Inexperienced eBay Buyers Make Costly Mistake

People new to buying through online auctions often bid higher than they need to.

One costly mistake novices make is neglecting to consider a seller's reputation when setting their price. They bid the same amount, regardless of whether the seller has any positive feedback from previous customers.

Experienced bidders know to bid much less in auctions where the seller hasn't yet built a reputation. In one study of Apple iPhones sold on eBay, winning bidders paid $14 US less for their phone, on average, when they bought from sellers with no feedback.

Sellers new to auctioning items on eBay begin with no feedback from buyers and their lack of reputation raises the risk that a transaction could go sour. As sellers gain satisfied customers, they accumulate positive feedback. Once they've established a good track record, sellers earn higher bids.