Timing of Online Auctions
Some new research by Uri Simonsohn entitled Excess Entry into High Demand Markets – Evidence from the Timing of Online Auctions, throws some light on that difficult issue – when to end your auctions.
Competition neglect is the effect of people choosing actions which would maximise their profits in the absence of competition. In other words, they do not take into account the effect on competition on their sales, piling into the next big thing without thinking that everyone else is doing the same.
Simonsohn shows that competition neglect is rife in eBay, with sellers listing at high traffic times, without realing that they times produce lower sale prices. The research showed the following:
- At peak times e.g. Sunday evening, there is a lower bids to auctions ratio i.e. auctions get fewer bids. For example between 8 and 9a.m. 3.9% of items end but 4.7% of bids are placed, whilst between 5p.m. and 9p.m. 25% of bids are placed but 37.5% of items end.
- Consequently prices are lower at times of peak traffic
- Sellers ending during peak times tended to be the more experienced sellers, those who had consciously decided to end their auctions during the peak periods.
- An analysis of literature on eBay showed that either these books made no recommendation on ending times or recommended ending during peak periods. Even expert eBay sellers, it would appear, have not properly analysed the best eBay ending times.
I would recommend that sellers use products such as eSellerStreet, AuctionIntelligence or Terapeak to investigate their marketplace and experiment with the best ending times for that products – make not assumptions.