posted on October 7, 2000 12:58:21 PM
As a buyer can you experienced sellers explain the rational of a "Reserve Price Auction" to me? Why not just list the minimum opening bid as the lowest you will accept?
To give an example, one eBay stamp auction has a reserve price on a stamp with a $450.00 catalog value, but a minimum starting bid of just 1 CENT!
WHY use a reserve price? I know what eBay says, but what would be YOUR reasons?
posted on October 7, 2000 01:08:02 PM
For one reason, if you list an item at what it's worth, your listing fee is much higher (which you cannot get back), but if your item sell you get the reserve fee back. Another reason is to generate interest in the item and to get several people bidding on it. This does several things...gets a little bidding war between different customers which drives the price higher...sparks interest from other customers because they see how many other people have bid on the items and have a look for themselves...gives you a very good idea of what the item is worth to the eBay community. I personally never start an item out high, but always start it at .01 - 1.00. (with no reserve) That's my 2 cents.
$$$coyote$$$
...edited to add this:
I forgot to mention, that I have been burned a few times, but not many. I have taken a couple of sizeable losses by not doing a reserve and starting my item out at .01, but hey that's the risk you take and that's the appeal of eBay...knowing that you just might find that 1 item selling for 1/10 of what it is worth! Later.
[ edited by coyote0 on Oct 7, 2000 01:13 PM ]
posted on October 7, 2000 01:22:14 PM
Reason for reserve auctions are very valid and the logic works if buyer would just let seller worry about how to sell there item and stick to buying there would be far less moaning and complaining.
MYOB is a good rule here how many buyer tell walmart how and what to sell and for how much, Not many I assure you.
frist if I had a $500 item and I couldnt take less then $500 and started the bid there no one but no one would bid from there up.
second it cost a lot more to list $500 then it does to have a reserve price. there was far less handleing fees before buyer started screaming they hated reserve auctions.
if I list a $500 item with a $10 start price and a $500 reserve I will get more earily bids and for the most part the key rule is people are more likely to bid on a item after it has one bid then item with none.
people will bid a number of times on reserve auctions all day long the the number of bids is higher and eventaully the few who really want the item will met and beat that reserve price.
also when you list low with a good reserve price on these high end items you dont find $10 start price no reserve $300 handleing its a more honest direct way to let the buyer know the item has much greater value then a large hidden hadleing fee also this way ebay gets there cut of the actual FVF
posted on October 7, 2000 02:30:50 PM
The bottom line with Reserves is that nobody is wrong and nobody is right. If you sell, it's your choice to use a reserve or not, I never use a reserve and always start low, it doesn't matter what the item is worth, just what you paid and what the high bidder will pay. If you are a buyer, your choice whether you want to bid or not. That's pretty simple, I just don't understand why people waste time complaining about it.
posted on October 7, 2000 02:56:04 PM
(1) If a seller isn't familiar with what an item might bring (e.g. a handcrafted widget), a reserve allows him to see whether what he hopes to get for the item is in line with what the market will bear without forcing him to lose his shirt on the sale (i.e., the item doesn't sell if the reserve isn't met).
(2) Even if his widget is of better quality, if other widgets are listed with an opening bid of $10, seller isn't going to get any looks at HIS widget if he has an opening bid of $50. He can list the item with an opening bid of $10 and a reserve of $50, and still get some hits, with the expectation that once bidders SEE his widget, they'll realize its worth. This is the rationale behind your $450 stamp example.
But really, pprescott, why as a bidder do you care? Bid what you think the item is worth.
Reserve auctions basically keep a seller from losing his shirt. I agree they are kind of a turnoff to bidders and have only used it once.
A seller needs to at least break even which can be tricky to do when bidders do not know or will not bid a reasonable amount.
Many sellers are willing to sell below their reserve if they get bids close to the reserve amount, but they aren't obligated to do so. If you should get the high bid, it's ok to ask if they are willing to sell...it's usually negotiable. Remember that eBay does not consider this an official sale and you are on your own if something goes awry.
