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How Bidding Works
In the Diablo auction house, when you bid on an item, you enter the maximum price you are willing to pay for the item. The system then automatically outbids anyone who bids lower than you, increasing the current bid accordingly. The number you enter is not revealed to anyone. What people see is basically the amount the highest bidder needed to bid in order to outbid the 2nd highest bidder.
First bidder on an item doesn't have to raise his bid. Therefore, if you click "bid" and the default amount entered for you is the same as the current bid, you know that you are the first to bid on an item.
Obviously, you can only bid with gold that you have, and that gold would be deducted fully when you bid. Don't worry, you'll get your gold back (in the "competed" tab) when you get outbid, or get part of it back if you win the auction for less than the amount you entered.
When you see an item with 1mil current bid
When the auction times out, the highest bidder gets the item for a bit more than the 2nd highest bid.
With this system, it's theoretically safe to place your bid at any time, and if you bid high enough you will win. However in practice there are more factors to consider!
The Uninformed Masses
Since there is no explanation of the system anywhere obvious, most players are not aware of this system.
What many seem to do is just bid the default amount, and wait until they get outbid. When they get outbid, they go back to the item and re-bid the default amount. If they don't visit the auction house between the moment they get outbid to the moment when the auction times out, they lose an auction that they might have won if they initially bid the correct amount.
Some would blame bots to instantly outbid them, while in reality it is simply someone who placed a higher bid originally, and you are simply not aware of it (there is no way for you to find out other than trying to place a bid and see him automatically outbidding you). This isn't a bot - This is simply how the system works.
As the auction nears ending, a lot of people would try to repeatedly place a bid on the item in hopes to win it. This means they might pay more than they are willing (since they don't think before they place the bid), but this also affects the highest bidder! Every time they click the "bid" button, they raise the amount the highest bidder has to pay.
Bid Last Minute!
Why? Because of those people who keep hitting the bid button. Every time they hit it, they increase the amount you have to pay. The less time they have, the less you will pay for the item. This may only apply when the 2nd highest bidder belongs to the uninformed masses, but since there is no downside to last minute bidding you might as well just do it and enjoy a chance to get the item for less than you would if you just bid earlier. The later you bid, the more difficult it will be for such people to spam the bid button to try and outbid you (be it successfully or unsuccessfully).
Another advantage of bidding last minute is that you get to keep your gold. Placing your gold away for 1-36 hours is generally not something you want to do, because you never know what kind of amazing deals you'll find during that time and might be unable to buy because you placed your gold on an item you might not even win.
The only situation where you should bid on an item ahead of time is when you know this might be the last time you're visiting the auction house before the auction times out and aren't trying to snag the item cheap. While in a situation where the 2nd highest bidder is informed about how the system works last minute bidding provides zero benefit, since you never know who that person is, it's always best to bid last minute if possible. It is however not necessary and definitely isn't guaranteed to reduce the price you will pay or make you win the auction. But *sometimes* - It just might...
Some items are less likely to get bid on
People generally avoid bidding on items if they don't have to. Be it because they have to wait for the item, because they have to pay as much as another person is willing to pay rather than snagging a cheap deal, or because the items are difficult to search for. Keep in mind, though, that even items that have reduced competition may end up costing just as much, as it only takes 1 competitor that bids high enough to get the price to jump. It'll simply happen less often on items that are less likely to get a bid.
Items with high buyouts are less likely to get bid on (though not as much after latest hotfix). Often players will search the auction house with a max buyout filter, and thus will not see any item available for bidding if it has a high buyout price. Then, they might look at items with no buyouts so they might bid on them, but may neglect to look at items that do have a buyout.
When selling an item, I believe you will usually be able to squeeze more gold out of it with a proper buyout, since less people spend time bidding due to its various disadvantages. However, if you don't know the price, setting an absurdly high buyout may make potential bidders miss out on the item and thus you will end up with less gold in your pocket. In any case, always set minimum bid to something you would be happy with, and not to something so low that will make you think "I should have just kept the item" when it ends up selling for that minimum bid.
People don't bid on low price items! There are a LOT of them, and their prices are very stable. No reason to bid, and no reason to expect anyone to bid on a low quality item. Always place a buyout on low quality items, even if it's a bit cheaper. You might lose some gold, but you'll be able to sell more of them. I'm sure you find a lot of low quality items, therefore the space they take up on the AH is definitely an issue you don't want to enhance. If you're not sure whether the item is worth 10k or 20k, just list it for 10k and be done with it. If you try to get people to bid on it, not only you're guaranteed for the item to stay up for 36 hours, but you're also likely to sell it for less than its value, since most will be willing to pay a few extra measly pieces of gold just so that they don't have to wait. People are only willing to wait for expensive items that they have spent a significant amount of time farming the gold for and searching them on the auction house.
Auctions ending at odd hours are less likely to get a bid! Be it due to people who are in one way or another aware of the benefits of last minute bidding, or simply because people who didn't want to put their money away on an item they won't even win, those items simply get less competition. Since auctions are now 36 hours, there are a lot of items that end at such odd hours! After all, if you place an item at prime time, it will time out early in the morning when nobody is online. If you can get online at those times and bid on those items, you have a somewhat higher chance to win them at a lower cost. Of course, you can perform the search in advance, since those items must be on the auction house for at least 36 hours anyway, and only get online when the auction is about to time out.
One last thing - Bidding on items is IMO the second best way to buy items for a good price. The best obviously being buying items with 1d11h/1d12h left that were listed too cheap. The point here is that items that haven't sold for more than 2 hours will likely not sell - If they were worth it, someone would have bought them already! You will rarely (never?) find an item with less than 1d11h left that will be a better deal than what you can get from bidding, since with bidding you are guaranteed that there is at least 1 other person who was willing to pay almost as much as you paid. Assuming you aren't the first bidder, of course (and for this reason you should avoid placing first bids, unless it's a last minute bid on an item you are absolutely sure is worth it).
Hope this helps someone!
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Originally Posted by hetsig
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