How to Use Online Auction Sites

Imagine having a garage sale that millions of people visit. Online auctions allow you to do just that. Television sets, bean bag chairs or designer wedding dresses: If you have it or are dying to get it, an online auction is the place to go. Yahoo.com and Amazon.com have auction sites, but eBay.com is widely considered the premier site for buyers and sellers alike. For general auction tips, check out How to Buy at Auction.

Instructions

Difficulty: Moderate

Buying

1. Sleuth out the going rate for what you're shopping for. Check final bids for similar items in archived auctions. Visit Tias.com or WorthGuide.com to see prices for collectibles. See How to Be a Savvy Consumer and How to Know What Your Collectibles Are Worth.
2. Check a seller's history for positive comments. Online auctions are self-policing with buyers and sellers offering feedback on each other. A seller's name will be followed by the number of auctions he or she has held and a satisfaction rating by the bidders.
3. Provide feedback on other sellers to encourage them to do the same for you. Take a deep breath before you fire off an inflammatory negative review--these reviews are permanent and may reflect poorly on you.
4. E-mail the seller with any questions, and if anything about the seller seems dubious, don't bid.
5. Read the item description carefully; some sellers bury negative information in confusing language or small print. If the size of an item isn't included and is important, e-mail the seller for it-- photos can be deceiving.
6. Find out the cost of shipping beforehand. If it's not listed, ask the seller. Some sellers overcharge for shipping to make extra money.
7. Use proxy bids, which let you make an initial bid and set a maximum one. Your bid then gets automatically increased against competing bids, until you win the auction or someone outbids your maximum. Most sites let you know via e-mail when you've been outbid.
8. Add pennies to your offer to sneak above other bids. For example, if someone has a maximum bid of $75 and you bid $75.07, you'll beat them with only 7 cents.
9. Be a sniper. Bid at the very last minute before an auction ends to "snipe," or snatch away an item from another bidder. There are Web sites that will do the sniping for you for a fee.
10. Use a credit or debit card if possible. These cards provide protections to you as a buyer that checks and money orders don't. Never send cash.

Selling

11. Buy several items from an auction site before you begin selling to build up your personal profile with positive feedback.
12. Include photos that show the complete item, plus details of unique features or flaws. Compress the image files to minimize download time for people checking out your stuff.
13. Do a search before you list an item to make sure there aren't other people auctioning the same thing. Wait to list your item until the other auction ends.
14. Use so-called Dutch auctions (in which you sell more than one of the same item) only on very popular products; otherwise you'll drive down the demand and price.
15. Know the auction site's rules. For example, while you can purchase guns at other sites, many auction sites (including eBay.com) prohibit the sale of firearms, explosives, live animals and human body parts.
16. Plan your auction to end at a time when lots of people use the site, such as weeknights or weekend days. Run longer auctions so more people have time to stumble upon them.
17. Give bidders every reason to place a bid. Accept credit cards and offer guaranteed satisfaction. Respond promptly to questions from bidders.
18. E-mail the winning bidder promptly to arrange payment (many sites use PayPal). Ship the item as soon as the payment goes through. Print all e-mails related to a sale and file them until the transaction is completed.
19. Package items securely and use a shipping service that automatically insures packages up to $100. Buy insurance for packages worth more than $100.
20. Save all e-mails related to a transaction until it is completed and you are satisfied with your purchase.

What to Look For:

• Buyer and seller history
• Item description
• Proxy bids and sniping
• Dutch auctions
• Site regulations
• E-mail communication
• Shipping and insurance

Tips & Warnings

• Know your limit. Avoid getting swept up in the bidding frenzy and paying more than an item is worth or that you can afford.
• Be wary of shill bidders who work in cahoots with the seller to artificially drive up the auction price. If you suspect a seller is using shill bidders, report it to the Website administrator.
• Both eBay.com and Amazon.com insure auctions from reputable sellers up to a certain amount. They also offer escrow services so buyer and seller can safely exchange large amounts of money.
• Many auction sites have wonderful community features that allow you to network with other collectors. Take advantage of them.
• Write (and spell-check) an attention-getting title and a thorough, accurate product description. Include condition, history, dimensions, distinct markings, shipping costs, and payment options. Glean keywords from other ads that people are likely to search for and write your item description accordingly.
• Never provide your Social Security number or bank account number to sellers. If a seller asks for this information, report it to the Web administrator immediately.