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I thought someone here should point out how schill bidding works and why eBay does nothing about it (when it is so easy for them to detect).
Schill bidding is where the seller uses another eBay account to push the price of their own items up, by bidding on them themselves. Because it is SO EASY on ebay.com to open a new account, they can open many. EBay say they combat schill bidding but they actually encourage it, because schill bidding pushes up prices and means more commission for eBay. However, some people think schill bidding is self-defeating, that it can backfire. Schill bidding can never backfire on eBay as it stands right now and you need to know how sellers win-win; once you realise this, you will NEVER bid on eBay ever again (if you have a brain).
These are the schill bidding scenarios
1) Used early on, it can generate movement and a desire amongst lemming buyers to bid.
2) Used mid auction with a high schill bid, it will tempt certain buyers to keep bidding until they beat the other (fake) buyer.
3) Used at the end, the seller can push the price right up to the maximum bid by a real buyer, just by bidding a huge amount which will win the item. This practice does not back-fire at all because a) the seller can then make a second chance offer to the highest bidding real buyer (at their maximum bid) and if that buyer does not take the offer, the seller simply relists the item "Relisted because of non-paying buyer" and then use another ebay schill account to bid just under what the real buyer bid; knowing that all the factors previously described will almost certainly mean they sell the item at above what they should / could normally. Because eBay give relisting discounts and cancel fees for non-payment, the seller does not pay any more.
4) Schill bidding allows sellers to go without paying extra for high starting prices and reserves. EBay turn a blind eye to this because they know they will make more commission from an inflated sale price.
This practice is RIFE amongst seasoned sellers on eBay. If you buy from someone with a Top-Rated Seller rosette from eBay, you are nuts BECAUSE they know the game more than anyone else and almost certainly are schill bidding.
EBay can EASILY detect schill bidding simply by comparing what are called IP addresses and cookies of the seller and bidders. It is such an easy technical aspect; ebay can easily automate it so that suspicious bids get flagged. All a seller tends to do is have two browsers (say one Internet Exploroer and one Firefox); then use the second one to create new eBay accounts and schill bid (simply clearing "cookies" each time). However, the seller will still have identical or very similar IP addresses for both browsers, so eBay could if they wanted to pick up on this automatically and deal with this fraud; yes, it is criminal fraud.
Why don't eBay do this? Because they do not want to; $ is king.
Trust me, if you are a buyer, probably around half of what you buy on eBay has been bumped up in price; it really is not worth buying on eBay at all.
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eBay schill bidding explained Crooks (sellers) and eBay win, buyers lose.
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Posted 16 September 2009 - 05:01 AM
I must admit, I got asked several times by friends with items on eBay yo bump up their prices by bidding a bit. I don;t think eBay can stop that, but I agree where people have multiple accounts for this purpose (amongst others) they certainly can, and it does beg the question why they don't stop it from going on.
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