Subtitled: How the Grinch Stole eBay

I can’t believe that there’s been no fog here for a month now. Well, just in time for the holidays, eBay launches their " Buy It Now " feature.

Excuse me, eBay sellers, but what’s the point? Quick sale? C’mon. You can’t wait a stinkin’ week to see where the price will go? This is a boon to the quick and early buyer, but is this an auction? No way. It’s a clearance sale.

IMNSHO, BIN robs eBay users of the thrill of the auction. It robs sellers of potential gains. It robs other potential bidders of any opportunity to bid on an item. And, when teamed up with naïve sellers (the ones who stand most to gain by letting an auction run its course), it’s dragging down the value of your collection in a way that GLOWs never even dreamed of. To wit: Assateague LE, Mold 2, BIN price: $85. Sanibel LE, BIN price: $79. Currituck, BIN price: $78. I have seen no BIN auction yet where the price has been even near the average for that piece for the last few months. As bad as it is for an auction price when an unsophisticated seller lists a piece with no reserve or a very low reserve and a low 1st bid, BIN is much worse in that it puts a limit on how high the auction can go. It appears that little of value is gained for this sacrifice, unless I’m missing something.

Don’t get me wrong. I have never sold a single HL. Not one. Ever. I don’t intend to either. I don’t use eBay frequently. I don’t even care much about the value of my collection, except that it gives me something else interesting to think and talk about. It’s a bonus mini-lesson in microeconomics that comes along free with collecting. My main problem with BIN is that destroys the auction mechanism. That mechanism, IMO, is one of the very best bellwethers of secondary market value available. Now eBay has gone and screwed with it. Granted, eBay doesn’t owe me a bellwether indicator, but I’d sure like some help in understanding who benefits from this gimmick.

The first bidder clearly wins, if the first bid meets the target of the seller. eBay may win by clearing server space more quickly. I fail to see any significant benefit to the seller. So since this BIN feature is a seller’s option, what’s motivating the sellers to use it at their own peril and to the detriment of the collecting community?

OK, maybe I’m given to hyperbole. Maybe BIN isn’t the end of the world, but this is the Fog Signal Building, and its been much too arid around here lately. Thank goodness for the fog. My hair was starting to get ‘flyaway’.

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-Art
[This message has been edited by Art (edited 12-04-2000).]

Hi Art, .. I agree with you on the "buy it now" feature on eBay. It turns the auction into a classified ad only. We could protest by putting a small bid on every one we see but I suppose that wouldn't be fair to the seller or an occasional buyer looking for an assumed good deal.

I'm sure eBay knows what they are doing. Look at the millions they've made so far with their business. Time will tell if this "buy it now" thing works for them. HL's are just a microscopic part of their overall business. They wouldn't lose any sleep if no one ever posted a HL with them ever again.

Bob

I tend to agree with your thoughts about the BIN feature. I say this at the same time that I used it on several of the pieces that I just listed on eBay.

I put the buy it now amount at aproximately the average price that the individual pieces had sold for recently, either in the Marketplace or eBay.

I have my own personal reasons for using this feature at this particular point in time, but generally I agree it does take some of the mystery out of the auction process. Keep in mind as soon as one bid is made the feature vanishes.

I felt that it gave the best mix for me at this point. It minimizes the possibility of no bids and having to pay eBay for nothing.

I know this is like talking out of both sides of my mouth, but that's how I feel at this point. It's listed by eBay as a special holiday feature. I guess it will stay or leave depending on if they think it makes money for them. If it increases sales they'll find a way to keep it.

I'm new at selling items on eBay, so I'm no expert in this area. just my opinion.

Dennis

I'm not new to buying on Ebay and I LIKE the BIN feature...as my access to the internet is limited and I've yet to perfect the art of "swiping" (being there at the precise minute an auction ends with your finger poised over the "Enter" button, your eclipsing bid just waiting to swipe something away from someone else at the very last second, this happens to me all the time)...if I see something I like, can afford the price, and want it bad enough, I like knowing I can buy it outright.

And by the way, Ebay alone and "dealer dumping" already screwed with the values of our collections long before this feature ever came into effect...

[This message has been edited by Rock (edited 12-04-2000).]

These are two very good points and I agree with them .

Dennis

I just haven't made up my mind yet about the BIN feature. I think it has it's pros and cons. A lot depends on the market trends of what you are selling/buying. About a year ago I decided to liquidate my entire nascar collection. At that time the sky was the limit for nascar collectibles and running the auction to it's end proved very profitable. Since then, the nascar market has pretty much dried up and unless you have a very rare item, it's hard to even get a bid. I listed 3 "hot" items recently and on 2 attempts I had failed to receive a single bid. On the 3rd attempt I used the BIN feature on the 3 items and they sold the first day. So, I guess right now I look at as "An Item sold is better than an item collecting dust". On the other hand, if I have an item that is rare and very much in demand, then I ignore the BIN and let it run it's full length. Also I think it allows buyers on a limited budget the opportunity to get that "Wish List" item and not run the chance of it getting out of reach or being sniped in the last second.


Digger


[This message has been edited by Gravedigger (edited 12-04-2000).]

A couple of additional comments...

This was not posed as a question of whether we like the BIN or not. Although I do not like it, we all will have our opinions and are certainly entitled to them and are free to express them here.

Instead, I am seeking different perspectives on why a seller would choose this arrangement since I have been unable to come up with a reason to like it myself.

I've been sniped in more auctions than not and I don't care for the practice either. Yet that is part and parcel of an online auction. I still like to watch the auctions because the prices are as freely established as you will find anywhere. Freely priced items are market priced items, whether we like the result or not. For the individual, sometimes there are better places to buy or sell. But for establishing a market price, nothing beats an unencumbered auction, or better yet, a series of unencumbered auctions. As soon as we start adding exceptions and loopholes to the process, we hamper or destroy that market efficiency, and your market price fix becomes clouded (or foggy, if you will ).

I certainly have no problem with buying an item outright. I do it all the time, but it's not at an auction when I do it. IMO, buying outright has no place in an auction because it changes the nature of the auction. An auction has a certain meaning in our language and elicits certain expectations. According to Webster, it is a sale of property to the highest bidder. BIN destroys that meaning.

As far as eBay screwing with the value of a collection goes, I submit to you that eBay, on average over a period of time, is as close to a market value as we have ever had. Yes, values dropped when eBay appeared, but they dropped down to market value - a crucial distinction if your objective is to know what the market value is. If you are interested maximizing your collection's value, that's another question with a different outcome.

It is more likely that secondary dealers were the ones screwing with values prior to the advent of eBay. I do not say this in an accusatory way; I believe that most secondary dealers were and are upright people who were just pricing their wares in an informational vacuum. eBay brought about a market efficiency that did not exist before. On the other hand, what eBay is doing now with BIN has the opposite effect. Ergo, fog.


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-Art

Art,
I think Digger had a point above when he mentioned the "hot" pieces he listed received no bids, twice no less. Then, he adds BIN and all 3 sell? Did he just get incredibly lucky, price it right or find 3 buyers that were in a hurry to lock in their purchases?

Dave

BIN is much worse in that it puts a limit on how high the auction can go. It appears that little of value is gained for this sacrifice, unless I’m missing something.

Art,

I disagree with this point. The BIN in essence can be compared to the Reserve Price. The main difference is that this is in the open, the reserve is not. you have to keep bidding up and up to find out what the reserve is. I see the BIN as the minimum acceptable price alternative to setting a reserve. And again, it goes away as soon as one bid on the item is made.

I think this still constitutes an Auction. It's just a variation on a theme, just as the "Dutch Auction" is. Ther are many different types of auctions.

I do agree that eBay has probably "screwed" with the prices of items to bring them more into a true Market value, as it is harder to control information when it is redily available. When that information was being set artificially by a small group of resellers it was harder to know what the "real " value was.

I disagree that the BIN will have the oppisite effect. I think it will help define the Market Value even more . It might not get it to a level you care for, but it's part of the reality of the game. And it is a game, and as we learn as we go along sometimes the rules are made up as things go along.

I'm sure some said the same about eBay itself when it first came along and upset the apple cart of the small cadre of resellers of Harbour Lights and any other collectible out there.

Just a thought.

Dennis

I like it!

SaintWackoPaul '
Keep the Flame

I've recently sold a few low-priced MFSL gold CDs using the feature, all with equal value. I set the starting price at $34.95, and the Buy Now price at $44.99. These particular CDs have recently been falling between that price range, but rarily above for a non-sealed version. 2 of the 3 sold using the Buy Now feature within a day of posting, PayPal payments arrived shortly after, and the CDs were mailed the following morning. I was satisfied with the price, and probably would not have received a much higher price otherwise.

On the 3rd CD, someone started the bidding at the $34.95 price, negating the Buy Now feature. It stayed at that low price for 6 days, and ended up at $36.00

In this scenario, the 2 selling with the Buy Now feature jumped the price slightly higher than what I normally would have received otherwise. Bidders probably felt they could "definately" have the items without being outbid at the last minute, and ended up paying a slightly higher price for the convenience (or lack of price comparison shopping effort). The feature therefore tended to raise the price of the item, vs lowering the price (IMO). If sellers use the feature properly, it could actually be to their benefit by taking advantage of those who are paranoid they will be outbid at the last minute, and initially lock into a slightly higher impulse price than they might have otherwise.

If sellers set the Buy Now price way too low, then they just hurt themselves. We can't protect or police the value of a collectible line from within the hands of uneducated sellers. That's the free market. I imagine it balances itself out in the long run. There are many more uneducated buyers then sellers, it seems.
[This message has been edited by Rod Watson (edited 12-06-2000).]

Here I was down in the lab cleaning out the chad bins and trying to decide whether we should install 802.11 or Bluetooth in the Fog Signal Building. Didn't realize there was a bunch of folks in the drawing room. My my I really do need to turn down the Mahler every once in a while.



Art, congratulations for getting off so lightly in this thread. :-) But the notion that the advent of E-bay caused prices to drop to 'market value' is totally bogus. Unless we're in a Bunky Hunt scenario, prices are always at market value. There was a market for HL models before E-bay.

A few more comments:
1. I don't think E-bay is the primary cause of the drop in prices. I submit that prices have dropped because: a) GLOWs commoditized the top quality lighthouse model market; and b) the increase in edition size turned off many of the people who collected because of rarity; and c) factors 'a' and 'b' changed the nature of the collecting community.

2) While it was harder to get the same volume of pricing information before E-bay, it was by no means impossible.

3) Why would a seller choose By It Now over Auction? Maybe they need to turn over their inventory faster to support their cash flow. Maybe they want to undercut the auction market. Maybe they don't like auctions. Maybe its a vast conspiracy by an unknown far eastern lighthouse model cartel to devalue HL models even quicker so they can introduce their own line. Maybe just because its there.

4) The notion that a BIN seller hurts himself by setting his price too low simply begs the question. Its always possible to speculate that something could sell for more than it does. But a thing's true price is what it sells for. The theory that it has a different true price in some imaginary scenario simply assumes what this argument is trying to prove.

Tsk tsk. If I'd known we'd have such a crowd, I woulda come up sooner. Hopefully Mark was the gracious host and served up crackers with salmon and that nappy flavored coffee someone sent in the nut basket left with those kittens on our doorstep.

A light dusting on The Horns
Fogsignals in the Snow,
__
/im
[This message has been edited by JTimothyA (edited 12-07-2000).]

When an Auction ends via BIN is the final price shown the BIN price or the starting bid price?

[This message has been edited by Lonnie Davidson (edited 12-08-2000).]

Lonnie,

Based on my auctions that ended in a BIN purchase the first bid and the BIN price become the same thing. Therefore it changes to the BIN price from the listed first bid price, since in essence the BIN price becomes the minimum bid since the person chose that option.

Did I confuse the situation enough?

Here's an example I had Portland Head listed with a first bid of $300 , a Reserve price of $400 and a BIN of $450. It was purchased via the BIN and the First Bid changed to $450.

I also sold Old Point Loma the same way with a First bid of $50 and a BIN of $85. It sold BIN and the First Bid changed to $85.

I have not checked other auctions so I can only speak from my experience.

One further point. I disagree with one point made at the top of this thread- I believe that I did set the BIN prices on my items at or near the average price that I could determine that those particular items have sold for recently in the Marketplace or eBay. I do not agree that no one had set the prices at the correct level. i believe I did. I also agree that many others have not.

Dennis

Dennis,

Thanks for the info

I think you're on to something!