Shill Bidding

xphobe

What exactly is wrong with Shill Bidding? Teletrade allows it; it's called a "Buyback Bid".

I know there's a negative gut reaction to my question. I feel the same way. But before you answer, think about it: If I want to bid on my own items - assuming if I win I pay both the buyer and seller fees - why is that considered unethical? eBay would still get their money.

Does it "force" other bidders to bid higher? Would you really bid more than you thought something was worth, no matter who bid against you?

I submit that shill bidding is not unethical, that it has been labeled as such by people who are irritated by the practice because it can prevent them from "getting a rip".

Well, I'm irritated by Hidden Reserves. Maybe we should just call a Hidden Reserve unethical, and demand that eBay discontinue the practice. Like they would care.

Let the flames begin.

PerryHall

I agree. Just another way to set a reserve. If they are too greedy, they buy back their own coin and pay all the eBay fees. Don't the big auction firms bid in the own auctions?

slipgate

According to Ebay, shill bidding is illegal. Also shill bidding is not bidding on your own auctions, it is someone else bidding (multiple times) with the intent of driving up the price and no attempt to purchase. Ebay used to allow sellers to bid on their own auctions but stopped that practice.

morgannut2

A true auction price is determined by 2 or more willing and knowledgeable bidders in the Uniform Commercial Code. It is perfectly ethical for a seller to place a minimum reserve. But it's misleading and fraudulent to have a pretend bidder, instead of a minimum sale price.

mayor1

If I remember correctly back in '98 when I first used ebay, you were allowed to bid one time on your item. Bill.

xphobe

<< <i>According to Ebay, shill bidding is illegal. Also shill bidding is not bidding on your own auctions, it is someone else bidding (multiple times) with the intent of driving up the price and no attempt to purchase. Ebay used to allow sellers to bid on their own auctions but stopped that practice. >>


First, I don't think it's correct to say it's "illegal" unless it violates some federal or state law, not merely eBay's TOS.

Here is their definition:


<< <i>Shill Bidding is bidding that artificially increases an item’s price or apparent desirability, or bidding by individuals with a level of access to the seller’s item information not available to the general Community. Shill Bidding is prohibited on eBay. >>


Note there is no mention about intent to pay.

How is it possible to artificially increase an item's price or desirability? Either people freely decide they want it, for a certain price, or they don't.

The whole "level of access" thing bothers me. They specifically exclude "family, roommates or employees". Yet friends are not excluded explicitly, although they certainly are individuals that could have special knowledge. Is the seller excluded? Again not explicitly. How could they prove you had knowledge you didn't pass on to the general community?

So what if some people know more about an item than others? Special knowledge might make you bid more, or less, depending on the nature of that knowledge.

Suppose for example, that you know a dealer personally, have seen a coin in-hand, and now want to bid on it. You know it is better than the pictures indicate. You bid more, which maybe induces others to bid more. What's wrong with that?

Or, you know it has a scratch that doesn't show up on the pics, or you know it's been cleaned although the dealer doesn't mention it in the description. So you bid less, which has no effect on how others bid. What's wrong with that?

relayer

<< <i>If I remember correctly back in '98 when I first used ebay, you were allowed to bid one time on your item. Bill. >>



Yes, that was the only way you could end your auction early back then - by putting in a giant bid

lkenefic

I would have "bought back" my Lincoln cent collection instead of letting it go for $5 plus shipping. The Whitman Album was worth more than that.

morgannut2

Actually Ebay is so screwed up--it doesn't bother me that much. If I really want something I bid early to see if there are shills. If I still want it, I bid less than a minute before it closes so the shill (owner) has to really value the sellers coin more than me. Of coarse that takes the auction out of the auction premium for the seller--but that's what shilling does.

ElKevvo

Shill bidding does raise prices...the point of a shill bid is not to scare the buyer off by bidding the item so high that they will be priced out of the market, but to sqeeze the buyer as much as possible. Sort of a balancing act. If you made an extra 7% off of every sale via a shill bidder that will start to add up pretty quickly.

Also, since the various price guides that are used often compile prices etc. to arrive at an average, shilling raises the average price by forcing the prices up. If prices were falling overall, shilling lessens the price drop by providing artificial support.

Just a couple thoughts!

K

PerryHall

<< <i>Shill bidding does raise prices...the point of a shill bid is not to scare the buyer off by bidding the item so high that they will be priced out of the market, but to sqeeze the buyer as much as possible. Sort of a balancing act. If you made an extra 7% off of every sale via a shill bidder that will start to add up pretty quickly.

Also, since the various price guides that are used often compile prices etc. to arrive at an average, shilling raises the average price by forcing the prices up. If prices were falling overall, shilling lessens the price drop by providing artificial support.

Just a couple thoughts!

K >>



Unless one is a mind reader, how can a shill know when to stop bidding? If he guess wrong, he doesn't sell the coin and he has to pay all the eBay fees.

lloydmincy

XPHOBE:

Russellhome

I belonged to a coin club that had a small auction as part of the monthly meeting. They allowed the seller of any auction item to have one bid on their item. So if the auction got to 'Going, going, gone' and you didn't like the price you were getting for your item - you could take your one bid on your item. But, you could still be outbid and a 2nd bid by the seller was not allowed. This worked really well and I had no problem with it from either a buyer or seller perspective.

Sometimes it is obvious that there is just no interest in an eBay listing. I wish I could have done a 'buy back' bid on some of the items I've sold. Today, I mailed off a pair of coins that sold for $2.19 -- not even covering the eBay/Paypal fees. The same pair of coins in the same condition have regularly sold for $15.00+. If eBay did not stiff you so badly on the reserve fees, then I would use that feature to protect the bare minimum I'm willing to take for a coin. But eBay fees promote the .99 cent/no reserve auctions -- and with that format, you sometimes you get burned.

To me, eBay is much too tight on their definition of shill bidding. Shill bidding is when there is intent to make your item look like it is getting action so that some unknown party will be coaxed into bidding on it and hopefully paying an inflated price. If my brother-in-law, who also collects coins, wants to bid on my items, why shouldn't he be able to? And if one of my auctions is selling for way less than it is worth, why should I not be able to enter one 'buy back' bid. Ebay could even keep a count of these bids on the seller feedback profile, so bidders know who abuses the feature. Currently, your only options are to end an auction early or take it in the shorts.

ElKevvo

The shill does not really know 100% certain when to stop, anymore than a person who snipes an auction at the last second knows if his bid is going to be greater than the max bid placed or if someone else will bid just slightly higher a second later.

And PerryHall is right, if the shill 'wins' the fees still have to be paid. But if the shill manages to get an extra 10.00 out of bidders on 2 auctions, then scares away another bidder on a 3rd and loses 5 bucks on fees, the total take is still an additional 15.00 above what the auctions would have closed at without the shill.

Usually human nature takes over...the fact that the shills should be disengaged from any emotion during the bidding process while the buyer is not means the buyer will tend to bump up 'just a little bit more'.

K