Understanding eBay Proxy Bidding - An Example

Because the eBay Proxy bidding process often presents so much confusion and disappointment with buyers of industrial equipment, we have outlined a simple example below to help you better understand eBay bidding so you can create your own winning strategy.  As we often get emails and calls from disappointed bidders asking the question, "what just happened - I really needed to win that item." 

Let's look at a simple bidding scenario to illustrate the way that eBay bidding works. This example auction is for one of our industrial auctions that we list with a $10,000 starting bid. During the 10 day auction here's what happens:

• First bid: A user called Jack bids $24,000 because he needs this item. Though his bid is $24,000, eBay shows the current bid amount on the auction page as $10,000, because this is the first bid. If no-one else bids before auction close, Jack will win the auction and pay only $10,000.
   
• Second bid: Another user called Jill finds the listing and wants to add the item to her fleet. While placing her bid, eBay tells her that she must bid at least $10,100 (the price of the current bid plus the current bid increment), in order to bid on the item. Jill enters a maximum bid of $10,100, and is immediately outbid by Jack, whose maximum bid, you may recall, was $24,000. Now the current bid amount is $10,200, or Jill's bid of $10,100 plus one bid increment, because eBay has bid on behalf of Jack, whose maximum bid was higher. If no one else bids, jack will now pay $10,200.
   
• Third bid: Unfortunately for Jack, another bidder named Ted has also found the listing. Ted is very interested in the item. Though eBay tells him that he can enter a bid as low as $10,300, or the current bid plus one increment, Ted enters a maximum bid of $49,000 as that is the amount he's willing to pay.. eBay bids by proxy on behalf of Jack and Ted all the way up to Jack's maximum, $24,000, but Ted's bid of $49,000 is higher. Ted becomes the new high bidder, and the current bid amount is $24,100, or one bid increment above Jack's maximum of $24,000.
   
• Fourth bid: A user named Amy who has only a passing interest in the item bids on a whim. Though eBay tells her she must bid at least $24,200, or the current bid of $24,100 plus one increment, Amy bids $45,000. She is instantly outbid (by proxy) by Ted, at $46,000, or her maximum bid plus one increment.
   
• Fifth bid: As a final twist to our scenario, Jack returns via My eBay a day or two later and finds himself to have been outbid by Ted. Having a sudden desire to splurge, Jack decides he's willing to spend more and enters a bid of $90,000, just to be on the safe side. Because Jack's new bid is higher than Ted's maximum, Jack becomes the high bidder once again at a current bid of $49,100, or Ted's maximum $49,000 plus one bid increment. A day later the auction closes with no additional bids. Jack wins at $49,100.

From following along with this scenario, you should note two things. First, though maximum bids are encouraged, Jack and all eBay members are free to bid multiple times on the same auction. Second, though Jack's final maximum bid was $90,000 he didn't pay anywhere near that, since the next highest bidder was only willing to pay $49,000—meaning that Jack paid the next highest bidder's maximum plus one bid increment.

If you are planning on bidding $15,000 or more in this item, you must be eBay ID Verified.