I wanted to add some more color to my interpretation of ebay shill bidding, and how the "auto-bid" mechanism also encourages "step-up", "gotta have it" bidding by newbs. The "auto-bid" deal is, ebay's software will automatically increase any bid a bidder places by nominal increments...say 25 cents on items under $10, 50 cents up to $25, $1 over $50. I don't know if those are accurate numbers, but the point is, suppose an item with a fair value of $25 is offered with a minimum bid of $5. First bidder shows up and bids $16. His bid enters as $5. Next bidder shows up and thinks the item is a steal at the apparent bid, $5, indeed is a good deal at maybe up to $12. So he enters his $6 bid, but the system "rejects" it and notifies him he has to step up higher. OK, $7, no problem. Oops, not enough. Now $8. Nope. $9. Nope, $11. Nope, $13. Nope, $15. Ahhh, the heck with this, I want it, so I'm bidding $20! Finally the system takes his bid. In his haste, perhaps he overlooks the $7 shipping charge. Now he is paying (if he wins) $27 for the $25 item. A long explanation for good old "auction frenzy". Later, maybe someone else will stick it to bidder #2. It also is a factor if the seller has multiple things for sale and will combine shipping. If a buyer REALLY wants something, perhaps they will overpay if the freight can be amortized over several won auctions. Such a buyer will feel better overpaying for any one auction since he is saving on freight, but of course he MAY NOT WIN the other aucs! Well, then he just overpays. ALL OF THIS works against you if you are looking to steal the item.
This used to happen to me all the time when I was buying sterling silver. I had a carefully constructed spreadsheet of what the average 7" and 7-1/4" and 7-12" fork weighed and what silver was worth and what 80% of it was worth. With shipping, I knew what my max bid could be and bid just under that much. I lost many auctions by 25 cents a net troy ounce of silver. I kept encountering the same crew of sharpened-pencil sterling hounds..5 or 6 guys....sometimes I would win, sometimes they would. Most of the time, I was working and working and working to get silver $1 under spot. When silver was $11-$17, it was marginally worth it. With silver at $27+++, that dollar was NOT worth it, it was too small a discount off fair value. At the same time, the other side of the coin (no pun intended) is that overpaying by $1 or $2 became much less of a big deal when the price got into the 20's. So many people didn't mind doing it. When silver frenzy really got going, well over $20, it simply stopped being possible to buy under spot. Some people just don't consider the shipping costs...and of course with sterling silver forks etc; if anyone is looking for an actual replacement for one they lost or dropped into the disposal and wrecked, they will massively outbid a scrapper. Let us not forget that if you do this 50 times, one time, you're going to get skunked. And you can get skunked by finding out that the 7-1/4" forks you just bought weigh 41 grams instead of the 45 grams you expect, they are a light style. So the nickels and dimes you saved working like mad to buy teeny bits under spot can easily get wiped out on one bad deal. By the time real silver frenzy set in, I stopped being interested in acquiring sterling forks as a means of hoarding silver. It was a PITA. It was cheaper just to buy .999 rounds and bars on sale and get what the heck I wanted to get in the first place!
At the risk of sounding like a philosopher, that statement in my prior post "people do not buy drills---they buy holes" is very much worth spending some time thinking about. Outside of necessities; food and shelter, for discretionary items, it is almost impossible to buy the actual thing you walk out of the store with.
