Bid sites are websites which allow people to run an auction for their goods. They have the advantage that they bring together more buyers and more sellers than a real world auction which is limited to people in a specific location. However, there are some important differences to remember about the way such sites work compared with traditional auctions.
Many people either don’t understand, or forget, that bid sites usually work through proxy bidding. This means a bidder will state a maximum amount they are willing to pay, but the site will initially only count their bid as being for the lowest amount necessary to make them the highest bidder. If somebody else bids a higher amount, the original person’s bid is automatically increased to just beat that amount, up to and including their stated maximum.
In theory this means that buyers on bid sites only ever need to place one bid, specifically the highest amount they are willing to pay. By this logic, there should be no need to bid again if the price exceeds their maximum as, by this point, the price will be too high for them. In reality, human emotion often takes over and a “bidding war” can make some people change their minds and become willing to pay more just to “win” the auction. These people will often attempt to place a bid at the last possible moment before the auction is scheduled to end, either manually or using automated software.
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It’s important to remember that two separate contracts exist with bid sites. One is between the seller and the site itself and concerns the fees the seller pays, which usually consist of a flat rate for listing the item and then a percentage of the final sale price. However, the contract for the sale of the goods exists between the buyer and the seller.
Some sites may have policies which mean people who either don’t pay for goods or supply them to the seller are barred from using the site. However, this is separate from the legal situation; this means that the winner of an auction is automatically in a contract to exchange the winning bid price for the listed item. If either side fails to live up to this, the other party has the right to take legal action to force them to do so.
Some bidders use the technique of always bidding one cent above a round number, for example ten dollars and one cent rather than simply ten dollars. This is because most people place a maximum bid of a round number. In this example, though both bidders are effectively willing to pay the same general amount, the one who bid the extra cent will get the item.
A useful tip when searching for bargains on bid sites is to look for misspelled terms in titles. Because such items don’t appear in search results for the correctly spelled term, they generally have fewer bidders and are more likely to go for cheaper prices. There are some specialist websites which will take the user’s choice of phrase and automatically search leading bid sites for a wide variety of possible misspellings.