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Better Buying: Tips for Honing Your Auction Prowess
By Mike Thorne, Coins Magazine
May 03, 2013

This article was originally printed in Coins Magazine.
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Last month, I gave you tips on finding what you want on eBay. In addition, I talked about how to find previous sale prices for a coin such as a 1909-S V.D.B. Lincoln cent. This month, I’m going to give you some tips on how to be a better buyer on the auction site.

To start, let’s look at a specific coin on eBay: the 1913-S Barber quarter. When I checked, there were 28 active listings. I sorted the listings by price, and the auctions had a range from a starting bid (or Buy It Now price) of $590 to $7,995.

Suppose you’re interested in the least expensive example that’s still got a decent amount of detail. As I’ve frequently mentioned in articles in which I talked about grading Barber quarters, there is actually a range of grades within a designation such as About Good-3, all the way from coins that are only marginally better than Fair-2 and those that are just a hair’s breath away from Good-4.

Obviously, if you could find one of the latter coins priced as an AG-3, you could buy it knowing that your coin was much better than most AG-3s and nearly as good (and sometimes better) than coins in G-4 holders. [Note: I’m only talking about coins certified by one of the major certification services, as I would not purchase one of the keys that was raw.]

With that in mind, the first two listings are out of the question. The coin with a starting bid of $590 is ANACS-graded FR-2 details, with cleaning and damage. This dog would cost you at least $593, assuming there were no other bids.

Next is another FR-2 specimen, this one graded by PCGS. In some respects it has even less detail than the cleaned, damaged coin. It’s listed in a Buy It Now format for $724.95 postpaid.

The first AG-3 1913-S is described as “much better than average,” and indeed it is. It’s graded by ANACS and has a starting bid price of a reasonable $749, with the current Numismedia Wholesale value for the date of $734. If you were interested in a 1913-S quarter with a lot of detail relative to other AG-3 coins, what would you be willing to pay for this piece? The coin has a good color and is offered postpaid.

The current Numismedia Retail price in AG-3 is $881. Is this coin worth that much? More? After all, the current Coin Dealer Newsletter value for the 1913-S in G-4 is $1,350, with a retail value according to Numismatic News “Coin Market” of $1,800.

Let’s assume you would be willing to pay $900 for the coin. How should you proceed to bid in the auction? Should you bid $900 as soon as you see the listing, open the bidding at $749 and see what happens, or take some other approach?

If you’re the first bidder with a bid of $900 and no one else bids against you, then you’ll win the auction at $749. On the other hand, if multiple bidders are interested, they may bid the price up to your $900 and quit, leaving you with the coin at the maximum amount you wanted to pay. Of course, another possibility is that someone will push your bid to $900 and then bid one increment above it to win the auction.

The best approach I’ve found is to bid as late in the process as possible. Here’s why: Every early bid you make just encourages other interested parties to top your bid, taking the auction ever higher. Although this is great for the seller, it’s not so good for you.

It’s better to insert your maximum bid at the last possible instant. Of course, if another bidder is willing to pay more than your maximum bid and has already placed a higher bid, then you will be outbid and won’t win the item.

Still, by waiting until the very end of the auction to make a bid, at least your bid won’t have the effect of pushing the price higher that I talked about earlier. So, how do you make a last-second bid?

When I started trying to win items on eBay, I would make sure I was in front of my computer near the end of the auction I was interested in. Unfortunately, I rarely got my bid in in time, as my Internet connection was entirely too slow.

It turns out there’s a better way: It’s called “sniping.” If you start typing in sniping on Google, the search engine will “help” you with related endings, such as “tool” and “on eBay.” Clicking on “sniping on eBay” will get you more than 1.2 million results. The second one of these is the definition of the term on Wikipedia. You’ll find the Wikipedia entry on sniping quite interesting. For one thing, the commentary reinforces what I’ve been telling you about waiting to place your bid late in the auction. “Experienced bidders of online auctions with fixed ending times often prefer entering bids late in the auction to avoid bidding wars (multiple rounds of bidders each increasing their maximum bid to temporarily regain ‘current highest bid’ status) or bid chasing (where the presence of an existing bid encourages others to bid on the same item).”

Your Google search will also give you links to various sniping services. All of the ones I checked offer a free trial. My trial usage of an eBay sniping service increased my winning percentage dramatically, and the service, when I went beyond the trial period, was quite inexpensive (1 percent of the final auction price, with a minimum charge of $0.25 and a maximum of $9.95).

Next month, I’ll devote a little more time to buying coins on eBay before getting into the topic of selling on the site.

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