WEBVTT - eBay Goes Corporate 0:00:04.160 --> 0:00:07.160 Get in touch with technology with tech Stuff from how 0:00:07.240 --> 0:00:13.640 stuff works dot com. Hey there, and welcome to tech Stuff. 0:00:13.680 --> 0:00:16.880 I'm your host, Jonathan Strickland. I'm an executive producer at 0:00:16.920 --> 0:00:20.239 how Stuff Works in a love all things tech. And 0:00:20.320 --> 0:00:22.680 now that we get all the cell of Brayton out 0:00:22.680 --> 0:00:24.880 of the way, we got the birthday cake cleared out 0:00:24.880 --> 0:00:26.920 of the studio, all the balloons are out of here, 0:00:27.280 --> 0:00:30.960 we can get back to business now. Before we started 0:00:31.080 --> 0:00:35.120 celebrating tech stuffs tenth anniversary, I was talking about eBay 0:00:35.159 --> 0:00:37.040 and I did a couple of episodes about it. So 0:00:37.240 --> 0:00:40.120 let's do a quick recap before we continue our story. 0:00:40.760 --> 0:00:44.400 eBay was created by Pierre A. Midier. Originally it was 0:00:44.440 --> 0:00:49.120 called auction Web and that was underneath a larger website 0:00:49.159 --> 0:00:52.319 called eBay that had other stuff on it, including an 0:00:52.320 --> 0:00:57.000 Ebola virus page. And a. Medier had created it as 0:00:57.040 --> 0:01:00.280 sort of a hobby. He had not anticipate did it 0:01:00.320 --> 0:01:04.479 becoming a business. He just wanted to create a fair 0:01:04.640 --> 0:01:09.240 market place for exchanges for auctions because he felt that 0:01:09.800 --> 0:01:11.919 there was a need for that and he had a 0:01:11.920 --> 0:01:14.640 cool idea of how to implement it. He had to 0:01:14.680 --> 0:01:18.880 start charging a small fee for successful auctions in order 0:01:18.880 --> 0:01:21.840 to offset his web hosting service. There was so much 0:01:21.880 --> 0:01:25.560 traffic going to auction Web after the first few months 0:01:25.959 --> 0:01:29.600 that his web hosting service said, Hey, we're gonna have 0:01:29.640 --> 0:01:33.080 to charge you for a business website as opposed to 0:01:33.120 --> 0:01:34.959 a personal one. So you're gonna have to pay two 0:01:35.040 --> 0:01:37.399 U fifty dollars a month in order to keep this 0:01:37.480 --> 0:01:39.880 site active. So in order to offset that, he started 0:01:39.880 --> 0:01:44.800 putting in a small listing fee for any successful auction, 0:01:44.920 --> 0:01:47.640 so if an auction completed, he would take a small 0:01:47.680 --> 0:01:51.400 percentage of that in order to offset those costs. But 0:01:51.440 --> 0:01:54.240 he ended up making enough money from auction Web to 0:01:54.360 --> 0:01:56.920 make that his full time gig, so he quit his 0:01:57.000 --> 0:02:00.840 day job and auction Web a k a a became 0:02:01.000 --> 0:02:04.360 his main job. It became his full time occupation. He 0:02:04.480 --> 0:02:06.880 brought on a friend to help run the business, and 0:02:07.000 --> 0:02:10.440 later they brought on Meg Whitman to run it. She 0:02:10.560 --> 0:02:15.360 became the president and CEO of eBay. Whitman prepared eBay 0:02:15.440 --> 0:02:18.720 for its initial public offering or i p O. That's 0:02:18.840 --> 0:02:21.320 when you list on a stock exchange and you sell 0:02:21.400 --> 0:02:24.200 shares in your company, and that i p O was 0:02:24.200 --> 0:02:27.560 successful enough to turn a medier into a billionaire, so 0:02:27.680 --> 0:02:31.760 he was wealthy beyond his imagining at that point. In 0:02:32.960 --> 0:02:36.000 about a year after the company went public, eBay had 0:02:36.040 --> 0:02:39.359 a site wide outage that lasted nearly twenty four hours 0:02:39.360 --> 0:02:42.079 and required a quick response from the company. I'll talk 0:02:42.120 --> 0:02:45.360 a little bit later in this episode about the infrastructure 0:02:45.400 --> 0:02:48.239 they created to try and prevent that from ever happening again, 0:02:48.800 --> 0:02:52.440 and some other quick backtracking that I need to do 0:02:52.560 --> 0:02:55.160 because I got up to two thousand two in our 0:02:55.240 --> 0:02:57.600 last episode, but I skipped over a couple of things 0:02:57.600 --> 0:03:00.600 that I think they weren't mentioning. One thing I did 0:03:00.639 --> 0:03:03.040 not mention in the last episode is how in two 0:03:03.120 --> 0:03:08.240 thousand eBay created a class it calls eBay University. This uh. 0:03:08.360 --> 0:03:13.040 This course teaches people the best practices for listing items 0:03:13.040 --> 0:03:15.480 on eBay, how to sell them effectively, how to create 0:03:15.520 --> 0:03:20.000 a business using eBay as a foundation. And this would 0:03:20.160 --> 0:03:24.840 allow people to leverage eBay while eBay also is able 0:03:24.919 --> 0:03:30.359 to get an advantageous relationship out of it, so it's 0:03:30.400 --> 0:03:34.680 kind of a symbiotic relationship. The user is able to 0:03:34.720 --> 0:03:40.160 expand their reach and use eBay's tools like marketing and 0:03:40.320 --> 0:03:42.640 listing and all this sort of stuff in order to 0:03:42.720 --> 0:03:45.880 get their goods out to a wider audience. So let's 0:03:45.880 --> 0:03:49.360 say that you actually have an antique store, and maybe 0:03:49.360 --> 0:03:52.880 you're antique store is on a little like it's a nice, 0:03:52.880 --> 0:03:56.200 little quaint antique store that's off a little road. You 0:03:56.240 --> 0:03:59.760 know you're you're going to only get traffic occasionally from that. 0:04:00.000 --> 0:04:01.600 People don't tend to go out of their way. But 0:04:01.720 --> 0:04:04.640 by using eBay, you could have your entire inventory up 0:04:05.000 --> 0:04:07.600 online as well, and even set things aside when you 0:04:07.640 --> 0:04:11.000 decide to auction off specific things in your inventory that 0:04:11.040 --> 0:04:14.560 could become your full time business. And you could use 0:04:14.600 --> 0:04:17.920 eBay's tools to market, to reach out to potential customers, 0:04:18.240 --> 0:04:20.799 all this sort of stuff. So there's a big benefit 0:04:20.920 --> 0:04:24.760 to the small business owner. But in turn, eBay benefits 0:04:24.760 --> 0:04:26.960 because of course it takes a small portion of all 0:04:26.960 --> 0:04:29.760 the sales. And of course there's also some other listing 0:04:29.800 --> 0:04:32.240 fees that happened these days if you're listing a lot 0:04:32.279 --> 0:04:34.800 of different items. I'll talk more about that in the 0:04:34.880 --> 0:04:39.320 next eBay episode. So classes at eBay University are actually 0:04:39.360 --> 0:04:42.520 held throughout the world. It's not a specific location that 0:04:42.560 --> 0:04:44.760 you have to go to, and they're led by members 0:04:44.800 --> 0:04:47.000 of the eBay community who have a lot of experience 0:04:47.040 --> 0:04:50.880 in this. Also in two thousand, eBay acquired another business 0:04:50.920 --> 0:04:54.039 called half dot Com. Half dot com allowed people to 0:04:54.080 --> 0:04:59.279 sell certain things in limited categories like textbooks, video games, movies, 0:04:59.279 --> 0:05:01.359 and music, and you had to do it at a 0:05:01.360 --> 0:05:03.960 set price. So it's not an auction. It's a fixed 0:05:04.040 --> 0:05:06.320 price approach, but you get to choose what the prices 0:05:06.440 --> 0:05:09.840 as the seller um as a store with a bunch 0:05:09.880 --> 0:05:11.800 of independent vendors. You can think of it that way. 0:05:11.880 --> 0:05:15.520 So let's say that you wanted to sell a specific textbook, 0:05:15.800 --> 0:05:18.559 you could actually go onto half dot com and search 0:05:18.680 --> 0:05:21.159 to find out if anyone else was selling that same 0:05:21.160 --> 0:05:23.520 sort of textbook and what price they had said it at, 0:05:23.520 --> 0:05:25.560 what the average price was, and this would help you 0:05:25.640 --> 0:05:28.880 determine what price to set your textbook. Maybe you go 0:05:28.920 --> 0:05:30.839 a little under because you really want to get rid 0:05:30.880 --> 0:05:33.200 of this thing. Maybe you go a little overthinking eventually 0:05:33.240 --> 0:05:35.680 someone's gonna pay for it. Half dot Com took a 0:05:35.680 --> 0:05:39.200 commission for any sale, and sellers were responsible for shipping 0:05:39.240 --> 0:05:41.960 the actual items within three business days of a sale 0:05:42.040 --> 0:05:45.440 going through. And oddly enough, even though eBay would acquire 0:05:45.520 --> 0:05:50.000 PayPal in two thousand two, eBay would not incorporate PayPal 0:05:50.120 --> 0:05:54.440 into half dot com until twenty so that was kind 0:05:54.440 --> 0:05:57.400 of weird that they delayed so long to put PayPal 0:05:57.640 --> 0:06:01.440 functionality in half dot com. eBay stated it would operate 0:06:01.480 --> 0:06:05.119 half dot com as a separate entity, maintaining its business model, 0:06:05.560 --> 0:06:10.760 which was pretty much true until when eBay shut down 0:06:11.080 --> 0:06:14.320 Half dot com, so it is no more. In November 0:06:14.320 --> 0:06:18.200 two thousand, eBay introduced the buy it Now feature that 0:06:18.279 --> 0:06:21.320 allows buyers to purchase an item at a set price 0:06:21.839 --> 0:06:24.360 rather than play the auction game. And of course it's 0:06:24.440 --> 0:06:26.520 up to the buyer to set this, so if a 0:06:26.520 --> 0:06:29.279 buyer doesn't set a buy it now price, it's just 0:06:29.360 --> 0:06:32.719 a normal auction. But this gave buyers options. They could 0:06:32.760 --> 0:06:35.400 try to purchase the item at less than the buy 0:06:35.480 --> 0:06:38.920 it now price by going through the auction, but then 0:06:38.960 --> 0:06:41.520 they could risk being sniped out of a purchase, or 0:06:41.520 --> 0:06:43.880 they could just go ahead and buy it for the 0:06:43.960 --> 0:06:48.560 asking price. So for example, I might have a lovely 0:06:48.640 --> 0:06:52.880 Vause up on eBay and the minimum bid for the 0:06:52.920 --> 0:06:55.640 auction is twenty dollars, but the buy it now price 0:06:55.720 --> 0:06:58.400 is fifty dollars, So if you really like that Vause, 0:06:58.920 --> 0:07:01.800 you could buy it for fifty bucks, or if you 0:07:01.839 --> 0:07:03.800 felt I feel pretty good about this, I don't know 0:07:03.839 --> 0:07:05.720 that a lot of people are looking at this. I'm 0:07:05.760 --> 0:07:07.520 gonna go ahead and put in the minimum bid of 0:07:07.560 --> 0:07:10.240 twenty bucks and you could just try and buy it 0:07:10.280 --> 0:07:12.840 for that, and if the auction expires at the end 0:07:12.840 --> 0:07:15.960 of the set time and you are the highest bidder 0:07:15.960 --> 0:07:19.240 at twenty bucks, you just saved yourself thirty dollars. So 0:07:19.280 --> 0:07:22.840 it's kind of a a game almost, or it's you know, 0:07:22.920 --> 0:07:25.680 a bar of a risk sort of thing, depending on 0:07:25.720 --> 0:07:27.240 how you want to look at it. But it gave 0:07:27.280 --> 0:07:30.360 options to buyers. eBay also released an a p I 0:07:30.520 --> 0:07:33.880 that is an application programming interface. They did that in 0:07:33.920 --> 0:07:37.080 two thousand that lets developers create their own apps to 0:07:37.360 --> 0:07:40.640 interact with eBay. So, uh, it lets you have some 0:07:40.680 --> 0:07:43.640 functionality with eBay, and you can do it in different ways. 0:07:43.680 --> 0:07:46.320 You can incorporate it into different websites, that kind of thing. 0:07:47.200 --> 0:07:49.840 In two thousand one, and this is on eBay's own 0:07:49.920 --> 0:07:54.280 corporate history, a special auction saw a pair of blue 0:07:54.360 --> 0:08:00.000 jeans sell for more than forty six thousand, five hundred dollars. 0:08:01.080 --> 0:08:03.960 Think about that, Dory, a pair of blue jeans that 0:08:04.000 --> 0:08:09.120 cost forty sillars. What those genes. By the way, we're 0:08:09.160 --> 0:08:13.560 the oldest pair of Levi's known to exist. The auction 0:08:13.640 --> 0:08:16.320 was partly presented by the History Channel. And who was 0:08:16.360 --> 0:08:20.240 the lucky bidder who put forward nearly fifty grand for 0:08:20.280 --> 0:08:23.040 a pair of jeans? And he guesses, and he guesses. Try, 0:08:23.400 --> 0:08:28.800 you're gonna guess. R is not guessing. Give me a guess. 0:08:28.840 --> 0:08:30.480 Who would put up fifty grand for a pair of 0:08:30.480 --> 0:08:38.000 blue jeans? Levi's Vintage Levi's, They date from eighteen eighties. Tarry, 0:08:38.040 --> 0:08:39.880 you gotta you gotta be faster than this. You gotta 0:08:39.880 --> 0:08:43.600 be faster. People can't listen to this. It was actually 0:08:43.679 --> 0:08:46.480 the Levi s. Trouss Company, the company that made the 0:08:46.480 --> 0:08:50.199 blue jeans, paid fifty thou dollars or nearly fifty thou 0:08:50.360 --> 0:08:52.480 dollars to buy the blue jeans. That is the most 0:08:52.520 --> 0:08:56.959 expensive refund I have ever heard. Actually, they just wanted 0:08:57.000 --> 0:09:00.680 it so that they would have these vintage genes, and 0:09:00.720 --> 0:09:04.080 they planned on making replicas essentially of the genes and 0:09:04.080 --> 0:09:06.440 selling them. The jenes, like I said, were dated to 0:09:06.480 --> 0:09:09.440 the eighteen eighties, which means that Jack the Ripper could 0:09:09.440 --> 0:09:12.080 have worn them, but he probably didn't because he probably 0:09:12.080 --> 0:09:15.240 didn't wear blue jeans at all. eBay also launched the 0:09:15.320 --> 0:09:18.600 eBay Store in June two thousand one that allowed sellers 0:09:18.640 --> 0:09:21.840 to create a virtual storefront that would hold all their 0:09:21.920 --> 0:09:25.000 listings as well as let them put branding on the 0:09:25.000 --> 0:09:28.560 page to differentiate their stores from other people's stores, and 0:09:28.600 --> 0:09:31.960 it eventually included marketing tools for users as well, like 0:09:32.040 --> 0:09:35.680 email newsletters. So this gave people who had an eBay 0:09:35.720 --> 0:09:38.920 account the chance to have their own virtual storefront. So 0:09:38.960 --> 0:09:42.000 instead of just listing things on eBay, so you have 0:09:42.360 --> 0:09:45.440 maybe you've listed twenty different things on eBay, but they're 0:09:45.480 --> 0:09:47.840 all kind of just random and they don't appear in 0:09:47.880 --> 0:09:50.280 any one location. It's just if people happen to be 0:09:50.320 --> 0:09:53.439 searching for that particular type of item, then you're listing 0:09:53.480 --> 0:09:56.160 might pop up. But having a virtual storefront, people could 0:09:56.160 --> 0:09:58.400 actually go through all the things you have listed on 0:09:58.440 --> 0:10:01.800 eBay and it's almost like you are your own little, 0:10:01.920 --> 0:10:04.240 tiny store. And in fact you could be if you 0:10:04.440 --> 0:10:07.440 had stuff that you were making, for example, and you 0:10:07.480 --> 0:10:09.520 wanted to make it available on eBay, you could have 0:10:09.559 --> 0:10:12.880 your own little storefront. So this really changed things up 0:10:12.920 --> 0:10:15.280 a lot too. Now we're finally back up to two 0:10:15.280 --> 0:10:16.960 thousand two, and I realized that was a lot of 0:10:16.960 --> 0:10:20.400 stuff I left out of my last episode. But during 0:10:20.440 --> 0:10:23.120 that last episode I felt the trajectory toward the PayPal 0:10:23.160 --> 0:10:27.959 acquisition was really important. As for that acquisition, David O. Sachs, 0:10:28.080 --> 0:10:31.280 who was the CEO and the product leader of PayPal 0:10:31.559 --> 0:10:35.000 at the time of the acquisition, wrote a great piece 0:10:35.080 --> 0:10:39.040 on Cora That's the Question and Answer website about why 0:10:39.160 --> 0:10:42.640 PayPal chose to sell to eBay, Why why did PayPal 0:10:43.640 --> 0:10:46.200 want this acquisition to take place? Well, at the time, 0:10:46.280 --> 0:10:50.680 PayPal was working hard to scale up because payment processing 0:10:50.760 --> 0:10:55.400 businesses are only really profitable if they scale, and eBay 0:10:55.440 --> 0:11:00.400 represented the majority of all payment volume on PayPal, two 0:11:00.480 --> 0:11:05.920 thirds of all transactions. eBay also had other payment solutions 0:11:05.920 --> 0:11:08.560 connected to its service, not just PayPal, so you could 0:11:08.559 --> 0:11:12.240 pay through credit cards, their eBay had its own proprietary 0:11:12.360 --> 0:11:16.679 approach and others, and so there was a possibility that 0:11:16.800 --> 0:11:21.080 eBay could end up taking PayPal off that list or 0:11:21.120 --> 0:11:24.920 push other people to use its own proprietary approach, and 0:11:24.920 --> 0:11:28.720 that PayPal would suffer as a result. Eventually, now eat 0:11:28.720 --> 0:11:32.320 paypals off eBay volume. The stuff that people are using 0:11:32.320 --> 0:11:35.199 PayPal four that doesn't involve eBay at all would be 0:11:35.440 --> 0:11:39.000 larger than their eBay volume. But in two thousand two 0:11:39.080 --> 0:11:41.559 it was a different story. So if eBay were to 0:11:41.640 --> 0:11:43.920 flip that switch, if they were to say, let's really 0:11:43.960 --> 0:11:47.520 push people to this other proprietary approach, that could have 0:11:47.760 --> 0:11:53.360 possibly hamstrong PayPal enough so that the company would have 0:11:53.400 --> 0:11:56.520 failed because two thirds of their volume was going through eBay, 0:11:56.640 --> 0:12:00.400 so they were really dependent upon eBay. In addition, according 0:12:00.400 --> 0:12:03.400 to Sachs, PayPal was anticipating some legal battles over the 0:12:03.480 --> 0:12:07.439 use of the service in association with stuff like gambling sites. Now, 0:12:07.480 --> 0:12:10.840 there was nothing illegal about the arrangement that PayPal had, 0:12:10.920 --> 0:12:14.040 but there was a perception that politicians in the United 0:12:14.080 --> 0:12:16.400 States in particular were arming up to take a swing 0:12:16.480 --> 0:12:20.520 at online gambling and that they might argue that PayPal 0:12:21.120 --> 0:12:25.440 was enabling gamblers. And so when the opportunity came, PayPal 0:12:25.679 --> 0:12:29.160 ended up agreeing to this acquisition deal with eBay in 0:12:29.240 --> 0:12:32.600 order to join forces with the company so that PayPal 0:12:32.640 --> 0:12:36.400 could survive and grow. eBay would benefit from that as well. 0:12:36.400 --> 0:12:38.960 Of Obviously, now it's gonna be fun to revisit that 0:12:39.000 --> 0:12:41.160 topic when I get up to two thousand fourteen, because 0:12:41.160 --> 0:12:45.240 that's when PayPal and eBay parted ways. And I'll explain 0:12:45.280 --> 0:12:49.040 all about that and why it happened in the next episode. 0:12:49.600 --> 0:12:53.360 In two thousand three, eBay continued making acquisitions of other 0:12:53.400 --> 0:12:57.400 auction and commerce online companies, including a Chinese commerce company 0:12:57.480 --> 0:13:01.600 called each Net, and it continued to grow and add 0:13:01.640 --> 0:13:05.120 more users. At this time, and play Jim Uncle Griff 0:13:05.200 --> 0:13:08.600 Griffin published a book called the Official eBay Bible, which 0:13:08.640 --> 0:13:10.880 was a manual to help buyers and sellers make the 0:13:10.880 --> 0:13:15.480 most effective use out of eBay. Oh and also that year, 0:13:15.920 --> 0:13:19.480 weird Al Yankovic came out with a little ditty called 0:13:19.720 --> 0:13:22.959 eBay and it was a musical parody of the song 0:13:23.160 --> 0:13:26.640 I Want It that Way by some group called the 0:13:26.679 --> 0:13:31.959 Backstreet Boys. Now I'm not gonna sing that song because 0:13:32.000 --> 0:13:34.400 you guys have done nothing wrong and don't deserve to 0:13:34.440 --> 0:13:36.520 have that happen to you. But I am going to 0:13:36.640 --> 0:13:38.800 read some of the lyrics to you just so that 0:13:38.840 --> 0:13:40.400 you can kind of get a feel for this song. 0:13:40.520 --> 0:13:44.880 So the song opens like this, A used pink bathrobe, 0:13:45.120 --> 0:13:49.640 a rare mint snow globe, a Smurf TV tray I 0:13:49.760 --> 0:13:53.199 bought on eBay. My house is filled with this crap 0:13:53.480 --> 0:13:56.760 shows up in bubble wrap most every day. What I 0:13:56.800 --> 0:14:01.120 bought on eBay? Tell me why I need another pet rock, 0:14:01.600 --> 0:14:05.160 Tell me why I got that alf alarm clock. Tell 0:14:05.200 --> 0:14:09.040 me why I bid on Shatner's old to pay they 0:14:09.120 --> 0:14:11.520 had it on eBay. And a little bit later in 0:14:11.520 --> 0:14:14.400 that song, he has this bit, I am the type 0:14:14.400 --> 0:14:17.640 who is liable to snipe you with two seconds left 0:14:17.760 --> 0:14:22.200 to go? WHOA got PayPal or visa? Whatever will please 0:14:22.240 --> 0:14:24.520 you as long as I've got the dough. So he 0:14:24.520 --> 0:14:26.520 did a really great job making jokes out of the 0:14:26.560 --> 0:14:29.880 stuff that was very much part of eBay culture. In fact, 0:14:30.200 --> 0:14:33.920 I haven't really talked about what sniping is yet in 0:14:33.960 --> 0:14:36.560 these episodes about eBay, and I guess I probably should. 0:14:36.600 --> 0:14:40.600 Sniping was this practice of sitting on an auction and 0:14:40.640 --> 0:14:43.920 watching the time run down and then placing a bit 0:14:44.040 --> 0:14:47.000 just before the auction expires, and you were said to 0:14:47.040 --> 0:14:50.240 snipe it because you would outbid the previous bidder just 0:14:50.440 --> 0:14:53.160 before the auction ended. But this is actually a little 0:14:53.160 --> 0:14:55.840 more tricky than it sounds because the way eBay allows 0:14:55.840 --> 0:14:59.280 for automatic bidding. I'll explain that more in just a second, 0:14:59.320 --> 0:15:10.800 but first let's take a quick break to thank our sponsor. Alright, 0:15:10.880 --> 0:15:14.040 so we're back, and let's talk quickly about how bidding 0:15:14.280 --> 0:15:17.080 works on e basis. I haven't really covered that yet 0:15:17.360 --> 0:15:19.880 before we jump back into the history of the company. 0:15:20.280 --> 0:15:23.600 In an eBay auction, the auction will last a set 0:15:23.640 --> 0:15:26.600 amount of time, and you get to choose what that 0:15:26.640 --> 0:15:32.560 time is. The seller can select an auction to last one, three, five, seven, 0:15:32.800 --> 0:15:36.520 or ten days, and typically the seller will also create 0:15:36.640 --> 0:15:40.640 a reserve price that's the minimum bid the seller will 0:15:40.680 --> 0:15:43.360 accept as a purchase price for the item. And the 0:15:43.400 --> 0:15:46.720 seller can also choose a buy it now price, which 0:15:46.720 --> 0:15:50.040 would allow someone to outright purchase the item for that 0:15:50.120 --> 0:15:53.360 price rather than bid on it and start up in auction. 0:15:53.800 --> 0:15:55.960 Or you might not set a buy it now price, 0:15:56.360 --> 0:15:57.840 and you might not do it in the hopes of 0:15:57.840 --> 0:16:00.280 people going bonkers and bidding up the price to a 0:16:00.320 --> 0:16:02.720 really high amount, much higher than what you would have set. 0:16:03.280 --> 0:16:07.000 So it's kind of a a risk versus reward thing now. 0:16:07.000 --> 0:16:11.200 In normal auctions in the real world, like physical auctions, 0:16:11.360 --> 0:16:14.640 typically the auctioneer, who I think, by law must be 0:16:14.680 --> 0:16:17.720 able to speak at a speed that defies belief, will 0:16:17.760 --> 0:16:20.760 call for bids until the bids trickled down to a halt, 0:16:21.200 --> 0:16:23.280 at which point the auctioneer calls for the end of 0:16:23.320 --> 0:16:25.920 the auction of that particular piece, and the person who 0:16:25.920 --> 0:16:29.680 made the final bid wins. So you just keep going. 0:16:29.960 --> 0:16:32.120 And so an auction can last a really long time 0:16:32.200 --> 0:16:34.520 or be really short, And of course by wins, I 0:16:34.520 --> 0:16:36.960 mean the person now has to cough up the actual 0:16:37.080 --> 0:16:39.160 dough to buy the thing that was being auctioned off. 0:16:39.680 --> 0:16:43.880 Now an eBay auctions have a predefined end time. They 0:16:43.920 --> 0:16:46.840 don't just go when the bids trickle out, So the 0:16:46.840 --> 0:16:49.200 auction will continue to go until it reaches it's cutting 0:16:49.200 --> 0:16:52.000 off point, or the seller chooses to ind the auction early, 0:16:52.080 --> 0:16:55.440 and at that moment, whomever made the highest bid wins 0:16:55.480 --> 0:16:58.920 the auction. Moreover, you can make a bid on an 0:16:58.960 --> 0:17:01.240 item and to side what you're willing to pay for 0:17:01.280 --> 0:17:04.640 it at max. From the very beginning, let's say I'm 0:17:04.680 --> 0:17:07.520 on eBay and I see a listing for an original 0:17:07.680 --> 0:17:11.800 Deities and Demi Gods source book for Advanced Dungeons and Dragons, 0:17:11.800 --> 0:17:14.760 and I think, holy cow, that's the source book that 0:17:14.840 --> 0:17:18.359 still has Lovecraft monsters in it has characters from Michael 0:17:18.400 --> 0:17:21.320 Moorecox l Rick Saga in it. This was before the 0:17:21.359 --> 0:17:25.439 copyright lawyers forced TSR to change it. I have to 0:17:25.560 --> 0:17:28.320 have this book. I decide that I am willing to 0:17:28.320 --> 0:17:31.240 pay up to a hundred dollars for this source book 0:17:31.240 --> 0:17:33.960 because I'm a collector and the current bid is let's 0:17:33.960 --> 0:17:37.480 say thirty five dollars. Now, my new bid does not 0:17:37.680 --> 0:17:41.080 automatically make the price jump from thirty five dollars to 0:17:41.240 --> 0:17:46.440 one hundred dollars. Instead, eBay will reference whatever the maximum 0:17:46.480 --> 0:17:48.840 bid was for the person who set the thirty five 0:17:48.880 --> 0:17:52.240 dollar amount, and if thirty five dollars was the maximum, 0:17:52.520 --> 0:17:55.160 eBay will bump up the price to a small amount 0:17:55.280 --> 0:17:58.680 above thirty five dollars. Let's say it's in five dollar increments. 0:17:58.720 --> 0:18:00.679 So if someone else bids again to you, but they 0:18:00.720 --> 0:18:05.439 bid below your one dollar maximum, you will automatically outbid 0:18:05.480 --> 0:18:08.640 them a little higher than their bid. So let's stick 0:18:08.680 --> 0:18:11.560 with my example to explain this better. And let's consider 0:18:11.640 --> 0:18:15.439 this scenario. Um, Matt Frederick and I are in a 0:18:15.480 --> 0:18:17.920 bidding war for this a D and D source book. 0:18:18.080 --> 0:18:20.840 This is a totally believable scenario. By the way, he 0:18:20.880 --> 0:18:24.000 has placed a bid on the item before me. I 0:18:24.040 --> 0:18:26.000 haven't even seen it yet. He saw it any bid 0:18:26.080 --> 0:18:28.159 on it, and when I go to the item, I 0:18:28.160 --> 0:18:30.880 see that the current bid price is thirty five dollars. 0:18:31.280 --> 0:18:34.440 Now what I don't know is that Matt Frederick's full bid, 0:18:34.720 --> 0:18:38.720 the maximum bid is actually fifty dollars. It's showing me 0:18:38.760 --> 0:18:42.200 thirty five dollars because that's the lowest increment above whatever 0:18:42.240 --> 0:18:45.840 the reserve price was. So I place my maximum bid 0:18:45.960 --> 0:18:49.480 of one hundred dollars, and this is what I am 0:18:49.520 --> 0:18:51.800 willing to pay for that source book. It's kind of 0:18:51.800 --> 0:18:53.840 what I feel like is my maximum. I don't want 0:18:53.840 --> 0:18:56.320 to go over a hundred. When I place my bid, 0:18:56.520 --> 0:18:58.720 it's as if Matt and I are in a really 0:18:58.760 --> 0:19:03.080 fast paced bidding war. So his bid of thirty five dollars, 0:19:03.240 --> 0:19:06.040 I up it up to forty dollars, but because he's 0:19:06.040 --> 0:19:09.359 has maximum said it fifty, it automatically bumps up again. 0:19:09.840 --> 0:19:12.800 So his final bid of fifty dollars finally gets up there, 0:19:13.320 --> 0:19:16.359 and then my bid, because I said my maximum is 0:19:16.359 --> 0:19:19.639 a hundred, would go out to fifty five dollars. eBay 0:19:19.720 --> 0:19:22.080 handles all this automatically. I don't have to do anything 0:19:22.280 --> 0:19:24.920 except set what my maximum bid is. So the new 0:19:25.000 --> 0:19:28.560 price to beat appears to be fifty five dollars. Now, 0:19:28.600 --> 0:19:30.720 let's say Matt checks in on the auction and he 0:19:30.760 --> 0:19:34.320 sees that he's been outbid and by me, of all people. 0:19:34.520 --> 0:19:37.040 So he sees the new price is fifty five dollars, 0:19:37.040 --> 0:19:38.640 and he thinks, well, and I'm willing to go out 0:19:38.640 --> 0:19:42.640 to sixty, so he bids sixty dollars. eBay processes this, 0:19:42.760 --> 0:19:45.360 but it sees that I have already said a maximum 0:19:45.400 --> 0:19:48.679 bid of one hundred dollars. So the price bumps up 0:19:48.680 --> 0:19:52.159 to sixty dollars for Matt, but then automatically bumps up 0:19:52.160 --> 0:19:54.880 again to sixty five dollars for me, and it would 0:19:54.960 --> 0:19:57.439 keep doing this until it hit my maximum of a 0:19:57.520 --> 0:20:00.359 hundred dollars. If someone bid more than that. Let's say 0:20:00.400 --> 0:20:02.280 that Matt goes crazy and he decides to bid a 0:20:02.320 --> 0:20:05.520 hundred and five dollars, then I would be outbid and 0:20:05.560 --> 0:20:07.600 I would be out of the auction unless I came 0:20:07.640 --> 0:20:10.480 back to continue this bidding war. The nice thing about 0:20:10.520 --> 0:20:13.440 this is you can set an amount you're comfortable with 0:20:13.800 --> 0:20:16.360 and then just walk away. So if you win the auction, 0:20:16.600 --> 0:20:18.960 chances are you're going to win at a level below 0:20:19.240 --> 0:20:21.840 your maximum, like in that example. I was just giving. 0:20:22.280 --> 0:20:24.560 If I bid a maximum of a hundred dollars but 0:20:24.640 --> 0:20:27.680 Matt was not willing to go above sixty five, I 0:20:27.720 --> 0:20:30.200 would not be charged the full one dollars. I would 0:20:30.200 --> 0:20:32.879 be charged sixty five dollars for that. That That would be 0:20:32.880 --> 0:20:36.960 the winning bid. So that's nice. You actually would quote 0:20:36.960 --> 0:20:39.280 it not really save money, but you wouldn't spend as 0:20:39.359 --> 0:20:42.480 much as you were willing to spend. And if you lose, 0:20:42.760 --> 0:20:45.320 you don't end up spending more than you wanted to 0:20:45.520 --> 0:20:48.040 on the item because you had already set your maximum, 0:20:48.080 --> 0:20:51.600 assuming that you just said it and walked away. However, 0:20:52.680 --> 0:20:55.320 winning is a pretty awesome experience, and so a lot 0:20:55.359 --> 0:20:58.040 of people may find themselves returning to the auction to 0:20:58.160 --> 0:21:01.919 increase their bids over what their maximum was as they 0:21:01.960 --> 0:21:04.199 see an auction start to get away from them. And 0:21:04.240 --> 0:21:06.320 that happens all the time, and it's also kind of 0:21:06.400 --> 0:21:09.159 dangerous behavior, so you gotta be on the lookout for that. 0:21:09.680 --> 0:21:13.119 And because that's how bidding works, it makes sniping a 0:21:13.160 --> 0:21:16.960 little tricky. Because let's say that I see that the 0:21:18.000 --> 0:21:20.840 current bid is thirty five dollars for this sourcebook, and 0:21:20.840 --> 0:21:23.440 Matt Frederick has set that that winning bid, so far, 0:21:23.800 --> 0:21:26.560 and there's only two minutes left in the auction, and 0:21:26.600 --> 0:21:28.680 I think, perfect. Now I'm gonna go in snipe it. 0:21:28.760 --> 0:21:31.119 I'm gonna put in forty dollars. I'm gonna win, but 0:21:31.200 --> 0:21:33.080 I don't know that Matt has already put in a 0:21:33.119 --> 0:21:36.320 fifty dollar maximum. If I wait too long to snipe, 0:21:36.560 --> 0:21:38.600 then all I'm really gonna do is drive the price 0:21:38.680 --> 0:21:41.399 up a little bit and make Matt pay more for 0:21:41.440 --> 0:21:43.280 the source book than he thought he was going to 0:21:43.359 --> 0:21:46.440 have to, which I admit has its own sort of 0:21:46.800 --> 0:21:50.880 sweet poetry. Making Matt Frederick have to spend more money. 0:21:51.359 --> 0:21:53.399 It warms my heart a little bit, but it doesn't 0:21:53.480 --> 0:21:55.920 get me that source book. So that was also part 0:21:55.920 --> 0:21:57.800 of the strategy, as if you were going into snipe 0:21:57.880 --> 0:22:01.360 and item, you had to be ready to go quickly 0:22:01.480 --> 0:22:04.680