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09/30/2005: "The Marketing Magic of eBay."

I buy a lot of stuff on ebay. Sell quite a bit too. I don't buy on ebay because I like auctions but because I often can find items on ebay that are not available elsewhere such as a special hard-to-find renewal point for a 1950 Esterbrook fountain pen.

My style of bidding is simple. I'll pay up to a certain amount and no more. If the bidding goes over that amount, let the other guy have it. He needs it more than me.

The reason I bid like that way is that most people overpay on ebay. Most items sell for far more than they're worth.

I put a really nice Gucci bag on ebay and offered to sell it flat out for $49.00. Guess what? No takers. It didn't sell.

So I relisted it. Only this time, I made it a 7-day auction and started the bidding at $9.99. I had some 20 bidders and it sold for $215.00! People want to compete. People want to win.

I was interested in a certain item on ebay. So I checked to see what that item had gone for lately. In each case, I could have easily and quickly bought it with the click of a mouse at several online stores for $30.00 less!

What is the magic of ebay that makes otherwise intelligent people go crazy and overspend?

It's the one word that matters most to Americans --- WINNING! On ebay, you don't BUY an item, you WIN an item.

You're not the silly person willing to overspend for a bobble --- you're the lucky winner. After you've purchased an item you get a message that says, "Congratulations. You won!" You don't get a thank you for your purchase letter.

One woman was bragging in a forum that she won every auction she was in. What that really tells you is that she's a foolish soul willing to pay too much for everything she buys. Sure hope she makes it to one of my auctions!

The nice thing about most of my ebay winnings is that rather than claim them as "winnings" on my income tax form, I can claim them as "business expenses". I may not win a computer. But I sure as hell can write it off!

Ebay plays on people's need to win and compete. And it's a business model that works.

We can't all use ebay's business model. After all, you don't win a book on Amazon. You buy it. Plain and simple. But you can make your customers and clients feel like they've made a wise decision by buying from you and that, as a result, they'll be a real winner.