What you need to know about live-stream auctions, including ghost bidders

What you need to know about live-stream auctions, including ghost bidders

It is the latest trend in online shopping, but can you really bag a good bargain in these auctions, or are you paying an invisible price for the items? Talking Point investigates.

A lady selling a portable fan via live stream.
A lady selling a portable fan via live stream.

SINGAPORE: Rheon Garcia is hooked on live-stream auctions. In less than a year, he has spent some S$3,000 on plenty of sundry items in such auctions.

He usually takes part in bundle auctions, in which he bids for one item like an extension plug, and the price can even go up to S$500 because it comes bundled with 10 mystery items.

“You wouldn’t know what items you’d get. So it’s like a thrill,” he said, citing the boxes of Bluetooth earpieces, a mini oven and even a blackhead remover lying around his flat, all unused.

Facebook Live shops, the latest battleground for bargains, have been popping up in the past two years thanks to buyers like him.

Rheon Garcia showing Talking Point host Diana Ser an item he bought in a live-stream auction.
Rheon Garcia showing Talking Point host Diana Ser one of the items he bought.

Today, there are more than 50 such outlets, offering products one may have never thought could be hawked online, from fresh fruits to sports cars.

Live auctioneer Joyce Leong from Freshcatch Seafoodbidding has been selling seafood, for example, via live-stream auctions from an Ang Mo Kio wet market for the past year.

Using her smartphone propped on a tripod, she can attract hundreds of online viewers — enabling her business to target working parents who “won’t have time to go to the market” and the elderly who may be unable to do so.

“Sometimes they’re sick and (have difficulty) walking,” she said. “So … we can send (the items) to them.”

Joyce Leong live-streams a seafood auction six mornings a week. (Photo: Nuria Ling/TODAY)
Joyce Leong live-streams a seafood auction six mornings a week. (Photo: Nuria Ling/TODAY)

There are good reasons that live-stream auctions are the latest trend in online shopping, but can you really bag a good bargain in these auctions, or are you paying an invisible price for the items?

The programme Talking Point finds out five things you should know. (Watch the episode here.)

1. THERE MAY BE GHOST BIDDERS

Some bidders collude with the auctioneers to drive up the price of an item, according to Hong Heng Mobile Auction founder Lim Jiafeng.

He has been hosting live web auctions even before they started trending. And he knows of bidders taking part in shill bidding, in which they make bids just to lure others to follow their lead, thereby cheating legitimate bidders.

2. HOW DO YOU SPOT THEM?

During one auction, Lim pointed out the ghost bidders to Talking Point host Diana Ser — when a genuine buyer made a bid, they outbid him or her by a wide margin.

Talking Point host Diana Ser with Hong Heng Mobile Auction founder Lim Jiafeng.
Ser with Lim Jiafeng.

In this case, they increased the bid by S$10 to S$15 each time, whereas the genuine bidder’s increment was S$5, “which is normal”, said Lim, as “nobody wants to pay a high price”.

He added that ghost bidders sometimes work in teams, outbidding one another to drive up the final price.

“The smarter ghost bidder would mimic a real buyer. They’d be asking questions … about the product, maybe the specifications and the features,” he said.

“Imagine there are five to six persons doing that. So it makes it (the fake bidding) very foolproof.”

3. LOOK OUT FOR THE TIMER

A telltale sign of a rigged auction is the lack of a timer. Legitimate auctions usually have a time limit for buyers to place their bids, but when there is none, it means the auctioneer can delay closing the auction.

The countdown has begun for prawn bidding on Leong's live-stream auction.
The countdown has begun for prawn bidding on Leong's live-stream auction.

He or she would do that after a ghost bidder has raised the bid. So once a legitimate bid is made for the item, “the countdown would suddenly go very fast”, said Lim.

A timer ensures that everything is fair, as “it isn’t (for) the auctioneer to decide who gets the item”.

4. THERE MAY BE DEFECTIVE OR RETURNED ITEMS

Some auctioneers sell products, especially electronic items, very cheaply, like a wireless mouse for S$1 or a hair curling iron for S$5. This may mean the product is defective or was a returned purchase from online retailer Amazon, said Lim.

The retailer has a generous free-return policy, and these items are bundled into pallets and sold by weight. Every year, an estimated 200 to 400 tonnes of Amazon return pallets are shipped to Singapore.

Typically, in a pallet, about a third of the items are used, another third are new and the remaining are discontinued stock, said Amoz Lee, who owns web auction house Lelong Factory.

Amoz Lee showing Ser the items in an Amazon return pallet.
Amoz Lee showing Ser the items in an Amazon return pallet.

To spot an item from an Amazon pallet, look for a return label — a bar code with “a four-digit number or maybe an alphanumeric” — advised Lim.

5. NOT ALL SELLERS ARE UPFRONT ABOUT IT

While many items auctioned on live streams come from Amazon return pallets, some sellers are upfront about defective items but others are not.

Programme host Diana Ser managed to bid successfully for several items, but out of 12 products, two — a wireless mouse and a pair of Bluetooth earphones — did not work.

The earphones also looked “greasy”, as if they had been used before, she said, while noting that some of the sellers do offer a window for the exchange of any defective product.

“The disappointment is really when the seller passes off used items as brand new. But defective items aside, it’s hard to argue the prices weren’t a steal. And snatching bargains does feel good,” she added.

“It’s really buyer beware. When things are so cheap, there’s usually a catch. And yes, it can get addictive.”

Watch this episode of Talking Point here. New episodes on Channel 5 every Thursday at 9.30pm.

Rheon Garcia with some of the items he snared in livestream auctions.
Garcia with some of the items he snared via auction.

Source: CNA/dp

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