A recent done study published in 2006 by researchers Yang and Kahng analyzed 264,073 items sold on eBay. The researchers found that winning bidders are much more likely to have placed a single bid late in the auction (snipe), rather than placing multiple incremental bids as the auction progressed.
Surprisingly their findings demonstrate that the likelihood of winning an item drops with each bid. “Our analysis explicitly shows that the winning strategy is to bid at the last moment as the first attempt rather than incremental bidding from the start. "
Harvard University Professor and economist Alan Roth who has studied the economics of sniping has come to similar conclusions and has stated, “Sniping is a good strategy, for those with the time to do it. "
For years savvy buyers on eBay have employed the strategy known as auction sniping. They wait until the last seconds of the auction and then bid at the last possible moment, giving other bidders no time to bid again. Now scientists from various fields of academia are studying sniping and their findings are confirming what many eBay users have known for years, that sniping can increase the rate at which bidders win auctions and also save money by reducing the number of bids that leads to price increase.
Some bidders snipe manually by sitting their computers until the auction ends, while more advanced users automate the process with an online service such as Powersnipe or the desktop bidding software eBay Auction Sniper produced by the same company.
Jim Smith, MBA, CMC was one of the first Powersellers on eBay. His consulting company “eBay to Go" advises fortune 500 companies on eBay supply chain management.