Ending Auctions (was Re: HP 2114 on ebay)

From: Chuck McManis <cmcmanis_at_mcmanis.com>
Date: Thu Sep 16 15:41:44 1999

At 03:46 PM 9/16/99 -0400, Megan wrote:
>That is true... the seller can stop an auction before the scheduled time,
>but he or she must first contact all the parties who have bid and get
>them to retract their bids (or so I understand).

There's a lot of misinformation going around, I figured another experienced
Ebay seller might step up but, apparently that task falls to me:

First, the seller in an Ebay auction can end it at any time. You just click
on the link to end an auction.

Second, the basic rules continue to hold. Which are:
        - You offer something for sale, you have the option of setting
          a reserve price and a minimum bid.
        - When your auction ends, if the highest bid was above
          your reserve then you _MUST_ sell the item to the highest
          bidder. REGARDLESS OF HOW THE AUCTION ENDED.

The last bit is important, once your reserve is met, the item must be sold
to the high bidder. Its in the contract.

So in the case of the 2114, the seller ended the auction early and sold the
2114 to aek_at_spies.com for at least $455.01.

In this case, the seller probably lost out on potential revenue.

Ebay auctions in my experience follow a very consistent pattern which goes
something like this:

  $$ + *
     | .
     | .
B | ............ .
I $ + ..
D | ..
D | .
     |.
     +---+---+---+---+ ... +---+
     d0 d1 d2 d3 d4 de-1 de
        Days of the auction de = ending day.

(Sorry for the lousy ascii graphics)
Where in the first day or so the price goes up a bit from the minimum bid
as all of the interested parties put in their "watch" bids. Then its flat
for the duration of the auction, and then on the last day (sometimes in the
last 10 minutes) there is a huge flurry of bidding and the final price emerges.

Now a clever bidder can take advantage of a novice seller, by being the
high bidder at the start of the "quiet period" and then after a few days
offering to just "end it now" and pay the high bid. To a novice seller this
looks like a good deal since there hasn't been any bidding anyway, and they
can get their money that much quicker. The seller fails to realize that
some people shop ebay by _only_ looking at the "Ending Today" listings and
so would not even _see_ their listing until the last day. Further, the
novice seller fails to realize that most people do _not_ put their highest
bid in at the start because they don't want to raise the price too much.

Anyway, the latter technique would work great on sellers who were both
novices and had their item at a price "wildly above" their expectations.
Also the high bidder can offer more than their current high bid to the
seller if they close the auction but this is _really_ dangerous because the
seller only has their last bid on "paper" and an unscrupulous buyer could
weasel out of paying more than their high bid.

If the reserve price has not been reached then the seller can end the
auction and not be obligated to sell the item to anyone.

--Chuck
Received on Thu Sep 16 1999 - 15:41:44 BST