posted on December 20, 2000 06:35:55 PM new
Last week there was a pretty heated discussion about the use of reserve prices. As a bidder, I hate them and won't even bid if there is one. To me it's like walking into a store where the prices are marked but when you get to the counter, they want more.
As a seller, I wouldn't use them. Well, after listening to everyone's comments, I decided to try an experiment and post the same items at them same time, one auction with no reserve and another with a low starting price and a reserve at the same price of the matching item's starting price of the no reserve item. For example, I had an item that I was selling for $450. I listed it once with no reserve starting at $450 and again with a $450 reserve starting at $200. I did this with several items. So far, the no reserve items which I have listed several times, rarely get a bid. The reserve items already have several bids and are almost at the reserve price on the first day of the auction.
To me this is silly. These are brand new items. Their price is pretty easy to find. If an item sells for $500 all over the net and you find it at auction for $450, you might be getting a deal. If you find it at much lower than that, it's stolen or a scamming seller looking to rip someone off. So are the folks bidding $200 really thinking they're going to get it for that? Chances are they're going to be taken for $200 if they win. If it's too good to be true, it probably is.
I run a web site where some of my focus is helping folks avoid getting scammed. I get several emails a week from folks who got scammed. Almost every one says, "I guess the price I paid was too good and I should have been suspicious."
Incidentally, I have an item starting at $45. I state "free shipping if you bid the buy-it price of $52, otherwise 3.50." Can you believe someone bid $50? Don't people think before they bid?
posted on December 20, 2000 06:44:49 PM new
Funny story.
I agree with you that reserve prices are often abused. I ran an auction for a friend last week. Collectible item and I wasn't sure about the real value. One reason I used a reserve. Partly to find out what the item was worth.
My complaint is that eBay's listing page doesn't state there is a reserve in place, so bidders click through thinking they MAY get that $500 item for $10. I think it's unethical, but to answer your question, the reserve auctions get a lot more lookers.
posted on December 20, 2000 07:13:00 PM new
Before the "watch item" feature, I'd often bid at the next increment on a reserve auction just to track the auction on the My eBay page. Some people may still do this.
posted on December 20, 2000 09:03:19 PM newyisgood, your experiment reminded me of a similar effort I read about when I first started selling on ebay about 2.5 years ago.
A seller with experience in such things conducted a study to see whether reserves had a negative or positive effect on final sales prices. He chose a representative item in the antiques category and examined all listings from the past 30 days. Taking variables like condition and listing appearance into consideration, he found that items with reserves sold higher than those without.
Interestingly, he also found that listings with a thorough description, good photo, and tasteful background or other professional-looking html did better than listings lacking these attributes. Back then many sellers suspected this was true, but the premise wasn't as generally accepted as it is today. Of course, back then there wasn't the proliferation of free auction templates available like there is today. Alot of sellers didn't even have the means to post a pic.
Anyway, it was pretty convincing information and I've been a regular user of reserves ever since.
[ edited by fountainhouse on Dec 20, 2000 09:04 PM ]
posted on December 20, 2000 09:19:35 PM new
Told Yah so.
I agree with what you say but I think it boils down to phsycology (sorry about the spelling).
Look at this way if you price it at 450 and only one person bids then the bidder wonders why.Did I over bid.
Okay start with a reserve at 200 opening bid and reserve at 450.00.It gets bids value is perceived someone bids 400.00 so it must be worth at least 400.00.SO I will bid 450.00 then I can only be wrong by 50.00 no big loss.
Thats basically it,I use them a lot it does make a difference.
posted on December 21, 2000 01:56:30 AM new
I DO NOT USE RESERVES EVER.
Nor will I ever.
And yisgood,
as far as your statement,
"If an item sells for $500 all over the net and you find it at auction for $450, you might be getting a deal. If you find it at much lower than that, it's stolen or a scamming seller looking to rip someone off. So are the folks bidding $200 really thinking they're going to get it for that? Chances are they're going to be taken for $200 if they win. If it's too good to be true, it probably is."
Some of us are able to sell items for much less than everyone else simply because we know where to get them cheaper than anyone else.
NOT BECAUSE WE ARE STEALING THE ITEMS OR SCAMMING A BUYER !!!!
You should not say that if a seller offers a great deal it means they are thieves !
You remind me of the type of person who you play a game or sport with and when you beat the pants off of them they jump up and call you a cheater !
posted on December 21, 2000 03:37:42 AM new
Yisgood, what you forgot to include in your sampling are the auctions that start at a LOW BID with no reserve.
In auctions like #3 and #4, the psychology is to get lots of bidders interested early, and hope for a bidding war.
I don't think you've proved that auctions with reserves close higher. And it's been my experience that bidders DON'T LIKE reserve-price auctions. (They also don't like high minimum bids!)
Also, I don't think it's fair to suggest that auctions with low opening bids are scams. Lots of sellers use this practice. Naturally, they hope and expect the bids to go higher than the minimum.
posted on December 21, 2000 06:32:53 AM new
>>"If an item sells for $500 all over the net and you find it at auction for $450, you might be getting a deal. If you find it at much lower than that, it's stolen or a scamming seller looking to rip someone off. So are the folks bidding $200 really thinking they're going to get it for that? Chances are they're going to be taken for $200 if they win. If it's too good to be true, it probably is."
Some of us are able to sell items for much less than everyone else simply because we know where to get them cheaper than anyone else.<<
Let me repeat, I am talking about standard items like digital cameras, not specialty items. I am an authorized dealer for some companies and I get them from the exclusive US distributor. It is not possible for anyone to offer them at the prices I have seen without reserve unless they are stolen or the seller is scamming. Just last week I found a seller offering cameras for well under the wholesale price. He had a zero rating, a hotmail ID and was only accepting money orders or PP non-credit card payments. He had an unverified personal PP account. I emailed PP and suggested that they check his account. Sure enough, the next day he was NARUd. I have found similar auctions on Yahoo and have "won" them at ridiculous prices. Each time the seller, with zero rating, wanted money order only sent to a PO box and was using a hotmail, yahoo or similar email id. With all the fraud stories out there, I am surprised that it still goes on. There is a difference between getting a good deal and trying to make a killing. Con men play on greed and folks looking to make a killing are great targets.
posted on December 21, 2000 06:48:51 AM new
Actually, I don't think that the data "proves" that items with reserves close higher, but I'd say it does indicate that items with reserves are more likely to get bids. That's why I use a lower starting bid with a reserve, when I have a minimum selling price that I feel is too high to make a good starting bid.
always pickersangel everywhere
posted on December 21, 2000 07:54:38 AM new
I sell high end graded sports cards (usually $25-$250 per item), and I find that reserve prices are rarely met. Every time I have used a reserve price, (sometimes I would even state the reserve in my description,) bidders would often lowball the reserve by about 50%. After the auction ended, I would always get bombarded with emails of bidders who "saw my auction and want to deal" or would offer me a fraction of what I was asking.
I understand prices of sports cards are much more subjective, due to condition sensitivity and 'book value' vs. market value factors. (I ALWAYS sell below book value). However, in this market, reserve prices are rarely met for ANY item, unless it is a very high end item ($2500+).
I feel reserves are just used to test an item's value in the marketplace. I rarely bid on any item with a reserve.
