Before the Auction: Determining Opening Bids continued ...
What Are You Selling?
If you're selling common items that show up at online auction every five minutes, check recent closings. If you see a consistent average winning bid amount, you safely can set your starting bid as low as you want and incur a lower insertion fee. As long as you include a photo of the actual item you're selling, the odds favor that your auction will bid up as high as the others will--maybe higher if you do a great job with your auction description.
If you're listing an item that's not all that common, you need to consider a few factors when you set your minimum bid. For instance:
- Is it valuable? If you have a rarity that for enthusiasts represents a sip from the Holy E-Grail, start the bidding wherever you want and run the auction for seven days. If the item carries a high secondary market value and its seekers hunt for it online, write a good title and description, and start the bidding low. Then work the room a little. Announce your auction at the collector forums and don't be bashful about contacting folks whom you know might be interested. (When I listed rare artist prototypes for charity auctions, my starting bids of $1 drew a few astonished stares, but the bidding usually exceeded $500 within the first 24 hours. I nudged this along by emailing the auction URL to several collectors whom I knew would place high bids.)
- Did you pay a lot for the item? If you pulled it out of your attic or rescued it from the neighbor's trash, then you probably don't have a lot invested in it. To draw bids you should price the item competitively. If you paid a tidy sum for it, then factor that into your price floor.
- Are your potential customers watching? If you start your bidding at a penny and nobody knows that your item is up for sale, you might lose out unless you actively promote your listing. If you know you can coax your deep-pocketed bidders to your auction, then you're OK to start with a lower amount. If you're not sure, then you'll need to consider your price floor and the item's current value. Set the minimum bid somewhere in the middle.
Anticipate One Bid
Always assume that your minimum bid--the amount at which your auction starts--will prove to be the winning bid when the auction closes. In other words, count on drawing only one bid. This mirrors the phrase "expect the least and you won't be disappointed" because the bidding might go higher than that one bid. Don't assume that a bidding war will drive the price wildly high. Great if it does, but it won't always happen. Depending on your expected outcome of the sale, set your minimum bid far enough above your price floor to generate some profit and make the whole effort worth your time. Expect some variation in the results.
AW member Freddy57 offered this perspective in a Message Center thread: "I sell computer parts that are in high demand. I start my auctions at $1 and watch them climb. It's more fun for the bidders that way and it creates more excitement for everyone. Once in a while I end up crying while I ship something that sold for much less than I paid for it, but then sometimes I'm laughing as something goes out for much more that I thought it should. It kind of evens out that way."
Since your listings often appear right along with those of your competitors, bidders usually descend on the best value at the greatest bargain. It's your right to entice them.
Nancy L. Hix is the author of Collector's Guide to Online Auctions and Collector's Guide to Buying, Selling, and Trading on the Internet. Her work also has appeared in several trade journals and collectibles magazines. She lives with her husband and two sons in Wheaton, Illinois.