AW Daily - Tips & Tactics - During the Auction: Deciding Bid Amounts

Home > Tips & Tactics > Tip

Page 1 , 2

During the Auction: Deciding Bid Amounts

As an online auction buyer, you're faced with many questions, none more important than the most basic and most important: How much are you going to bid? What is the financial limit you're going to impose upon yourself? Sometimes setting limits and holding back on that last-minute snipe is easier said than done. Our tip offers an overview and advice on how to spend what's right and decide on the best bid amount.

How Much Is Too Much?
First and foremost, know how much you're willing to spend--that's the ultimate bottom line. If you place a bid, then get outbid, then counterbid, and so on, you'll likely get caught up in the bidding frenzy and not only pay more than what you planned but also pay more than what the item is worth--two bidding no-nos. Granted, this can be part of the fun of online auctions; however, what initially seems like a rush can soon turn to regret when you're stuck spending more than what you'd like.

Rule of thumb: If you can't afford it, don't bid. Bypass any purchase (or purchases; those minor buys can add up) that has the potential to significantly impact your financial situation. On the other hand, if you can afford it, give yourself a general range. For example, if you're interested in buying a Sega Dreamcast gaming console, you might settle on $140 as your ideal price and $190 as your ceiling. That gives you a buffer of $50 to work with. Although it might sound obvious, consider a few financial basics: be aware of how much money is in your savings or checking accounts, or if you have any impending bills (rent, house payments, large credit card amount due) that might impact your immediate cash flow. Once you commit to an auction, you need to follow through. Again, you should approach an auction knowing exactly how much you're willing to pay for a particular item. Let proxy bidding do the rest.

Some buyers like to shoot for getting an item at approximately 50 percent below its current retail value. Of course, this isn't always possible, but it's a good goal to strive toward nonetheless. Just don't be so fixated about a particular percentage that you miss out on a good deal while holding out for a great deal that might never materialize.

Market Sense
So how do you determine if what you're willing to spend is a fair amount? Once you've accessed your financial situation, the next step is to find out the item's market value. Fortunately, there are several simple ways to become a knowledgeable buyer:

Look at other auctions for the same item and determine how the bidding is going. What is the average amount of the winning bids? Are prices going down? Up? Staying the same? Also, don't limit yourself to one auction site. Check out other auction sites, too (better yet, use AW's Stores Search). Prices can vary from site to site. A better deal might be had elsewhere.

Study the bid histories of recently closed auctions and see if a pattern emerges. If an item is currently "hot" and the bidding particularly intense, consider waiting a while, even though you might be jonesing to place a bid--this is one of those situations where it's very easy to exceed your spending limit. Ask yourself: Do I really need to buy this item right now? Conversely, if prices have bottomed out, it might be time to strike.

Next Page | Tell me more