How much should you bid?

Knowing how much to bid on a given lot is a tricky subject. Obviously, you could just bid $100 on every lot you want and you'd probably get most of them, but that only works for people who love fish and hate money.

Let's take a look at how much money people are actually willing to put down for a lot. If we have an idea of that, you'll know how much you need to bid in order to win without breaking the bank.

How much people actually bid

First, let's take a look at the actual dollar amount people are willing to bid. These data are based on the maximum bid given by users on lots (~900 bids in total). Even if the bid didn't win, it's shown here. But if someone bid $1 and then upped it to $5, only the $5 bid is counted.

Right away, we can see a few things:

  • Most people would rather bid low, but not too low ($5-10 is the sweet spot)

  • Round numbers are popular. Look at how many more people bid $5, $10, $15 or $20 compared to bidding just a dollar more or less

  • Once you get up to higher prices (above $40 or so), bidding an extra dollar -- $41 instead of $40 -- becomes a popular strategy.

How much people actually bid, smoothed

Now, let's apply a rolling average to the data - that's just an average of the last 4 dollar amounts put together. So the bar representing a $10 bid is actually the average number of bids placed at $7, $8, $9 and $10. All this does is remove the spikes at round numbers, making it easier to see how much people are willing to bid.

This chart is interesting because it clearly shows how people's interest in spending money drops off as prices increases.

So what?

There are some great things for both buyers and sellers to learn here.

For bidders

  • Take advantage of the round dollar amount psychological price points. If you only want to spend $5 on something, bid early in the auction. Remember, in a tie, the first bid placed wins. If you're trying to bid at the last minute, bid $6 instead of $5, or $11 instead of $10, to win against people bidding at round dollar amounts.

  • Remember that there will be more competition for lower priced items. If an auction is ending and you're trying to decide which lots you need to keep a close eye on, you should be more worried about losing the $5 plant than the $100 pleco (assuming you want to win them both equally, of course).

  • Use the proxy bidding system -- bid what a lot is worth to you, then go on about your day and skip the madness at the end of an auction. This is especially effective with high-priced items. As an example, let's say you really want a bag of high-end plecos. If you bid just a bit below the retail price, chances are no one else will outbid you (remember, the higher the price, the fewer other people you're bidding against), and you can focus on winning other, lower priced lots where there's more competition. If your bid ends up getting bumped up a bit, you still got them for less than retail, and if you get outbid, you at least made the other bidder pay retail (and you probably made a lifelong friend out of the seller).

For sellers

  • Don't put $100 worth of shrimp in a single bag - you'll be priced too high for most people, decreasing competition. You'd do better to split that into multiple lots (unless you're selling a single fishbone pinto shrimp for $100, in which case cutting the shrimp in half is probably not going to encourage bidders).

  • Put a bit of extra stuff in a given lot to encourage people to bid just a bit more than the round number. Once you've broken the psychological barrier of $15, maybe someone will bid $19 on it?

  • There's no magic "right" number to value each lot at, because every item is worth a different amount. But, look at the smoothed chart above to see how big your target audience is. The cheaper the bag, the more people will be interested.