Taking Aim at Auction Sniping

“Your bid is still the highest as the auction is about to close.
You wait excitedly by your computer expecting to be notified that you’ve won,
but … somehow you’ve lost. In the last seconds of the auction a new bid has
appeared, too late for you to respond. You’ve been sniped.”

– from the AuctionSniper.com Web site.

Auction sniping — the online auction crowd loves it or hates it, and
sometimes both at the same time. The technology, which developed along with
the success of companies like eBay , has been around for a
while now and in fact it has spawned a cottage industry of sorts.

Sniping technology essentially automates the process of placing bids on
Internet auctions. It can put your bid in during the last few seconds of an
auction. The user gets to mask his or her interest in the item being
auctioned off, avoid a bidding war, and then swoop in at the last second to
scoop up a bargain.

The applications are getting ever more sophisticated and the stakes are
getting higher as the auction business has grown. Most sniping apps and/or
services require the user to fork over a piece of the action – albeit a small

These days, outfits like eSnipe, which is getting ready to release
v3.0 of its eponymous product, are even hiring PR types.

Lots of other small companies are in this space, too, including Auction Sniper, AuctionStealer, AuctionBlitz, AuctionTamer, Bidnapper, HammerTap with its HammerSnipe product,
an outfit called iSnipeIt and no doubt a number of others.

Some offer multi-auction site tools. Some even cover international sites and
have built-in currency converters.

Sniping is an online-auction cultural phenomenon, according to Ina Steiner,
editor of auction info site AuctionBytes.com. It doesn’t exist in
real-world auctions, which are usually short and sweet, unlike online
auctions, which go on for days. Online bidders can get shareware programs or
subscription-based services — programs you load on your computer or
outsourced services that will place bids for you.

Some of the outsourced services have high-speed connections that they claim
allow them to place bids just seconds before the end of an auction.

Is it fair? Probably not if you’ve been sniped. But there are anti-sniping
techniques, too — and some sellers have reportedly found they can buy
merchandise using a sniper app or service, then turn around and sell it for
more on the same auction site.

How auction giant eBay fits into the sniping…

eBay itself offers a proxy bidding system that is not necessarily designed to
nip snipers in the bud, but does help.

eBay users, when they make a proxy system bid, are given the option of
entering the maximum amount they are willing to pay for an item. The maximum
amount is kept confidential from other bidders and the seller.

The system places bids on your behalf, using only as much of your bid as is
necessary to maintain your high bid position (or to meet the reserve price).
The system will bid up to your maximum amount.

In essence, you decide what the item is worth to you. You don’t have to keep
coming back to the auction site and, eBay says, “you could pay significantly
less than your maximum price.”

What is eBay’s corporate take on the sniping phenomenon?

“Many eBay users have very strong opinions about sniping tools. Some users
love the software packages that are available and others curse their
creation,” eBay spokesman Kevin Pursglove told internetnews.com in an e-mail

“I understand there have been a number of sniping programs produced over the
years. Some are still around and easily available and others have
disappeared,” he said. “The decision to use a sniping program is left to each
user. eBay takes no position on the individual packages.”

A spokesman for one of the sniping sites told internetnews.com that eBay
could easily thwart sniping by changing its policy and/or technology, but
snipers are placing millions of dollars worth of successful bids, and eBay
gets a cut on each one.

“The analogy I use is a little bit like the scavenger fish that swim with
sharks,” the spokesman, who wished to remain anonymous, said. “The shark gets the big bites, and the smaller
fish get the little bites. There is risk in swimming with the sharks, but the
rewards are there if you do so.”

Should eBay ban sniping?

“No,” said Rodrigo Sales, CEO of San Bruno, Calif.-based AuctionWatch.com, an operation devoted
to helping small businesses make money at online auctions.

“I’m in favor of sniping, particularly when the auction site (like eBay)
forces a fixed end date to the auction,” he told internetnews.com. “Some
sellers favor this approach because they can realize higher prices.” Other
auction sites extend the bidding period incrementally at the last minute, so
that the auction doesn’t actually end for 30 seconds or a minute or so after
the very last bid.

In fact, the last minutes of an auction can sometimes see multiple snipers at
work, and a buyer may see the bids jump by 50 percent or more in the closing
seconds, Sales said.

“I’d rather have sniping software out there, because otherwise a buyer might
not be at the computer when the auction closes.”

eSnipe’s new v3.0, due out next month, includes some features that users have
been asking for, said Jerry Grasso, a spokesman for the Newport Beach,
Calif.-based company.

One is outbid notification. eSnipe will check once before your auction closes
to see if you’ve already been outbid. The interval can be set by the user,
from 10 to 90 minutes before the close. Another new feature is bid groupings
– primarily created for commodity item buyers

Grasso also said that all eSnipe Web servers are co-located in the same data
centers as eBay servers so that the proximity is that much closer and the
customer’s “chances of success are focused at the most micro level.”

eSnipe’s bid placing engine, Rovatron, places more than 12,000 bids a day and
over 15,000 on Sundays, and Grasso says the company has 100,000 registered
users, placing about $1 million a day in bids on eBay. The company —
essentially a one person operation run by Tom Campbell with a virtual staff
— gets 1 percent for each successful bid by a user.

“By its nature, online auction bidding is an emotional experience and the
enthusiast is always looking for tools that improve his chances for winning
and adding to his collection,” says Campbell.

And — you guessed it — Campbell bought the company about two years ago in an
eBay auction, using sniping technology.

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