		These myths are centered around the way that bids are entered and how the amounts of the bids affect the auction
#	Myth	It's not true because...
2.1	You can't beat a sniper because the last bid always wins. Direct from the land of small price.	On eBay, the HIGHEST bid always wins, no matter when it comes in during the timeframe of an auction. It seems that snipers often win, because there are so many lowballers out there, so that a snipe will almost always overtake the current high bid. However, snipers lose many auctions because the current high bidder placed a proxy bid high enough to beat back the sniper. Snipers also lose to other snipers, too. Sometimes, in an ironic twist, the earlier sniper will wins!
2.2	Snipers have some special, magical way of knowing how high my Proxy Bid is, and they outbid me by just a few pennies.	This often seems to happen, given the nature of proxy bidding and the increment system, but it's usually not the case. In a bidding system like eBay, the second highest bidder plays a pivotal role in determining the final price. If you bid $10.00 for an item, and I come in at the last second with a bid of $200.00, then I will win for a price of $10.50. Here's the important part: You don't see my max bid and neither does the seller. That $189.50 is my margin of safety and in this case it was never used. From your perspective, you see me beat you by 50 cents, but it's a tip-of-the-iceberg kind of thing. I actually won by a lot more, I just didn't need to use it all. The winner pays a price equal to the max of the second highest bidder plus one increment, which for many items is $1.00 or less. From my own experience, I'm pretty sure that the sniper who wins often bids far more than the final amount. Your True Max Bid (and mine) are kept absolutely hush-hush by eBay. There is no way that anybody, including a sniper, can know this, unless they are hacking into eBay or getting inside help. This is probably very illegal, and highly unlikely. If you suspect this you should report it to eBay immediately. For the record, "He outbid me and won the item, and that's not fair" doesn't count as evidence in this case. Another cause of this myth is that many eBayers, especially newbies, tend to bid in round dollar amounts. I bet most of the bids chugging through eBay right now are of the $1.00, $5.00, $10.00, $20.00, $25.00, $50.00 anf $100.00 variety. Other people have picked up on this and commonly bid 1, 2 or 3 cents over these benchmark values.
2.3	Snipers have a unique way of bidding that others cannot duplicate. They do something with their machines to allow them to snipe and nobody else can do this.	While this myth has only been directly stated once, to my knowledge, it's clearly implied in many anti-snipers posts. It's closely related to the myth above, and probably results from a lack of information. Most new people do not fully understand how the system works. When they lose to a sniper, they sometimes figure it's because he's using the system in some strange way that the newbie can't figure out. This is, of course, completely false. We don't have special versions of Windows or IE from Microsoft. We don't enter a super secret password that enables a "snipe" button on our window. We don't have control of satellites or anything else. All we do is bid toward the end of the auction. Anybody can do it, and it's not really that hard. That's the sad part of this whole thing. So many of us have spent so much time writing huge web pages about sniping, getting into huge arguments over it on the chat boards, and ultimately it's a very easy simple thing for anybody to do. Oh, well.
2.4	Snipers take advantage of others who have slower internet connections and limited access to computers.	Snipers only take advantage of their skills and that of others who don't fully understand eBay's proxy system. My very own mother is a sniper, God bless her, and she has a slow modem. Even with a slow modem you can get in a pretty good snipe bid, and of course if you put in a good proxy bid, you cannot get sniped in the sense that most people think of when they say they were sniped.