The Single Most Important Buying Secret

The one essential piece of advice you need to know before you bid for anything on Trade Me is this:

You shouldn’t bid at all until the last few minutes of any auction.

It may not be much fun for the seller. And you won’t get caught up in the thrill of the chase. But this is by far the best strategy for buying on Trade Me. When you find something you like,  add it to your watchlist, wait until 15 minutes before the auction is due to end and then follow these five simple steps:

1. Decide on the maximum amount you want to pay.
Unless the auction item is the long-lost silver watch that Lloyd George gave your grandfather, you need to set yourself a limit on what you’re prepared to pay. Deduct the shipping costs. That’s your Maximum Bidding Amount.
2. Check the current bidding.
Open the auction listing page and check the current bidding. If it’s already over your budget limit, step away from the computer. Otherwise, proceed to Step 3.

3. Refresh the auction listing page every minute or so.
Keep refreshing the page until four or five minutes before the auction closes.

4. Place your bid.
Place your Maximum Bidding Amount in the box labelled ‘Minimum next bid’ and (vital!) tick the AutoBid box. Double check that you’ve put the correct dollar amount in the Bid box and that the AutoBid box is ticked.

5. Click ‘Place Bid’.
You’ll be asked to confirm your bid. Check it, click to confirm, then walk away.

So what just happened?
You set a budget and used Trade Me technology to do the bidding for you, up to the maximum amount you specified. You either won or lost the auction, but the odds are in your favour. You will win more auctions using this strategy than with any other Trade Me buying strategy.

WHAT’S SO GREAT ABOUT THIS STRATEGY?

A number of things:

1. You won’t spend more than you planned.
Discipline yourself upfront and stick to the maximum you think the item is worth. Then walk away. Yes, you will lose some auctions using this strategy. But those are auctions where someone else is prepared to pay more than you believe the item is worth. Congratulate yourself — you didn’t let your emotions run away with you. And you’ve still got your money in your pocket, ready to bid another day.

2. You won’t set off a red flare alerting other bidders.
Just one early bid on an auction will draw other members like bees to a honey pot. ‘What are we missing out on?’ Surfers skimming through Trade Me tend to head first towards the auctions with bids, figuring there must be something going on, if others have been inspired to bid. The more bids, the more interesting the item looks. Bidding early also tips off any other potential buyers who had placed the auction on their watchlist, increasing the likelihood that they’ll be more active when the auction is about to close.

3. Trade Me’s AutoBid system does all the work.
As the name suggests, the AutoBid system is used to make automatic bids. When you enter the most you are prepared to pay as an AutoBid, Trade Me will keep you in the lead, by the minimum allowable bid increment, until you win the auction or your AutoBid is exceeded. You won’t have to sit there watching, making a bid, watching, bidding again, watching, bidding, chewing your fingernails. Relax — your trusty companion is on the job.

WHAT ARE YOU UP AGAINST?

There are four other primary Trade Me buying strategies:

1. Nibbling

Users place a bid early in the auction, just enough to take the lead. They don’t bid again until they’re outbid, at which point they nibble away with small increments, just enough to try to take the lead. How do you respond to these users? Ignore them. If they nibble away enough to push the auction beyond your Maximum Bidding Amount, good luck to them. Otherwise they’ll be left behind when your late bid kicks in just before the auction closes.

2. Pre-emptive high bid
Some members believe that if they bid high at an early stage they’ll scare away other bidders. They may — or they may simply raise the cost of acquisition for everybody else, if it’s a popular item. If other bidders are indeed discouraged from joining the bidding, that’s good news for your late bid.

3. Early AutoBids
These Trade Me members have mastered the AutoBid but place their bids relatively early in the auction, often because they’re not going to be at the computer when the auction is due to close. Unfortunately, their bid does increase the visibility of the auction to casual Trade Me browsers and they risk escalating the auction pricing well before the end game — essentially an automated nibbling process. Nothing you can do but stay out of the way.

4. Edge-of-the-seat late bids
More and more members — especially those who’ve been around for a while — adopt the late-bidding strategy, but often want to be there at the kill so they are able to place their own bids manually in the last few minutes. It’s a fine strategy if they really, really want that auction item, but they end up bidding against the machine (ie, your AutoBid), and either drive up your final cost before pulling out or win in the end but pay more than you believe the item is worth. What can you do about these people? Nothing much — but at least you’re emotionally detached.

What about other late autobidders?
There will be other bidders out there who use the same winning strategy we’ve outlined, either as a result of their own experience or (hopefully) because they read this article (or our TRADE ME SUCCESS SECRETS book) as well. What can you do about them?

In the end, it comes down to two elements. Firstly, be as informed as you possibly can about the true value of the item you’re chasing. If the item is worth more to you than to them, your Maximum Bidding Amount will be higher and you’ll win.

Secondly, when you set the dollar value of your Maximum Bidding Amount, don’t round the total off. If you’ve decided that $40 is what the item is worth, toss in another 27 cents (or 59 cents, or 83 cents) or some uneven number that will take you just above what would seem a natural cut-off point. That may be just enough to win you the auction because people typically gravitate to nice round numbers.

Sure, this strategy isn’t as much fun — or as adrenalin-pumping — as a down-and-dirty bidding war but winning within your budget makes it all worthwhile!

SO IS THERE A RECOMMENDED STRATEGY IF YOU ABSOLUTELY, POSITIVELY MUST WIN?

Sure there is. And you can either read about it within the pages of TRADE ME SUCCESS SECRETS — or sign up for our free newsletter [use the signup form on the right hand side of the page] and we’ll cover it in our next issue!

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One thought on “The Single Most Important Buying Secret

  1. Chris

    There is one situation where I will place a very early bid on an item of interest – a low start price auction.

    Increasingly other traders are using the Q&A process to curtail the auction process by asking for a “Buy Now”.

    Many sellers will oblige. The questioner then gets an instant E-mail alert of the sellers response, jumps in and buys the item, invariably depriving other watchers who thought the auction would finish at the previously specified time.

    By placing an early bid I deprive the seller of the option to add a “Buy Now” after the auction has begun. This seems to be the only way to ensure a level playing field for all watchers and bidders.

    “Buy Now’s” are fine when first listing your auction because everyone can see it. What is not fair is for some smart-alec to come along and undermine the whole ethos of an auction that has a published finish time, by having the seller agree to putting up a “Buy Now”.

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