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"Perfect Penny" Values for Sniping

posted: Oct 28 2009

Bidders often wonder how many pennies they should put after the dollar value of their bid. Do you always ask yourself, "Should I bid $24.10, $24.50, or $24.98? What is the perfect penny value? Do pennies even matter?"

You are not alone. eBay veteran "puppetplay" still can't decide after 12 years and hundreds of intense bidding wars. "It seems like the more I want the item, the more pennies I add," he says, "but then I come back around to zero and it starts over. Help!"

At BidSlammer, we call this the "perfect penny," or optimum penny value. Since eBay's inception, bidders of all kinds (not just snipers) have debated this: If such a value exists, knowing it would give that bidder a big advantage.

Just for grins, we decided to research this using BidSlammer's database, which has millions of executed snipes using a variety of currencies and prices. Two things immediately became clear:

First: Yes, an optimum penny value definitely exists! And using it increases chances of winning up to 40%.

And second, there is a grand conspiracy against anyone trying to figure it out. Thanks to all you wonderful, patient BidSlammer customers who patiently waited more than two months for this article to publish.

So, out of 716 guessers, not one person guessed the "correct" answer!

That doesn't make sense: Chance is 1 in 100, regardless of what number you are guessing! But 0 out of 716? As we said, it's a conspiracy. And it just gets weirder...

Here is the chart with all the answers. If your brain turns to slush, just skip to the next section.

Reading the Chart

It takes a moment to absorb the graph. It's basically a 3D XY scatter chart. The X and Y axes are self-explanatory, and the third dimension is the size of each bubble. The bigger the bubble, the more bidders used that penny value.

The best value is 24¢ or 99¢

You can see 24¢ towering over the other values in terms of win rate (15% to 40% higher). For any other value there is no obvious advantage (except 4¢, which we will address below). Also, the small dot for 24¢ tells us that very few (if any) people know about it and/or use it as a statistical advantage.

Stay away from 00¢ and 50¢

The big size of the dots for 00¢ and 50¢ mean they are very popular, but look how low they are low on the win rate scale. In fact, one of the worst values you can choose is 00¢ it has a 30% success rate.

If you habitually snipe using 00¢, by just adding three more cents and using 4¢ you can gain a 30% additional advantage; 99¢ is not a bad choice, but padding up to the next 24¢ will give you the best edge.

Our Explanation

To understand why 24¢ has such a high win rate, first please make sure you understand our very brief excellent minimum-bid-increment example. Here is an abbreviated summary of MBI's.

So let us remind you that we are talking about situations where the dollar amount is the same or near the same. Since at high dollar values, heck, you can be within $5 of the bid and your penny value will definitely matter.

So, to beat the odds you must maximize your opportunity. To do this, bid as far to the right of the next relevant slice as possible. The right-most point in the $1-$4.99 range is 25¢ -- so it is no surprise that the best penny value is 24¢.

See? That's why 24¢ wins the most often: It is the theoretical best value to guarantee a win over the other bids (given that you are using the same dollar value, or at high-dollar values, within a few dollars).

Now here's the part we can't explain very well. Why these values, especially 24¢, still hold up strong at prices well into the hundreds. In other words, if we look at the MBI table, you expect 99¢ to be the dominant penny value. But even if we do the graph and disregard items under $100, the value of 24¢ is still prominent.

After looking over this data dozens of different ways it is obvious that the penny value is driven by human factors, not just the MBI. We think sellers and buyers are just pushing that penny value to be 99¢ or $1.00. Think about it: Sellers start items ending in $0.99 and buyers love to bid 99¢ according to the chart above. Look at any bid history for a popular item and you will see this trend. Someone is always bidding 00 or 99¢ which sort of "resets" the window.

Summary (the Short Version)

In competitive bidding, the dollar amount matters, but so does the penny value:

• Statistics show that for US auctions, the value 24¢ has a higher success rate across items than any other values: At least 10% and as much as 40%.
• From a mathematical perspective, the numbers are based on maximizing the statistical likelihood of a win, based largely on the minimum bid increment window. In plain English, though, you just need to be doing the opposite of what other people are doing.
• Never, ever bid right on the dollar. There be dragons there. For that matter, never bid right on the boundary of the bid-increment table. For US dollars, that is 00, 25, 50, 75.
• Memorize the MBI's (minimum bid increments) for your currency type. Always consider the minimum bid increment in every situation.

Have fun and enjoy testing it!

Thanks for your feedback and support!

This article, and the entire discovery and discussion of 4¢ and 24¢ as best last-second bidding values (c) BidSlammer October 2009. All Rights Reserved.