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Some thoughts on Ebay Auction prices
If you're reading this you've probably just finished looking at the tables of eBay selling prices for Tektronix goodies. You're either planning to buy or sell a Tektronix item and want to know what a typical price for that item is, or you're just curious and browsing around. If you are looking for some price guidance or benchmarks, there are some things you should consider while reviewing the selling price tables and before deciding what a "typical" price is. We have included the Average, Low, and High selling prices for each item along with the number of actual Sales of each item. You need all four of these pieces of information together, to get anything meaningful out of the data (statisticians will say you need even more than that, and they're right).
 
Sales
This is the number of recorded sales of that item since we began tracking them in July 1999. The higher this number is, the more likely that Average price is a good benchmark or indicator of current fair market value. The lower this number is, the less likely that the Average price is a good indicator of fair market value. But remember that either way, the number of sales isn't a guarantee that the Average is, or is not representative. It's the word "likely" that you have to keep in mind.
 
Average Price
This of course is the average of all the selling prices for a particular item since we started collecting the data in July 1999. If there have been many Sales of a particular item - say 20 or more - then the average price may be a reasonable indication of the current value. If there are very few Sales of an item, the average price may not be a reasonable representation of a "typical" selling price at all. Here's why :
 
Let's say there have been five sales of a Tektronix Type ABC plug-in during the past four months. Three of them sold for $20, $21 and $24 respectively. These units were 20 - 25 years old, clean but sold "as-is", "condition unknown", "we just can't test it", etc. These were typical of the Type ABC plug-ins currently available and the three selling prices would be typical. But included in the Average were the sales of two "brand new in the box, never been used, manuals included" Type ABC plug-ins. These sold for $113 and $123 respectively.
 
When you average the prices of all five sales, the average is $60. But no Type ABC plug-in ever sold for $60, or anywhere near it. In this case, the average is not a good indicator of a "typical" price for a typical Type ABC plug-in. You need more information or you could be misled by the Average. This is true of any average number quoted anywhere - radio, TV, Newspaper. Remember this the next time you hear an "average" being quoted.
 
An "average" all by itself, is close to being a useless number.
 
Low and High selling prices
These are the lowest and highest prices an item sold for in the collection of selling prices for that item. When considered together with the Average, you will have a better idea of how much the prices fluctuate, and how fair the Average is as an indicator. If the Average is closer to the High, you get a good idea what typical prices are and it might also tell you that the Low was an oddball and not all typical. The same is true if the Average is closer to the Low (as in our example for the Type ABC plug-in).
 
Known and suspected causes of High and Low prices
When the Low and High prices are nowhere near the Average, you should bear these things in mind:
  • Low prices include units that are "not working", "for parts only", "works but has problems", "condition unknown", etc. This is good to know if you are interested in buying or selling an item in this condition.
  • Low prices occasionally show-up for a perfectly good piece. This can happen due to a simple supply-and-demand situation. Remember that this is an auction. If five Type ABC plug-ins go up for sale at the same time, but there are only three interested buyers, the prices will be low. High Supply + Low Demand = Low prices. This situation can be completely reversed one week or month later.
  • High prices often occur for items sold that are in outstanding condition - not typical at all. This could be a 25-year-old item that is still "new in the box". Or, sometimes the seller will include a lot of accessories in the sale of an item that aren't included in other similar sales, such as "both manuals, two sets of probes, recent calibration certificate, cosmetically perfect". An item like this isn't typical, so it usually sells for well above the Average or typical price.
Occasionally an item will sell for a much higher than typical price for no good, apparent reason at all: there were no extras included, the unit looked like every other unit that's been sold in the past few months, nothing special. I've concluded that these high prices are due to three possible situations:
  • Auction Fever where two guys sitting at their keyboards during the last three minutes of an auction both determine that they're going to get this item, no matter what. With Auction adrenaline flowing, they forget what a reasonable price is, and that there probably will be more of these same things auctioned-off tomorrow or next week. They run the price up through the roof beyond all reason. Don't let this happen to you. Snipers often pay more than they have to. The guy that got "sniped", gets to keep his money in his pocket until the next one comes along, and he may pay less than the sniper did for the last one.
  • Supply and Demand This seems to happen when a particular item hasn't been around for while, and some demand accumulates in the market. The next time one shows-up, 25 guys are bidding for one item, all possibly fearing that this may the last one in existence because they haven't seen any others for several months. Low supply + High demand = High price.
  • Ignorance Where a new comer to eBay sees a Tektronix XYZ scope with an opening bid of $500, and remembers that the new selling price was $3000 the last time he looked in the catalog 20 years ago. Figuring this is a good deal, he bids and wins. He isn't aware that these things have been selling for $200 every week for the past year.
Are eBay prices a good indication of fair market value at all? Probably YES for the following reasons:
  • The auction is available to the entire world on the internet. Therefore the items for sale are not restricted to a flea market or surplus store table somewhere, available only to those people who happen to see them, and where a unique and isolated supply-and-demand situation might exist. This assumes that all interested buyers anywhere have access to the internet auction, and this isn't entirely true.
  • The auction provides more time to consider the purchase than a fleamarket does. The auction provides 1 to 9 days for you to become aware of an item for sale, ponder the purchase and what it's really worth to you. There really isn't a good reason for impulse buying when you think about it. A fleamarket or surplus store atmosphere can promote impulse buying, from fear that the next guy that walks-in or past the table will take it if you don't. You may pay more than you wanted to for an item, or more than it is truly worth in a situation like this. But remember, no one makes you part with the money - you do it on your own, for mainly emotional reasons.
  • The auction is a wide-open supply-and-demand situation. ALL of the buyers ultimately determine what something is worth. If all of the buyers don't bid the reserve or opening price, they have collectively determined that the buyer's asking price is too high, and no sale is made. Nobody loses: the buyer hasn't sold his item for less than he wanted, and the buyers were never "forced" into paying too much.
One situation that an auction like eBay does not duplicate is the fleamarket syndrome of prices dropping as the end of the fleamarket (allotted sales time) gets closer. Many of us have seen an item with a high price at the start of a fleamarket, and by the end of the fleamarket the same item is practically being given away ("my wife told me not to come back with this thing"). If you bought your Tek 577 curve tracer for 10 bucks in a situation like this, you ain't gonna have the same opportunity on eBay. You probably aren't going to have the same opportunity ever again. So you shouldn't consider your $10 Tek 577 as a fair price just because you had an unusual and probably unrepeatable opportunity.
 
eBay sellers do have the option of revising (i.e. lowering) their opening bid or reserve price if they haven't received any bids. But I haven't seen this happen probably because the seller isn't under the same pressure as the fleamarket seller. The fleamarket seller is about to have his "market" pulled out from under him when the hamfest closes, and there won't be another one for him 'til next year. The eBay seller can just sit back and re-list next week or next month - the market is always there.
 
Another situation that an auction like eBay can't duplicate is the ability to dicker on a price. This is a negative for people with faces and personalities that promote a seller to lower his price in a face to face situation. This is a positive for people with faces and personalities that might promote a seller to raise his price in a face to face situation.
 
Data courtesy Phil Turcotte VA3UX

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Last modified on  2/29/00 11:12:02 PM