| The act of Shill Bidding is condemned by | | | | by the terminology that has been thrown |
| most who partake in the pleasure of | | | | around in this article. In the interest |
| online bidding. This unforgivable | | | | of ensuring that there is absolutely no |
| attempt of artificially raising prices | | | | confusion, let's take two steps back and |
| on auction items is not only cheeky, but | | | | clarify exactly what an 'auction' is. |
| deviously self-serving. | | | | An auction is when an item is listed for |
| To fully understand the concept of shill | | | | sale (more specifically, for bid) with a |
| bidding, you need to take a step back | | | | set starting price and in some cases |
| and ensure that you comprehend the | | | | have a reserve price where the buyer is |
| business of auctions - and for the | | | | required to place bids according to the |
| purpose of this article, online auctions | | | | bid increment set in the auction. |
| specifically. | | | | Before we get ahead of ourselves, let me |
| An auction website is a platform which | | | | clarify that a bid increment is the |
| is best explained as being a virtual | | | | value by which each bid placed increases |
| shopping channel that enables sellers to | | | | during the auction, and a reserve price |
| sell their products to autonomous | | | | is the minimum price that a seller is |
| buyers. Many are of the perception that | | | | willing to accept for an item. A |
| the auction websites themselves are | | | | successful sale is concluded when the |
| responsible for the sales process, | | | | minimum required price has been met |
| including stock control, shipping of | | | | (otherwise known as a 'reserve' price |
| items and receipt of payment. This is a | | | | which is set at the seller's own |
| misconception. While an auction website | | | | discretion). |
| is a place of trade, the process is very | | | | Now that we have clarified the relevant |
| different to an e-tailer (i.e. online | | | | auction 'lingo' you can appreciate why |
| retailer) in that the stock that is sold | | | | most condemn the act of Shill Bidding. |
| via online auctions are sourced, sold | | | | It is regarded by most online auction |
| and shipped solely by the seller who is | | | | website owners as a deceitful and |
| making use of the online auction tool to | | | | underhanded tactic used mostly by |
| facilitate the sale. It is easier to | | | | conniving scam artists. Each auction |
| explain what 'Shill Bidding' is now that | | | | website will have their own set of terms |
| you know want an online auction website | | | | and conditions, however most reputable |
| is. | | | | online auction websites have a strict |
| Quite simply put, Shill Bidding is when | | | | policy against this sort of behaviour |
| sellers place bids (whether blatantly or | | | | and would usually blacklist any seller |
| under a disguise) on their own listings | | | | from using the site in future. In some |
| with the intent to raise the bid price | | | | countries, shill bidders have been |
| in the hope that other bidders would | | | | criminally prosecuted for Shill Bidding |
| feel forced to bid for that item at a | | | | where such prosecutions have resulted in |
| higher price, thereby artificially | | | | both misdemeanor and felony convictions |
| inflating the perceive market value or | | | | and large penalties including fines and |
| desirably of the product that is on | | | | restitution of damages. |
| auction. | | | | Online marketplaces rely heavily on the |
| In some instances a relative or family | | | | integrity and reputation that is |
| member living with the seller may really | | | | reflected in its community in order to |
| want to buy the item that is being sold. | | | | become and remain successful. Shill |
| The reality however, is that these | | | | Bidding can destroy the credibility of |
| bidders are in a situation where they | | | | such marketplaces very quickly. Not |
| are usually able to communicate directly | | | | only does it damage the trustworthiness |
| with the seller, thereby creating a | | | | of the website itself, it completely |
| unique scenario that is unfair to other | | | | distorts the bidding process and hurts |
| bidders that do not have direct contact | | | | the buyer. |
| with the seller. It would therefore not | | | | Online auctions are certainly not doom |
| be fair if these potential buyers were | | | | and gloom. In fact, one of the beauties |
| to bid on the seller's price in an | | | | of selling products in an auction is |
| auction. Should a family member or | | | | that you allow the market to determine |
| friend genuinely be interested in | | | | the true value of a product, based on |
| purchasing the product, the seller | | | | the demand and desirability of that |
| should resort to listing the item as a | | | | particular item, rather than dictating |
| straight-forward sale with a fixed price | | | | to the marketplace what the price should |
| (usually called something like a 'Buy | | | | be. Very often this price exceeds the |
| Now' on the online marketplace). This | | | | seller's expectations - as what the |
| removes the risk of misleading other | | | | seller may have regarded as trash may |
| potential buyers about the market value | | | | very well be considered a treasure to |
| of the product, as the price is | | | | the buyer, who will quite happily pay an |
| specified and can therefore not be | | | | above market price for the simple |
| inflated at any point in time. | | | | purpose of becoming the new owner of |
| By now you may feel a little overwhelmed | | | | that rare find. |