As a beginner on eBay, you find yourself bidding in a fast-paced auction. You’re the highest bidder, poised to take home a shiny, new laptop to use for note-taking in college classes and inevitable YouTube watching — until another buyer takes the auction at the last minute.
Welcome to the wonderful world of economics and markets.
While working toward an economics degree, I’ve realized economics can apply to each and every aspect of our lives — from public policy-making to casual online shopping. While many people tend to associate economics with complex math and finance, this social science can be simply described as the study of making decisions in a world of scarce resources.
An eBay sign decorates the front of the company’s headquarters in San Jose, Calif.
If you’re just learning how to use eBay, here are tips on how to win, as told by an economics major:
eBay: the perfect market?
To win on eBay, it helps to understand how this market works. While eBay’s market structure does not make it similar to the model of a perfect market in economics, it does have many buyers and sellers who give out and receive information about goods. That results in a price signal. This price changes due to many factors including, but not limited to, the amount of demand, the quality perception of goods and the initial price.
In addition to the auction-style of sale on Ebay, you also have the option of buying goods at a price set by the seller — without bidding and giving an offer for the good below the asking “buy now” price.
Search for your items
After a broad search of keywords, such as “pc” or “macbook laptop,” narrow down your results to find exactly what you’re looking for. You can do this by choosing sorting options like price + shipping: lowest first or newly listed and by clicking on the category, size, brand or price range.
The goal of this is to find more information to make an educated purchase.
Knowing prices is key in economics. To monitor prices, add listings to your watch list so you can see any changes in prices. Also, sign up for email or text alerts of when you’re no longer the highest bidder and the price increases.
Know your seller
Knowing the reliability of your seller is crucial to not being ripped off on eBay. Determine the reputation and trustworthiness of a seller by looking at his or her percentage of positive feedback (100% is ideal) and number of ratings. Also factor in detailed ratings and comments from buyers by visiting the seller’s profile. Make sure to check the return policy — just in case the item is not exactly what you wanted.
Do not drive up the price
For normal goods, when there is low demand in the market, the price is also low. But when demand increases, the price increases.
The same goes for eBay. If you bid early on an item, another bidder might see your bid and increase the price by bidding again. You can keep the price low by not bidding until the very end of the auction. Which brings us to…
Bid at the last minute
In the wild west of online shopping, being quick on the draw, or being the fastest bidder, is what counts.
There are many bidding wars that come right down to the last second and winning sometimes requires watching that countdown with your eyes glued to the screen. Monitor the last five minutes of the auction and watch the bids come in (if any do), while having your highest bid already entered in the “Place bid” box.
Just don’t submit it yet. Wait until there’s 10 seconds left in the auction and then click “Bid now.” Confirm your bid — and hopefully you’ll get a window that says you’ve won.
If you don’t win, you can always try again because eBay has new listings every day. Good luck!