Now you're ready to make your first bid for an old toy train having gained knowledge of the different characteristics of particular brands and gauges.  So you ask yourself, are price guides a good predictor of eBay prices and bidding?  The answer is maybe.

Let's talk strategy for a moment before getting into the particulars of reserve prices and buy it now offers.  As a buyer you are obviously trying to get the best item for the least money.  Normally you would look at specifications, examine the product and compare prices before buying something.  In the framework of an on-line auction the second criteria is usually unavailable unless you make special arrangements with the seller.  You are usually provided with a picture with a brief description to allow a cyber-examination.  Specifications are useful when you are buying new, yet they fail to take into account the elements of wear and tear when potentially purchasing an antique.  Price comparison through the use of price guides is useful for purposes of providing a starting point, yet they lack the key element of market immediacy experienced in on-line, or for that matter, live auctions.

So what is a newbie to do?  Create a favorites list in My eBay and follow it for a few days.  Make copies of a few auctions that have closed and keep them in a book for later reference.  After you have followed the market, pick one item, like the Lionel 248 locomotive I mentioned in the last article and come up with a price range using the price guides and your market study.

Do you have your range prepared?  Now it gets interesting!  Remember we weren't born with an owners manual, we improve in life through education, environment and life experience.  Education in the on-line auction marketplace starts with the bid button.  Lets say the #248 is listed with a minimum opening of $9.99 with a reserve.  Your research based upon the price guides and market research tells you that a #248 in good condition is worth from $125 to $150. Try a bid that will tell you something about the reserve (that is if the seller didn't give you a hint in the description). By that I mean start low, but high enough to see if you trigger the reserve.  If you do your bid will be shown and the listing will show reserve met.  You will have a tendency to bid low and in small increments as a beginner, but will quickly get a sense of the market and get closer to knowing the probable reserve based on condition and rarity as you make a few purchases. Once you meet the reserve you and the whole world know that the current bid will buy the item unless you are outbid. Let's say you bid above the reserve.  Ebay will only show the reserve price and will keep your maximum bid confidential.  If your maximum is exceeded you may make other bids consistent with your research. With experience you may want to bid just below what you believe the reserve price to be so you don't show your cards too early.  If your below reserve bid is still the highest bid near the end of the auction you can try too exceed the reserve then to discourage sniping (last second bidding against you as the auction ends).

Let's say there is no reserve and the minimum bid is $99.99.  Well you may say that the strategy is easy, bid $99.99.  Well if the item is worth at least 125. you will likely be outbid and may lose the item if you are not following the auction at its conclusion.  You are better off  bidding $125.00 since eBay will only bid the minimum required to open and keep confidential your maximum bid (proxy bidding).  As you follow the auction you may be outbid, but you will probably have the chance to raise your bid and still win the item. One word of caution, never make a maximum bid you are not comfortable with or you may be forced to pay that price.  Remember you have no control over other bidders and sometimes another's price tolerance will be greater than yours.

Well that covers potential strategies with or without a reserve price.  Buy it now is exactly that, a chance at instant gratification (with  a slight delay for shipping).  Remember the buy it now price will probably be at high market or even above.  That's the price for not having to wait for the auction to end.  In Part 2 we'll go into scenarios such as submitting a best offer and second chance offers.  Until then Happy Bidding!

timbuk2002

Caveat: This article is intended as a suggestion and any consequences of its use, such as successfully winning an auction, are the sole responsibility of the reader!

P.S. There are many great pricing guides: Standard Catalogue of Lionel Trains 1900-1942 amd 1945-1969 by David Doyle, Greenberg's Lionel Trains Pocket Price Guide, updated annually, and TM's Lionel Price & Rarity Guide Volumes One and Two.