eBay: In Praise of the Perfect Market

The online auctioneer brings the full thrill of the hunt to the Internet. Who could ask for anything more?

By Patricia O'Connell

Some people hate to shop -- it's something they do only when forced by need or the looming advent of a holiday or a loved one's birthday. Then there are those of us who see shopping as the civilized version of the hunt -- with a well-priced purchase as the modern equivalent of the capture.

I love everything about shopping -- the browsing, the thrill of stumbling upon an unimagined treasure, the fantasizing about how some new item is going to enhance my life. And few things give me as much satisfaction as getting something that I truly love (and sometimes, even things I need) at a bargain. Throw in the competitive element of buying at auction, and the purchase can give me as much pleasure as what I bought.

That's what's so great about eBay (EBAY ). And I mean pure "Bid Now" eBay, where you're bidding against other people, all warming to the hunt as much as you. Oh, you can also "Buy It Now" on eBay, where you pay a fixed price for an item and it's yours. But that's strictly for the faint of heart, in my view. (See BW Online, 8/27/04, "eBay: Who Needs It?").


  I started shopping on eBay a little more than two years ago. And I must confess that in the early days, I succumbed to Buy It Now's promise of instant gratification, the lure of the sure thing. I was afraid of bidding, of losing out on something I coveted -- or worse, being bid up so high that I would end up paying much more than I had intended or hoped to. But then I started noticing that many, many items up for sale -- with or without the Buy It Now option -- never attracted any bids. Was I jumping the gun by agreeing to a flat price?

It was easiest to judge, of course, when there were multiple versions of the same item up for sale, especially from different sellers. Some would be offered strictly for auction, some with only the Buy It Now option, and then others offering both.

I decided to start bidding on things, reassuring myself that, with at least some of them, Buy It Now was an option. But I honestly don't remember a case where I felt that Buy It Now was worth it. Plus, I came to realize that wondering whether I would win was part of the fun.


  Have I ever ended up paying more than I wanted to? Sure. Have I ever experienced buyer's remorse? No. Because the auction process forces me to readjust my price points and recalibrate my desire for an item. I might start out thinking that $75 is the most I'm willing to pay for a vintage beaded purse to add to my collection. But if I'm being outbid, I have to decide if my ceiling was artificially low -- and how much I really want the item.

Have I ever seen something I really wanted slip into someone else's hands? Yes, but only because I wasn't willing to pay more than that other person. It wasn't worth it -- at least not to me. Indeed, eBay is often described as the "perfect market." And it's true. The site brings together buyers and sellers who would otherwise never enter each other's orbit. The auction adds another element to the market aspect: The thrill of constant change.

Some people may fear they'll end up paying too much if they go the auction route -- that they'll get caught up in the frenzy of bidding. Well, that's where discipline comes in. It's pushing your plate away when you're full, even though there's half a steak left. It's playing poker for nickels and dimes, budgeting your resources. And technology helps, too. eBay deserves enormous credit for how it has set up the bidding process. You decide what your maximum bid is, and your bid escalates to that level as needed. If you're outbid, you get an e-mail. Then you can decide if you want to raise your maximum bid or bow out. I've had occasion to do both.


  And it pays to do your research, just like you should when looking to buy anything that's more than a few bucks. How much do items in this category go for? What would you pay in a retail store, an antique shop, at a flea market, or from another collector? Whether you're bidding or buying, you need to have this kind of information.

For those who hate to shop, I guess Buy It Now works. They can get the task over and done with. How sad that these people don't know the thrill of the hunt, or the rapture of the capture.

O'Connell is assistant news editor at BusinessWeek Online

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