Tuesday, January 6, 2009

Saving Money Doing What You Like to Do #1 - Five Easy Ways to Save Money Buying on Ebay

This is the first of what I hope will be a long and informative series of posts dealing with issue of how to do what you already like to do for less money.

Ah, Ebay. In fifteen years, you have gone from not even being a real word to a monolith in the American and global economy. Whether looking for tennis shoes or a shark's tooth, theatre tickets or croquet wickets, savvy shoppers the world over come to Ebay frequently to do business with normal folks and larger companies around the world.

Nevertheless, Ebay can be a daunting experience for newcomers, and one of the most frequent questions asked about Ebay is "How can I get the best value for my money?" In the five points below, I hope to give some helpful tips and tricks to ensure that you can know the excitement of finding that perfect deal. Some of my tips may be looked upon as obvious by veterans, but I believe that they bear repeating here.

1) Do your Research - All right, so you've fired up your browser, typed in ebay.com, typed, say, "Hello Kitty Doll" into the search bar, and you are super excited at seeing the exact doll that you want for $25 under the "Buy It Now" option. You hurriedly click "Buy It Now" and proceed through checkout. Congratulations! After you've bought it, you peruse some of the other listings, only to find that many of the other auctions are selling the same dolls for only $10! Alas! Though you got exactly what you wanted immediately, you didn't get the best price.

Whenever you search for something on Ebay, it is a good idea to first make sure that you have the items sorted by "Ending Soonest." For some reason, Ebay tends to default to the "Best Match" option, which I don't find particularly useful; I can see that I have received a page of exactly what I was looking for: in what sense is one option better than another within this view?

Once you have them sorted correctly, I recommend looking over at least three or four of the search pages. What you should look for is how much of price difference there is between similar items. Once you see the price difference, you should evaluate why there is a price difference. As an easy example, the prices of items ending soonest are usually quite a bit higher than items just listed; this is obviously due to the fact that items ending soonest have received multiple bids while just listed items probably have no bids at all. An application of this principle is in my second point.

2) Watch Shipping Costs - I hate the feeling (I have experienced it, and I am sadder but wiser for it) of thinking I've gotten this amazing price on an item, only to realize that I actually paid much more due to a ridiculous shipping price. Sellers are free to charge whatever they want for shipping and handling, and it is not always reasonable.

In the month leading up to Christmas, Ebay ran this series of heavily discounted items that could be great presents for the family, and, as a cherry on top of the sundae, they offered free shipping. If there are two similarly priced items from sellers that you trust, use the shipping price as a tie breaker.

3) Wait Until the Last Minute - Ebay was built on the principle that you wouldn't have to be there at the auction's end. You could simply put in a bid of the price that you would like to spend no more than, and the bid price would go up incrementally as other people bid. When I have done this in the past, I find that my the final price ends up being curiously close to my maximum bid. I'm not going to suggest that all sellers (under different identities) bid up their prices to make sure they get the most money, but I wouldn't be surprised to find out that it does happen from time to time.

With that being said, I have found that I frequently am the most satisfied with the price I get in an auction if I sit and watch it for the last five minutes before the auction closes. With a minute or so to go, I swoop in and bid the price up a couple dollars. Sometimes I get it and sometimes I don't, but when I do, it is an exciting time.

I did this when I purchased my wedding gift for my wife; I saw a great price on a pair of diamond earrings in an auction that was ending in a couple of days. Fortunately, over those days, the price didn't rise that much. In the last couple minutes, another bidder and I got into a bidding war, and the price raised a couple hundred bucks, but I still came out ahead, and I ended up with a great deal on a pair of earrings. I paid about $800 for about 1 carat total weight of diamonds of vs2 quality, which, if you know anything about diamonds, is an absolutely amazing deal. In looking at these diamonds, however, I had to make a decision that relates to my fourth point.

4) Evaluate Risk versus Reward - One of the issues that affects price in an Ebay auction is the seller's rating. How credible is he? Does he usually sell what he says he would sell, or is the quality different than he listed it? How many people has he sold to? Do I trust a seller more who has 10,000 happy customers or one who has 15 happy customers?

In the diamond earring auction above, I realized the price was low because I was buying from a relatively new seller on Ebay. He only had around 200 people he had sold to. Most of his customers had been happy with his service, but a few were upset. Nevertheless, I knew I had about a thousand dollars to spend, and I knew that Paypal at the time offered about that much in buyer assurance (ie, if a seller ripped you off, Paypal would pay you back). With that in mind, I decided to give the guy a shot. I figured that even if the guy was a bold-faced liar, I would get my money back.

The earrings came quickly, and I hurriedly opened them in excitement to try to gauge just how excited my wife would be to see them on our wedding day. As I held them up at an angle to the light to see them shimmer and shine, I was a bit dismayed. The seller had advertised them as VS2 (which means that they should be absolutely eye-clean; that is, I should not with my naked eye be able to see any blemishes in the stone), but I saw blemishes. One stone was pretty good, but the other was really bad and, in my unofficial opinion, should have been rated as an I (four gradings below VS2, and, therefore, much less expensive). As you can imagine, there was an angry phone call placed. Fortunately for me, the seller was willing to correct his "mistake" (though I suspect he likely ripped other people off who hadn't studied jewelry as much as I had), and he sent me rings that were closer to what had been advertised. You can imagine how excited I was when I took them to be appraised and I found that they were worth, conservatively, $2,400! Obviously, the reward in that situation very much overshadowed the risk.

5) Be Patient - Please note that I didn't just jump at the first diamond earring deal I found on Ebay. I would say I looked for two months before I came across that opportunity, but when I found it, I was so happy that I had waited. Similarly, if prices seem high for whatever you're looking for right now and you have the gift of patience, you can rest assured that you will be able to find a better deal in the future. If you know that you need to buy an expensive gift for someone, try to give yourself some time to find the right price for your budget.

Phew! That was a lot more than I had anticipated writing! In any case, I hope that you have found the above tips useful. If you have any questions, please leave me a comment.

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