The Science of eBay 136
PreacherTom writes "Professors of marketing, economics, management, and psychology have published dozens of papers to try to explain how and why eBay users buy and sell online. At the same time, there is no shortage of people offering helpful hints online. Kerry Miller takes a novel approach, offering 10 tips to maximize your profit that are based on a summary of these scientific analyses, rather than just 'educated' guessing."
That is not science... (Score:5, Insightful)
Most of the tips are common sense or obvious to people who have used eBay a few times, to both buy and sell.
Along the same lines... (Score:3, Insightful)
Re:Along the same lines... (Score:5, Insightful)
Most economics proffessors know that there is no sure-fire way to make money apart from saving and investing carefully. They know that just as many people lose money in the market as make it. But then again, you have some people that go to business school that don't teach, like Warren Buffet...
Just a like between action and knowledge. Most economics profs I would guess have a large amount of money in savings, bonds and blue chip stocks.
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You hear this terribly misguided claim again and again on slashdot. Are Americans really in general that clueless about investments?
If losing and gaining money was equally likely, if the stock-market was a zero-sum game then there'd be no reason to play it. Indeed, on the average you'd lose your brokerage-fees.
Lu
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Please put on your RDFEG for testing purposes. (Score:1, Troll)
I'm sorry, but you seem to have used the phrases "university position" and "more money than you know what to do with" in the same sentence. We are forced to view your comment through special Steve Jobs Reality Distortion Field Effect Glasses to check for credibility. These glasses will be available at Mac stores soon, pac
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If 95k a year is all spoken for, how do people manage who make less than 95k? Surely then someone on 45k would be going 50k into debt every single year just through the costs of living.
Or maybe these economics professors are just being uneconomic with their money...
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But that's my point. Someone who lives in a major metro area, proximate to the sort of high-end school that can actually pay a professor $95k, is going to have very high cost of living, and presumably doesn't live like a total hermit. Hence it's all spoken for. Someone who teaches at, say, the U of SD, is going to be livin
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So how do the lesser-paid professors, cleaners etc. at that same school manage to live?
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Roomates. Hyundai sedans. Little or no savings. Less dinner out, no new flat panel TV. In other words, pretty much like most people. The real thing is having fewer dependents.
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Professors recieving grant money can't really afford to waste their time.. teaching classes. They have to work on the research to keep the grant money coming in. Similarly, Gran
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Those Who Can't Do... Teach!
There is more to it than that, actually a lot more, but there is a BIG difference between knowing and doing.
I'm frequently astounded how many PhDs in computer science or something like human factors engineering teach this stuff for a living and do research in the fields, but they don't or can't do basic s
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And the fact that they have no reserves saved up is a stupid reason, to be frank. The median age of business professors is, what, 50? And they don't have enough saved by then? Plus, they can find investors. So no, it's a n
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c) err your next statement: median, right so there are economics profs who are 30 and still paying off their school loans and of course the luck few who have bad habits and drank, snorted, gambled, f@cked away their money shamelessly. Then there are the idiots who are smart enough to get
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Now if you're talking about management schools or something like that then you're talking about something completely different.
I'm pretty sure most people who responded to you assumed you were talking ab
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I'm sure there's something worthwhile in what you said, I just don't have the time to look for it.
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Six years ago... (Score:2)
I earned about 80 k (my pay has gone up about 5k per year)
Now I own my own small house (no mortgage) and have about 600k in shares. Mostly blue-chips, tho to be fair I've probably made almost as much from telecoms and gold-mines as blue-chips.
If any intelligent self-directed person without other responsibilities cannot duplicate that performance then in my opinion they are complacent.
Oops (Score:2)
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"Anti-acid and prozac medication? It is the lawyer prescription."
Sadly he said that if my heartburn gets any worse he would suggest this presciption for me. This is probably the number one reason why a proffesor doesnt make tons of $$ in the real world since academics is no where near as stressfull and bodily distroying as running your own buissness
Re:Along the same lines... (Score:5, Insightful)
Some are. My undergrad econ professor was a millionaire who consulted for major companies, but taught freshman-level econ anyway because he enjoyed it.
That may not be representative, but just because they're in academia doesn't mean there's no substance to what they're teaching. Some people just like teaching, or like the academic environment, or aren't interested in the sacrifices they'd have to make to really do well in business. Or have already done very well in business and are teaching from quasi-retirement, or whatever. You get the idea.
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Or did that so he could teach incorrect economics in order to keep all the money for himself, muahahahaha.
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Same here... (Score:2)
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Size of human brain = x
Knowledge of PhD in his field = x
Brain Power required for body functions (breathing, digestion, etc.) = 1
x x+1 this leaves no room for anything else.....
2 cents,
QueenB
Biz school different, those who teach also do ... (Score:3, Insightful)
Business programs are very different than scientific and engineering programs. I have BS and MS degrees in Computer Science. The MS degree was from a school near JPL, lots of part-time consulting gigs for profs and students. Now I'm working on an MBA. The relationship with industry is far more intimate with the business school.
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I always thought it was because the economics and benefits of becoming a professor with tenure was risk/work vs. rewards out there.
Employement effectively for life with a great pension at a large orgainzation with a stable customer-base and very little compitition. Sounds like a good deal.
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Why do some engineers work at companies instead of inventing things on their own? Why do some programmers become overworked code monkeys for someone else instead of on their own? Etcetera.
To branch out on your own takes some initiative, willingless to take hassles of entreprenuership that a 9-5 job doesn't have, and some guts.
Also
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A followup to my previous comment:
Economics professors also know that market timing is dangerous, and not often sucessful. For example, I knew that the housing market was headed for a downturn over 2 years ago, and Warren Buffet said the same thing when he sold his beach house. So, you can know that something WILL happen, but you ma
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Business thrives on buzzwords and the latest management meme/theory, that's why. It gives the masses of "managers" something to believe in while they toil away being unproductive and demonstrating their authority. Not all companies or managers function this way though.
Not everyone works for yet more money, some people have en
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2. The writer is only knowledgeable enough to speak on this matter because
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Indeed. The slashdot submission sounds like it was written by the author himself. That's the sort of thing that all of those "IBM Whitepaper" authors do.
As a one-time PhD student let me say... (Score:1)
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The Science of eBay (Score:3, Insightful)
-Grey [wellingtongrey.net]
Ebay Express (Score:1)
There aren't any alternatives, that's the problem (Score:2)
THE TIPS - ad free (Score:5, Informative)
An auction for a kitchen sink with a starting price of $225 ended without a single bidder. When re-auctioned with a starting price of $75, the sink sold for $275. The exception to the start-low rule: If you're selling an idiosyncratic item you don't think a lot of people will bid on, set a price closer to the item's actual value.
2. Use reserve prices with caution, especially for low-priced items. When using a low minimum bid, nervous sellers sometimes set secret reserve prices to make sure their item doesn't sell for less than the item's true value. Using reserves is a risky strategy for sellers, say professors at Stanford and the University of Arizona, because it reduces the probability that the auction will end in a sale.
In an experiment using Pokémon trading cards, they found that secret-reserve auctions on average resulted in fewer serious bidders per auction and lower final sale prices. However, other research suggests that for auctions of higher-priced goods (over $25), secret reserves might actually push revenues higher when the auctions end in a successful sale.
3. Use photos in your listings. Listings with photos receive much more traffic than listings without photos. Generally speaking, more traffic to your listing--especially on the first day of an auction--results in more active bidders, and the more bidders competing for an item, the higher the sale price. In one study at Stanford, researchers found that an extra bidder results in an 11.4% increase in auction revenue among all auctions, and a 5.5% increase for auctions in which there are least two bidders.
4. Don't flood the market. If you're selling multiples of an item, space them out, rather then selling them all at once, says Ku--that's simple supply and demand at work.
5. Spell-check. Misspellings decrease the amount of traffic an auction receives. Ku, Galinsky, and Murnighan found that Michael Jordan shirts listed "Micheal" went unsold almost twice as often as those that were spelled correctly. When sold, the misspelled brand names resulted in lower final sale prices.
6. Hype it up. Ku and Murnighan suggest that inserting blatant puffery like "This shirt is hot!! A must-have for the summer!!" into low-starting-price auctions could stimulate interest better than more straightforward listings, and possibly even raise final sale prices. Researchers at Stanford found that auctions which mention the high retail price in an item description sell for 7% more on average.
7. Hold longer auctions. Researchers from the University of Arizona and the University of Michigan found that longer auctions tend to fetch higher prices. While three-day and five-day auctions yield approximately the same prices, seven-day auctions are about 24% higher, and 10-day auctions 42% higher on average.
8. Don't end auctions during "eBay happy hour." Though it might seem counterintuitive, a University of Pennsylvania researcher found that auctions ending during peak hours on eBay are actually 9.6% less likely to result in a sale. The reason? More competition. About 35% of auctions end between 5 p.m. and 8:59 p.m., when 25% of bids are placed.
9. Charge for shipping--but not too much. Bidders don't pay much attention to shipping costs when placing bids, say professors at UC Berkeley and Hong Kong University of Science and Technology. CDs listed with a starting price of one cent with $3.99 shipping averaged 21% higher final sale prices than CDs set with an opening price of $4 and no shipping charge. B
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Looks to me like you've simply replaced Business Week ads with Slashdot ads.
Business Week had to pay the author who wrote this story, out of its ad revenues. What right does Slashdot have to those revenues?
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There's nothing, nothing at all, in this article I haven't seen in many other places on the web.
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Because he wrote it, and you didn't. Regardless of the effort you think went into the article, he at least did something instead of sitting on his ass steling other people's work.
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Can't agree with 2 and 9. (Score:3, Informative)
I can comment on that one. I generally avoid auctions with reserve prices. Usually the reserve is too high, an
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You call bullshit on something someone observed and documented? They weren't pulling stuff out of their butts. It was a study.
Regardless, I'm with you -- I always pay attention to shipping, especially for international orders.
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They forgot #11... (Score:2, Funny)
Shipping price is important (Score:2)
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From the article... (Score:2, Informative)
I disagree with this statement. In my experience, the length of the auction, especially when the item is widespread, makes little difference in final sale price. This is easy to tell if you're a s
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It doesn't matter how much theheff has used ebay, his memory is human. It is selective and unreliable. If you can find the flaw in the reliable statistical research, by all means do so. If it's so trerribly wrong, the flaws should be glaringly obvious. Someone with as much experience as
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OK, you tell me what they missed then. It seems to me they've taken aution lengths, ending times, starting bids, reseve prices, and final prices into consideration. What else would have affected the particular statistics they gave?
I thought it was pretty obvious by
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That's the wonderful part about statistic
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I hate ebay (Score:1, Offtopic)
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My 2 cents (Score:5, Funny)
That'll be $1 for the advice and $11.95 for shipping.
No C.O.D's
A bit dear (Score:2)
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People just like to bid... (Score:4, Insightful)
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Its a known and studied phenomenon. What happens is that under "normal" economic transactions, people are trying to optimize bang for buck with little variables like convenience (eg, paying more at a convenience store), supply/demand (eg, movie theater soda prices), paying slightly more for the illusion or reality of support vs buying it second hand, etc.
But, many of these rules go
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Yes, I've been amazed to also see this happen. I tend to use Google to find the lowest prices if I'm looking to buy something and Google normally comes back with the same few local (30min drive max) vendors I buy from anyway. It seems that eBay items typically go for cheaper than the RRP you'd pay at $BIGNAME_MERCHANT_AT_THE_MALL, but often more expensive than the brand new item fro
Here's another good reason eBay works... (Score:3, Insightful)
Same reason alcohol is great: drink to forget (bad times), drink to celebrate (good times).
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Simpsons did it!
Alcohol: The cause of and solution to all of life's problems!
Weak article... (Score:1)
My own tips from almost 4 years ago (Score:4, Insightful)
Updated:
Don't post stuff in lots. Auction stuff off separately because you'll have a hard time finding someone who wants all of it, but you will get bombarded with annoying emails from people interested only in one or two items who want you to break up the lot. Instead, list everything the same day, mention in each item description that you've got other items that complement this item, and create a link to all your current auctions (assume people won't think to click on the official eBay "View seller's other auctions" link).
Having nice, large photos of everything will encourage a higher final value. People like to know what they're buying.
Having detailed descriptions will cut down on having to answer the same question a hundred times from prospective bidders.
Make the auctions run for at least 5 days, so patient people who like to search and zero in on low-priced items they need will be able to put you in their watch list-- more watchers in the beginning means more people competing with each other and driving up the price at the end.
Time the start of the auctions so they end on a Sunday evening, but before 8pm-- when people are almost certain to be home but aren't yet glued to the TV. (But definitely don't end it the night of the Super Bowl!)
I have used the above tips for years, with great success.
~Philly
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you contradict yourself (Score:2)
There are quite a few people who make a living buying lots, breaking them up, and flipping them on ebay. It's similar to buying a brand new car, vs. paying $200 for a washer fluid bottle, $80 for a badge, $50 for the mounting bracket for the badge, etc.. when the car is in an accident, and needs to be repaired.
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no lots... I've won several auctions where the seller bundled in some other crap I didn't want. They have always ended at the lowest price I saw all month for just the item I wanted. The corrolary to the no-lots rule is that you should auction stuff in large batches if they are related items. Each auction is an ad for all of your others. I've found that I get about 15% less for items that
Isn't it obvious... (Score:2)
Most important tip. (Score:1)
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Tip Number 12a - A variant on the above. Buy 50 hot items (latest cell phones, etc) -> List all 50 for 25% of their retail price -> Get fantastic feedback -> Then list 10000 of the same item which you do not have -> Run away -> Serious profit!
There's no ???.
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12a: 50 is nowhere near enough to run this scam. 50 means you're a mediocre buyer, not a good seller. People who have run this scam have 2k-10k feedback and have typically been running as a legit business for a year or more. They wake up one day and realize they can probably make it to Mexico with $500k. Unfortunately, it harder
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On Trade Me, which is New Zealand's primary online auction site, they'll pull auctions where your friends have legitimately bid on them [dubculture.co.nz].
Corollaries (Score:2, Insightful)
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My 2 cents + 6 dollar shipping
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The Price of Shipping (Score:2)
That really should be obvious. But
Excessive shipping isn't just to decieve the buyer (Score:3, Insightful)
so if you sold an item for $100 with $5 shipping, ebay would bill you for their share of $100.
If you sold the same item for $1 with $104 shipping, ebay would bill you for their share of $1.
Buying electronics on ebay is more trouble than it's worth, because of this. The margins in that category are so slim, that the only people who can make any money, are the ones who have excessive shipping.
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A Sucker Is Born Every Minute (Score:4, Funny)
Just make any ordinary item something *sound* special in some way, and start the pricing out with a number ending in ".95", and they jump on it like fleas. I've managed to sell numerous used items time and time again at above retail prices, because of this.
Remember kids, it's not lying if it can't be proven wrong.
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This assumes that you haven't used it all up yet.
6. Hype It Up (Score:3, Insightful)
I'll think about it next time I have something to sell
"This PowerMac 6500 power supply unit is hot!! A must-have for the summer!!"
Besides that, everything listed there is pretty obvious, except maybe the 8, which says not to make the auction end during the peak hour.
been there done that (Score:2)
-M