I am not quite sure how to ask this without sounding like an idiot... When bidding on a coin I need to fill a set, I am often prepared to go a little higher than Grey Sheet or what a coin has been going for lately on Heritage. Sometimes, I notice the bid takes drastic jumps, and some think it is a sign of shill bidding. But sometimes I jump right in with my max bid when I know I can't be available on my phone on the last day or the last few hours (because of the nature of my job, I often can't use it). With that being said, and mine is a reasonable explanation, what are other signs of shill bidding?
IMO it's hard to tell if there are shill bids. My unsolicited advice is to determine the maximum you will bid and use one of the bid apps.
First off, understand that you are not necessarily missing out on coins due to shill bidding. You may not be bidding enough, possibly even for a substandard coin, let alone one that you've taken lots of time to single out. If dealer bid for a particular coin is $100, fair retail is probably about $130. Grey Sheet bid is for a run-of-the-mill, generic looking example . . . not a problem coin, but not exceptional for the grade either. If you've spent a fair amount of time looking through numerous examples to find one that's exceptional for the grade, and you expect to buy it for less than $130, that seems pretty unrealistic. Suppose the next higher grade is $200 in Grey Sheet and $260 retail. If that's the case, one should not be at all surprised if someone else is willing to spend $175 or even $200 to buy that coin, as they also likely ruled out lots of average looking examples. Valuation is an art, honed with both knowledge and experience. Do not expect that a Grey Sheet is anything more than a tool. If you don't know how to use the tool properly, you cannot expect great results. With the foregoing behind us, shill bidding usually can be detected by seeing the very same coin, apparently won by a different bidder, being offered again by the same seller shortly after it ended. If you suspect shill bidding, look for re-listings of the same coins by the same seller a day or two after auction's end, and compare the images with those of the coin you bid on to confirm the coin is the same. Bear in mind that transactions can be canceled, and the seller may defend himself / herself with such a claim. If you can identify this as a pattern with a thorough review of lots of completed auctions, your claim may be very difficult to defend against.
Drastic jumps in the bid price isn't necessarily a sign of shill bidding. It could just be two buyers who escalate the price. If a coin starts at 99 cents, and the first bidder bids $100, as soon as the second bidder bids $125 it's going to jump up to $100. That's not shill bidding - that's how an auction works. A better sign of shill bidding is, if you look at the bid patterns, if there is one person who's bidding up just an increment or two at a time. The shill is trying to max out the bid. So it's at $100, and he bids $105, $110, $115, $120.... trying to find your max and then hopes you bid one more increment. This is to eke out every dollar he can from you.
What you write sounds good and well, but if someone wins an auction via shill bidding, would they not be required to pay eBay for the sale? Meaning, when they finally sell the item wouldn't the profit be reduced?
If the seller doesn't cancel the transaction, yes. My guess is that's how eBay eventually puts a lid on shill bidding . . . being deprived of final value fees from sellers who habitually cancel sales to their shill bidding accounts surely must draw both the attention and the ire of eBay.
The whole point of a shill is that the shill is working for the seller (or is a second account of the seller). If the shill wins, they just cancel the transaction and try again. Or, the shill account will then attempt to sell the coin. Trust me, the shill is not getting screwed here - that would defeat the purpose of the scam.
I have also done that a couple times, bidding up little by little. Then at whatever the last moment I possibly can, I put in my max bid.
Deep dark conspiracies are rare. Sellers want to sell at the lowest possible cost. Selling at a reserve price that guarantees no losses comes with a fee that applies whether you sell or not. Having a friend or relative bid your minimum price serves the same purpose at a lower cost. Rarely would a coin protected from loss be relisted soon after. Most times they are removed for at least several years. Grey Sheet are WHOLESALE dealer to dealer prices. Why do you think anyone would give those prices to a collector? Every month I stomp "joe coin dealer" at the coin club auction. They live and die by grey sheet prices and lose out for one bid over grey sheet prices. Bid what you want for what you want preferably with less than a minute to go and don't mourn the ones that got away. If you want to purchase at the last possible second use a commercially available sniping ap.
I used to be in love with the greysheet but through experience have learned that it is, like all other price lists, it has some serious flaws. Shill bidding is very difficult to detect if it is done well. Other than eliminating real bargains, one will still get the coin if one's bid is near the market value of the item as the seller doesn't want to sell the coin to themselves.
Don't know how often you watch ebay sales, but it is quite common for coins to "sell" and then appear on another account a week or two later.
The way around this is to use a snipe account. There are many readily available for eBay. The ap places your bid at a few seconds before closing. This prevents other bidders from reacting emotionally or irrationally to your bid and it prevents shills from inching up your bid; there just is not enough time for such nonsense. If you are outbid, you know that someone genuinely exceeded your highest price.
I've only bid online with Heritage. I am noticing that with the coins I am bidding on, S Mint Morgans dates 80-82 there is a grey sheet price point. Say a MS65 is being auctioned you will see the bid pretty much being won at $104. That's grey sheet. I don't think there is schill stuff going on, just market pricing. These coins are not spectacular with toning or nicer than average appearances.
Well, the way I do it (if I'm looking for a very specific coin), is to evaluate the target as best I can, trusting the pics & assuming I have done my homework and know the "ballpark" value (to me), I just bid my max bid & let it ride! I really don't care if I could have gotten it for less (if I'm looking for a specific coin!). For example, let's say I want "coin X", & it's currently @ $30 with 2 days to go. After my personal evaluation, if I think it is worth $40 to me, I would probably put in a bid of $50 or $55. But I don't do this for every coin - only specific ones. As for coins in general, as a very eclectic collector, I don't worry too much about other bidders, because my max bid is always the max I am willing to pay for a coin I want. So after doing my personal evaluation (I have picked up some nice varieties & unattributed VAM's both raw & in slabs) I usually put in one bid I'm willing to pay & then let it ride. For example, if I think the coin will top out at $75, I may put in $85, & I'll be happy if I win at $85, but I usually don't get there. I can truthfully say that over my 50+ years of collecting, I've only had buyers remorse 2 or 3 times, & one time I paid $45 or so for a coin, which turned out to be 800% too much! But that's the learning curve! The one major thing I learned is that, when I don't win a coin that I really want, there are still many, many more options out there. So I am not bothered by it because I bid my max bid - there will be others!
