Don't Miss a Thing
Free Updates by Email

Enter your email address


preview  |  powered by FeedBlitz

RSS Feeds

Share |

Facebook: Seth's Facebook
Twitter: @thisissethsblog

Search

Google


WWW SETH'S BLOG

SETH'S BOOKS

Seth Godin has written 12 bestsellers that have been translated into 33 languages

The complete list of online retailers

Bonus stuff!

or click on a title below to see the list

all.marketers.tell.stories

All Marketers Tell Stories

Seth's most important book about the art of marketing

ONLINE:

IN STORES:

free.prize.inside

Free Prize Inside

The practical sequel to Purple Cow

ONLINE:

IN STORES:

linchpin

Linchpin

An instant bestseller, the book that brings all of Seth's ideas together.

ONLINE:

IN STORES:

meatball.sundae

Meatball Sundae

Why the internet works (and doesn't) for your business. And vice versa.

ONLINE:

IN STORES:

permission.marketing

Permission Marketing

The classic Named "Best Business Book" by Fortune.

ONLINE:

IN STORES:

poke.the.box

Poke The Box

The latest book, Poke The Box is a call to action about the initiative you're taking - in your job or in your life, and Seth once again breaks the traditional publishing model by releasing it through The Domino Project.

ONLINE:

IN STORES:

purple.cow

Purple Cow

The worldwide bestseller. Essential reading about remarkable products and services.

ONLINE:

IN STORES:

small.is.the.new.big

Small is the New Big

A long book filled with short pieces from Fast Company and the blog. Guaranteed to make you think.

ONLINE:

IN STORES:

survival.is.not.enough

Survival is Not Enough

Seth's worst seller and personal favorite. Change. How it works (and doesn't).

ONLINE:

IN STORES:

the.big.moo

The Big Moo

All for charity. Includes original work from Malcolm Gladwell, Tom Peters and Promise Phelon.

ONLINE:

IN STORES:

the.big.red.fez

The Big Red Fez

Top 5 Amazon ebestseller for a year. All about web sites that work.

ONLINE:

IN STORES:

the.dip

The Dip

A short book about quitting and being the best in the world. It's about life, not just marketing.

ONLINE:

IN STORES:

the.icarus.deception

The Icarus Deception

Seth's most personal book, a look at the end of the industrial economy and what happens next.

ONLINE:

IN STORES:

tribes

Tribes

"Book of the year," a perennial bestseller about leading, connecting and creating movements.

ONLINE:

IN STORES:

unleashing.the.ideavirus

Unleashing the Ideavirus

More than 3,000,000 copies downloaded, perhaps the most important book to read about creating ideas that spread.

ONLINE:

IN STORES:

v.is.for.vulnerable

V Is For Vulnerable

A short, illustrated, kids-like book that takes the last chapter of Icarus and turns it into something worth sharing.

ONLINE:

IN STORES:

we.are.all.weird

We Are All Weird

The end of mass and how you can succeed by delighting a niche.

ONLINE:

IN STORES:

whatcha.gonna.do.with.that.duck

Whatcha Gonna Do With That Duck?

The sequel to Small is the New Big. More than 600 pages of the best of Seth's blog.

ONLINE:

IN STORES:


THE DIP BLOG by Seth Godin




All Marketers Are Liars Blog




Blog powered by TypePad
Member since 08/2003

« The essence of Web 2.0 | Main | Last opportunity for Dip public speaking tour »

The magic of auctions

In many auctions, the most irrational person wins.

Here's the proof: eBay offers a service where you can enter your maximum bid. Say you're bidding on a signed Derek Jeter baseball bat. You decide that the most you'd ever be willing to pay for this bat, under any circumstances, is $99. Type it in.

The auction may be at only $15, and eBay will automatically bid $16 for you. If someone else outbids you, eBay keeps increasing your bid automatically, but never exceeds your maximum.

A rational purchaser sees this as a no-lose proposition. If no one else bids more than $80, you get it for much less than you were prepared to pay. If someone else is willing to bid $100, you lose, but that's okay, because you determined ahead of time that it was only worth $99. If it goes for a hundred bucks, no big deal... it's like seeing a diamond ring for a million dollars. You'd like it but you're not willing to pay for it.

The price someone in Texas is willing to pay shouldn't have anything to do with what you think something is worth, should it?

The thing is, very few people who win auctions on eBay use this feature. It's human nature to want to keep what you've got, to want to avoid losing. Even a ten-year-old gets incensed when he discovers he's been outbid.

That's why so many auctions are active at the last minute. Auctions don't work in a rational way.

When you bid $16 for that bat on the first day, you feel terrific. I mean, you just bough a $99 bat for $16.

Of course, you're only the high bidder for a day or so. Then it's not your bat anymore! Someone else has your bat. So you bid $4 more. It's okay, you tell yourself, because, hey, you only spent $4 to get your bat back.

And this keeps going and going until you've spent $200.

A friend of mine spent almost a thousand dollars on a piece of furniture worth $20 using this tortured logic. Human beings are quite willing to repeatedly spend small amounts of money to avoid losing something that they think already belongs to them.

Last thought: the only thing worse than losing a big-time auction is winning one. If you win, you feel like a chump because everyone else in the world dropped out before you. Which is why, if you ever sell something big at auction, you need to bend over backwards to pleasantly surprise the purchaser. It's the only way to overcome auction-buyer's remorse.

Bonus lesson: If you can sell a trial version of the product or service you offer for a small amount of money, do it. (Not 'free', though, cause that'll ruin it). Once someone tries the trial--assuming they like it--then future purchases are easier to justify, because all they're doing is paying a bit extra to keep the item from disappearing...

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d83451b31569e200d834ffbc4853ef

Listed below are links to weblogs that reference The magic of auctions:

» Weshalb Auktionen hufig irrational enden from maol symbolisch
Seth Godin hat sehr gut in Worte gefasst, weshalb Auktionen hufig irrational enden. The magic of auctions: When you bid $16 for that bat on the first day, you feel terrific. I mean, you just bough a $99 bat for $16. Of course, youre only t... [Read More]

» Linkdump - May 6th, 2007 from Stut.net
Seth Godin tells us that successful ebayers are irrational. Rumous of a Google redesign are reported at TechCrunch. Duct Tape Marketing discusses choosing company names, something Ive had to tackle recently but more on that soon. A new w... [Read More]

» Please Help MeFail from Hire A Helper
A few weeks back I went golfing for the first time. I went out on the course with the expectation of shooting something that resembled my shoe size more than my age – though after the fourth hole, the latter seemed the most likely. At the end of the ... [Read More]

» Winner's Curse? Seth Godin on Auctions from THE BIZOP
Seth Godin questions whether the winner of auctions are usually irrational. This question was researched almost 25 years ago. In 1992, Richard Thaler re-published... [Read More]

» Аукцион, как один из сравнительно честных способов отъёма денег у населения from ЧеловекБренд
Очередная статья, которую написал Сет Годин, заставила задуматься над тем, что идея аукциона как таковая связана не только с азартом, возн... [Read More]

» To Succeed and Be Happy Never Quit and Know When to Give Up from DIY CASHFLOW
On the Road to Success we are always walking a fine line between never quitting and knowing when it's time to give up (or at least make an adjustment).In The Magic of Auctions, Seth Godin talks about the psychology of auctions. He points out that many ... [Read More]

» ebay как способ самовыражения from [WeAre]InLondon.org
Очень интересная статья была найдена на просторах инета. Некто Seth Godin отвечает на вопрос, почему на ebay товары, как ни странно, порой продаю... [Read More]

« The essence of Web 2.0 | Main | Last opportunity for Dip public speaking tour »