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Ebay a rip-off - according to MIT

Discussion in 'Off Topic [BG]' started by Bruce Lindfield, Feb 14, 2001.

  1. more than retail

    3 vote(s)
  2. about the same plus p&p

    2 vote(s)
  3. about the same including p&p

    5 vote(s)
  4. less than retail

    56 vote(s)
  1. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member In Memoriam

    A work colleague involved in ebusiness research pointed me to a study done by MIT. The study by MIT showed that the prices paid on eBay were only cheaper than retail 1.2% of the time. The study ended up in profit by buying webcams at retail and auctioning them on eBay, getting a higher price.

    So basically, people are getting "ripped-off" by ebay 98.8% of the time! Should we put this in a FAQ somewhere - as in if you are buying basses etc. from ebay expect to get ripped off or at least pay retail plus postage etc.
  2. DaveTomasi

    DaveTomasi Gold Supporting Member

    Dec 15, 1999
    Baltimore, Maryland
    When purchasing anything from anyone, caveat emptor!
  3. gweimer


    Apr 6, 2000
    Columbus, OH
    Agreed. A "flea market" is only a deal when you don't pay a lot, and a rip-off when you pay too much. If you don't know the difference, then shame on you, not the seller. I don't see Ebay going out and trying to force people to buy stuff.
  4. Acacia


    Apr 26, 2000
    Austin, TX
    as an eBay seller (not a gear seller). If someone ends up paying more than retail for something, then they have no one to blame but themselves. do research on any product before you buy it. there's tons of info out there.

    I have bought CDs and stuff that I thought were limited pressing, rare, etc etc only to find out I paid about 2-3 times too much. Oh well. I know better now. :D
  5. mikemulcahy


    Jun 13, 2000
    The Abyss
    I have actually done quite well, bought 2 crown power base amps for less than 500 each, they were brand new.
  6. I've sold a bunch of stuff, never bought anything. I sold a '71 P-Bass an Ibanez sr800 and an SWR Studio 220. I got about book value for the P, well below book value for the SWR and WAY above book value for the Ibanez! So the deal you get really depends on the general interest on the item or on whether anyone really wants something. There are good deals to be had, you just gotta find'em. I would never pay anywhere close to retail price for anything on eBay, which, now that I think about it, is probably the reason I haven't won any auctions:D! It's a seller's market these days. My advice would be Caveat Emptor. I know the prices people are paying for '70s 3-bolt jazz basses in marginal condition are way above book value.
  7. Christopher


    Apr 28, 2000
    New York, NY
    I wouldn't say ebay is a ripoff; the prices in part reflect the liquidity of the market for certain instruments, the quality of information about them, and the risk buyers face in buying sight unseen. The market for Fenders, for example, is large and fairly knowledgeable, so ebay bids usually wind up at or near street prices. For alleged "vintage" or collector's items, the price a often goes over retail as buyers place premium on scarcity.

    The best bargains on ebay are those for which buyers can't readily impute a price, ie. those whose name and quality aren't well known. To bargain hunt, you need generally to steer clear of names like Fender, G&L, Warwick and the like. (Even Carvin, long the whipping boy of the used market, is coming up in terms of price.) Of course, lesser-known instruments are frequently subject to a phenomenon known as "winner's curse", where a lack of knowledge and restrain can lead to overbidding. This sort of ignorance is fairly detectable, though; if someone bids on the first day of a 10-day auction, it's likely that the closing price will be more than the instrument's worth.

    Some instruments, despite being well known, exist in relatively illiquid markets, eg. 8-string basses, electric uprights, high-end jazz archtops. A lack of willing buyers depresses the price; you can pick a lot of these up for a good discount.

    The last category, risky purchases, probably explains the low price of the Crown amps (as well as some nice acoustic guitars I've passed up). Sellers must discount in order to entice buyers sight unseen to items whose durability, craftsmanship and reliability may vary significantly, even within a single product line. The items may indeed be perfect and brand new, but I have no way to verify that through ebay.

    I have noticed that bargains are harder to find now as ebay itself becomes more widely known and attracts a greater number of knowledgable buyers.
  8. The only thing I've ever bought through e-bay was an out of print Jethro Tull CD. Yes it cost more than the original retail value, but I've been try to find a copy of that CD for years and have not been able to find one elsewhere. I got it for $17.60 for a used copy. But now I have it.

    I suppose if you are well informed about what something is worth and are willing to pay a bit more for the convenience of actually having found the item you're looking for, I see nothing wrong with it.

    Auctions have always had a reputation for inflating prices of desirable items, while informed buyers can make good deals if they set a limit for themselves before bidding. But if you really want something specific, whatever you are willing to pay for that item is an aceptable price.

    I guess, in short, the way to get a good deal in an auction, is either that no one else wants the item all that badly, or that you don't want it that badly - then the price won't be driven up. Otherwise you'll pay a high price for an item you want badly - but you'll have the item!
  9. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member In Memoriam

    Well this is what I hear a lot on forums like this - people saying ebay is great because they've managed to get "over the odds" for something they've sold. But basically it means someone, somewhere has been ripped off.

    And people are just naively optimistic - like in the UK people think they're going to win the lottery, whereas the chances are millions and millions to one - you have more chance of being hit by an asteroid than winning the lottery, but people still do it.

    I think you have to accept that people are always looking for "something for nothing" and unless you're Brad Johnson, it's not going to happen! ;)

    I think they should be made to post the statistics on how much over retail, or the going rate, people pay on average, on every page on ebay!
  10. john turner

    john turner You don't want to do that. Trust me. Staff Member

    Mar 14, 2000
    atlanta ga
    both conklins that i got on ebay were screamin deals.

    there's no substitute for knowing what you're doing, though. if someone is willing to spend us$5000 for a playstation 2, then something's wrong with THEM not the system.
  11. seville8


    Sep 8, 2000
    I must say that I use e-bay and I have gotten some really good deals. You have to know what you want and what it's worth. I bought a bass amp that was tagged 250.00 at the music store Ibought the exact amp with the tags still on it for 100.00 including the shipping and it works great. ..I usually set my high bid for what I want and if I lose it ..Oh,well..Some things get out of hand just because people get into a bidding war and in the heat of battle they over pay..
  12. Blackbird

    Blackbird Moderator Supporting Member

    Mar 18, 2000
    I think that the findings of this study point out an entirely different fact: That people don't have a clue how much things cost. People pay what they're willing to pay, eBay has nothing to do with it, they're just the venue.

    I have been on eBay for over a year. I have since gotten:

    A Peavey B-Quad-4 for $800
    A PBC 6-string for $800
    A Tokai Jazz for $300
    A Brand-new copy of Standing in the Shadows of Motown for $13
    Scott Henderson's old 5-string Jazz for $400 (Warmoth parts with Bart pickups and TBT preamp. Sounds killer)
    A Samick Stingray for $100
    A GK 400RB head for $200
    A Peavey 210TX, also for $200
    Both Rocco Prestia's and Jaco videos for around $40. I then sold the Jaco video and recouped 70% of the purchase.
    7 (Yes, seven) instructional videos, including both Stuart Hamm videos for under $70.

    Some of these I have kept, others I have sold on or traded (I gave up the PBC to get my Sonus 4)

    In short, if you shop smart, you can come out ahead. You just have to shop savvy and not be greedy.

    Will C.:cool:
  13. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member In Memoriam

    My colleague gave me some more background on why people are prepared to pay more on ebay and don't feel ripped off even when they are. These are from his conference notes :

    Dan Ariely
    Dan is a professor at Sloan Management School and works with the Media Lab. Part of his current work is looking at bidders’ actual behaviour in online auction as against their ideal, or imagined, behaviour.
    Dan surveyed the bidders on the eBay auction site. Few people felt that they had paid too much and were very disappointed not to win. Dan decided to research in this area and started with Rose Bowl tickets, which is the final of the American college football competition. The tickets are sold at a fixed price and touts then sell them on at a market based price.
    People surveyed claimed they do not care about the starting price of the auction, but they do care about the reputation of the seller: in actual fact their behaviour is the exact opposite. One characteristic is that the more bidders are in the auction, the higher the final price.
    Another characteristic is that people say that they compare prices a lot. In actual fact the selling prices on eBay are cheaper than commercial sites just 1.2 per cent of the time. To test this, Sloan sold items at auctions: some of these had a low starting price (say 10 per cent of the retail price) and some had a high starting price (about 50 per cent of the retail price). Despite identical items being auctioned, a high starting price led to a higher price at the end. In fact Sloan was making a small amount of money just buying items off the Web and then auctioning them! Dan even had people contacting him after an auction saying they missed the auction, but did he have any more!
    Two possible reasons for the option the goods having higher prices is that there is a lack of comparative prices and the ‘endowment effect’. Dan noted that when they auctioned at the same items with a high starting price and a low starting price at the same time, then the selling price was lower for the item with the higher at starting price. People are competitive and this leads to the "endowment effect". Once people believed they possess an item (for example they currently have the highest bid) then that they will keep bidding to avoid losing the item
    One critical characteristic of online auctions is that one cannot see other bidders in the audience nor those who are observing and not bidding. The hypothesis is that the peer group becomes less rational, as it self-selects when the price bid rises and competitors drop out.
    Most online auctions are "second price" auctions, where the winner pays the price of the previous bid. However the stopping roles vary. eBay closes the auction at a specific time, while amazon closes at a specific time only if there have been no bids in the previous, say, 10 minutes. eBay tends towards a higher closing prices, possibly due to the endowment effect and the limited time window.
  14. muggsy


    Dec 14, 2000
    Alexandria, VA
    I've bought and sold numerous times on ebay over the past few years, and I've always been happy with the results. It's very simple -- if you do your homework, you won't get ripped off. If I was looking to buy a new bass, or a CD, I'd try to find my best price from a legitimate dealer before bidding, so I'd know when to bow out. There are additional risks inherent in the process, but those can be minimized as a seller by insisting on up-front payment, and as a buyer by checking the seller's feedback ratings.

    I also question the utility of a conclusion that buyers paid less than retail only 2% of the time, because everything I've bought and sold on ebay has been used, and there's no generally accepted "retail" price for used merchandise. I've purchased several CDs that were out of print, and I paid what they were worth to me, which in every case was less than the retail price of a new CD. If it was something really rare and I decided I couldn't live without it, I might pay more, but would that mean I got ripped off?

    I bought a used American Deluxe p-bass last summer, but first I watched the auction prices for a couple of weeks. That showed me two things: (1) what they were selling for; and (2) that they came up for auction pretty frequently. I bid on two basses that I lost out on before I got mine, but in each instance I stayed in until the price exceeded what I was willing to pay. I got mine for at least $500 less than a new one would have cost, and I'm thrilled with it even though I've seen a couple sell since then for less than I paid (of course, I've also seen many sell for more). Unless you're dealing with new merchandise readily available elsewhere, the "value" of this stuff is extraordinarily subjective, so I'd take the results of this study with several grains of salt.
  15. Slater

    Slater Leave that thing alone. Supporting Member

    Apr 17, 2000
    The Great Lakes State
    I think the only way someone truely gets "ripped off" on eBay is when a seller misrepresents their merchandise.
    As long as the auction is presented in an honest fashion, then it's, as Dave Tomasi posted, "caveat emptor!"
  16. I buy and sell using ebay and have to say that I have paid better than retail prices on everything I've gotten and sold things for more than I would have gotten as trade or from a consignment. There have been items that have gone into bidding wars that I wisely stayed out of but watched from the sidelines.
  17. Brooks


    Apr 4, 2000
    Middle East
    I did quite well too. For example, if you check on gbase.com, you will find '79 Gibson Artists from $1800 to $3200. I got mine off of eBay, in perfect condition, with hard case for $825.

    Similarly, Gibson LP Artists go for $1250-$2400. Got mine, also with hard case for $800.

    Or how about a carved, hollow, all maple Hohner fretless from early 70's, with all-maple neck with partial lines (under E string only) for $325?

    I missed out on some great deals too...like a black Gibson RD Artist, complete, great condition that went for $350. Seen them on gbase.com for anything from $795 to $2000.
  18. virtual.ray


    Oct 25, 2000
    I got a new condition in box Boss GEB-7 Bass EQ pedal on ebay for $40 shipped. The closest I found it new would have been $74.50 W/tax,so I saved about 45%.But I've seen stuff end up selling at or above what I know I could get it for new more than once.
  19. Phil Smith

    Phil Smith Mr Sumisu 2 U

    May 30, 2000
    Peoples Republic of Brooklyn
    Creator of: iGigBook for Android/iOS
    I offered a brand new in the box Sharp minidisc player/recorder here to talkbass members for $160.00 and it didn't sell. I put it on Ebay and got $220 for it. Go figure! I think the proxy bidding feature causes people to bid more than they would if the feature didn't exist. They will attempt to bid high enough in the event that they won't be around to monitor the auction until it closes. When a particular item is scarce and interest is high that item is always going to fetch a good price, for some reason on Ebay the minidisc player was in demand, partly because it's no longer available in stores. As with anything one has to do their research and get as un-emotional as they can about an item when they decide to vie for it at auction. The best deals I've gotten on bass gear were from Guitar Center, BassGear.com and Harmony Central.

  20. My motto is, and has always been......

    Don't be in a hurry to buy anything..

    You'll end up paying too much!

    Don't be in a hurry to sell anything..

    You won't get as much for it!

    Except for my string liquidation sale, I just want to sell them!!!!!!!!!!!!!!!!!

    (Cheap plug)(Cheap plug)(Cheap plug)(Cheap plug)

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