What good does a "Reserve" do in an ebay auction?

hchcoin · February 21, 2011 9:44AM

I just watched an 1822 Capped Bust Quarter go unsold in ebay because the reserve had not been met. As a seller, why not set your minimum bid at your lowest point versus using a reserve? Is it just to save on listing fees? If you use a reserve to lower your listing fees, why not put the minimum in the description of the item so the bidders know where to start? I don't get the benefit since ebay tells the bidder the reserve has not been met as the bidding is going on. At all the regular auctions I have gone to, no one tells you if the reserve was met until the bidding ends. Help me understand this ebay reserve strategy. If you really want to sell the item, why not just a minimum bid on the item?

fastfreddie · February 21, 2011 10:02AM

IMHO it's all about generating interest in your listing. Setting a price too high may not generate any bids even if its a good and/or fair price. I just won an auction in which the seller started the bid at trend ($500)+ $75. No one bid but me. The coin has a fair value of trend $500 + $200 to $300. The seller may or may not have known this. Assuming he did and was thinking it would get bid up. Well, at $575 it's going to keep many from bidding. If he had started at $1 with no reserve chances are the realized price would be close to its real value. Or he could have started at $1 and had a reserve of $575. Either way he would have been better off and would have generated more bid activity. Everyone likes to think they can get something cheap.

coinguy1 · February 21, 2011 10:02AM

<< I just watched an 1822 Capped Bust Quarter go unsold in ebay because the reserve had not been met. As a seller, why not set your minimum bid at your lowest point versus using a reserve? Is it just to save on listing fees? If you use a reserve to lower your listing fees, why not put the minimum in the description of the item so the bidders know where to start? I don't get the benefit since ebay tells the bidder the reserve has not been met as the bidding is going on. At all the regular auctions I have gone to, no one tells you if the reserve was met until the bidding ends. Help me understand this ebay reserve strategy. If you really want to sell the item, why not just a minimum bid on the item? >>

I think that EBay charges more for a listing with a reserve than for one with a minimum bid.

I look forward to hearing what others have to say, regarding any advantages to using a reserve, as opposed to a minimum bid. My guess is that the one advantage of a reserve, is that its unknown dollar amount doesn't result in a psychological price barrier/cap the way a minimum bid does. The other, being that with a reserve (and not a high minimum bid) at least bidding activity is encouraged, rather than discouraged.

vann · February 21, 2011 10:03AM

Reserve listings don't do anything for a seller other than increase the fees eBay receives. Ebay charges 1.0% of reserve price (up to $50.00) for items over $200 in which the reserve isn't met. Since the insertion fee is based on the reserve price (not the starting price), you don't save any money by setting a reserve and since most buyers view reserve listings as a waste of time, you are better off just starting the bidding at the minimum amount you are willing to accept. Mostly new sellers are the ones to use reserve since they are unfamiliar with how they work.

TwoSides2aCoin · February 21, 2011 10:16AM

A reserve price ensures the minimum desired price is met. Plain and simple from my view.

hchcoin · February 21, 2011 10:19AM

<< A reserve price ensures the minimum desired price is met. Plain and simple from my view. >>

I get that but what is the advantage over using a minimum bid?

vann · February 21, 2011 10:20AM

<< A reserve price ensures the minimum desired price is met. Plain and simple from my view. >>

And if it doesn't, eBay dings you 1% for the privilege

. If you are selling a unique or rare item with lots of demand a fair reserve might make sense. For most of the widgets on eBay that a buyer has ample listings to choose from it doesn't make sense to use a reserve over a higher opening bid.

mrpotatoheadd · February 21, 2011 10:20AM

I have used a reserve occasionally when the expected ending price was rather high ($1000+), I wanted to let bidders jump in at a minimum amount (first bidder, at least- no telling what he might do) and I wanted to keep the BIN option in play for a while, anyway. If you start a $1000 item out at 99 cents, it would be insane to have a BIN price, but with a reserve of $750, the BIN is available for a while.

TwoSides2aCoin · February 21, 2011 10:23AM

<< 

<< A reserve price ensures the minimum desired price is met. Plain and simple from my view. >>

And if it doesn't, eBay dings you 1% for the privilege

. If you are selling a unique or rare item with lots of demand a fair reserve might make sense. For most of the widgets on eBay that a buyer has ample listings to choose from it doesn't make sense to use a reserve over a higher opening bid. >>

I respect your opinion, and I will keep mine

GrumpyEd · February 21, 2011 10:23AM

I see no advantage in using the hidden reserves, I avoid bidding on most listings with one.
The minimum bid seems better. Just my opinion.

mrpotatoheadd · February 21, 2011 10:27AM

<< I avoid bidding on most listings with one. >>

Do you also avoid bidding on listings that already have bids? It's no different than bidding on a reserve auction, you know.

GrumpyEd · February 21, 2011 11:04AM

<< Do you also avoid bidding on listings that already have bids? It's no different than bidding on a reserve auction, you know. >>

An item already having a bid without a hidden reserve is really going to sell to the high bidder.
With a hidden reserve you don't know if the seller will take market price or the highest bid or maybe they're just showing it off.

mrpotatoheadd · February 21, 2011 11:15AM

<< An item already having a bid without a hidden reserve is really going to sell to the high bidder.
With a hidden reserve you don't know if the seller will take market price or the highest bid or maybe they're just showing it off. >>

Either way, you don't know when you bid how high you need to bid to win and there are only two results- you are the high bidder or you aren't.

I believe your second comment is why lots of people don't like reserves, though- they're not confident in their ability to properly assign a value and need other bidders' participation to reassure them that they're not paying too much.

SamByrd · February 21, 2011 11:57AM

I never ever bid on reserve auctions. I do use BIN a lot and will bid in a auction what I am willing to pay half the time I win. Reserve listings most of the time go unsold at least when I paid attention to them. Set a starting price if your not sure about a one cent start. Reserve auctions get much less attention and bids from what I have seen.

RedTiger · February 21, 2011 12:18PM

A low starting price with a reserve above it, can bring the listing up in certain searches without mention of the reserve. Some searches show the reserve, some don't. Sometimes a bit of extra traffic helps. Some sellers might list some items with no reserve, some others with a reserve. It varies. For the most part, reserves tend to generate more in fees, so that is good news for Ebay. A few sellers might try to complete the transaction off Ebay after getting some bids that don't meet the reserve, so that is another possible motivation.

What good does a "Reserve" do in an ebay auction?

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What good does a &quot;Reserve&quot; do in an ebay auction?

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What good does a "Reserve" do in an ebay auction?