E-Bay Reserve Price Question

[SFerinTEXAS]

I have never sold anything on Fleabay so wondering if anyone who has can answer this. Why do sellers put an Unknown Reserve price on the listing instead of just making that the starting offer price? I don't understand the logic behind that.

[jetmechmarty]

I have sold a lot on eBay and I ask the same question. A reserve keeps many bidders away. The best auctions start very low, with no reserve. There is risk involved, of coarse.

Some people set a very high reserve in expectation of failure to meet it. Often, interested parties contact the seller and the sale made off eBay. This way, much of eBay's fees are avoided. Unfortunately, whatever protection eBay offers is avoided too.

[redbone]

sales ploy

it is stricly a sales ploy. typically when there is a unknown reserve the seller is asking more than it is worth. the bidders being human are naturally curious and will begin to bid just to find out what that reserve price is. when that reserve price is reached, that curious high bidder is now locked into that contractual deal per ebay rules and has made the purchase.

[prometheus578]

Let's say that I want to sell a pile of crap for $500. Now, if I listed the starting bid as $500, people would say:
"I ain't paying $500 for that pile o' crap.

But, if I listed it for $200... (with a hidden reserve)
"Wow, look at the pile of crap for only $200... Im'ma biddin'!"
and when someone else sees that someone else is bidding....
"Man, That's a cheap pile o' crap, Im'ma biddin', too!"

And so the competition and bidding wars starts and I may make more than I asked for.

Of course, if the minimum isn't met, I have to re-list the crap for sale... but I'm patient. (This is a much better strategy than having no reserve and risking having to part with my crap for a mere $253.29)

(That's the best I could come up with after 5 minutes of thought)

[CatatonicBug]

There are additional fees to place a reserve or an initial bid on an auction. I'm not sure what the fees are, or which is higher, but that may be the deciding factor in which version of the "minimum price" is used.

[DGXSER]

The reserve price is the higher fee than an initial starting bid. Substantially higher actually.

The theory is that by putting the reserve price on the item, the bidding will begin and, as Prom so deftly pointed out, the competitive drive will take over. One bids against another, then someone sees lots of bids and figures they will get in on the act, and then you have REAL competition. And people WILL bid more than they planned to get that item just to WIN the auction.

If you start with a high dollar item at your asking price, not alot of people will bid, then folks figure just wait till the end of auction to bid, and they low ball and it ends unsold.

That is the theory anyway. As to fees, you pay to add a subtitle, you pay for more than one picture, You pay for a starting price, you pay for a reserve, you pay for a buy it now price. You pay for longer than 7 days, you pay for shorter than 7 days. The smallest fee to list somethign is about $0.40. Then they get 9% of the sell price for parts sold. Hint Hint, they get no part of the shipping fees though. Funny how it cost $50 to ship a headlight bucket say, yet I shipped the cylinders, with the crank and rods for $25. But then it could be a no reserve, no starting price auction. So their reserve is in the shipping.

[crazy steve]

One reason not mentioned for a 'reserve' price is it will get you more 'views'. If you're searching 'lowest price first', many times you'll see these items that you otherwise may not see with a higher minimum. Some sellers will put the reserve amount in the ad (the more honest ones IMO) and do this for the above reason.

[SFerinTEXAS]

I guess the best way to approach a reserve price item is the same as I would any other, Decide what its worth to you and don't lose any sleep if you don't get it.

[cywelchjr]

One of my understandings on the reserve system is that if no reseve is set, the seller is obligated to sell at the winning bid price, and with a reserve if the reserve is met the seller is again obligated, but if the reserve is not met, the seller is not obligated to sell at that price, but may go ahead and sell for that price if they desire and do so through ebay as well so as to still provide the protections of the ebay process. I've watched live auto actions where vehicles that didn't make reserve still sold to the highest bidder. That's my understanding of what the reserve system is supposed to do.

[crazy steve]

One of my understandings on the reserve system is that if no reseve is set, the seller is obligated to sell at the winning bid price, and with a reserve if the reserve is met the seller is again obligated, but if the reserve is not met, the seller is not obligated to sell at that price, but may go ahead and sell for that price if they desire and do so through ebay as well so as to still provide the protections of the ebay process..

That is correct. If the item doesn't make the reserve but did get multiple bidders, EBay will allow the seller to make 'second chance' offers to sell to bidders, from highest bid first on down at that bid price.

I picked up a $2900 aftermarket 6-speed trans for one of my Sportsters that way. While I wanted one, I didn't have that kind of money. But while looking for other parts, I stumbled across this because of the low initial bids. I took a shot, but didn't meet the reserve. Turned out I was highest bidder, I only missed the reserve by $100, and the seller sold it to me on a 'second chance' for $1500, about 1/2 price of new...

[NYPD]

As a part time seller I place a reserve on items because I know what they are worth and it is the minimum amount I will accept on the item. Otherwise I get the short end of the stick. Plain and simple.

[SFerinTEXAS]

NYPD says

I place a reserve on items because I know what they are worth and it is the minimum amount I will accept on the item

Then Sir for our viewing pleasure You may be the perfect person to answer the point .

Why use a reserve instead of a min bid? Or did I misinterpret your statement?

[natemoen]

If you were to use a minimum bid it would stop people looking for a good deal from getting involved in the bidding. Once (some) people start getting involved in the auction they get caught up in it sand keep bidding beyond what they would have initially considered paying. It's a psychological game.

[DGXSER]

If you sell with a minimum bid number, you can still use the second chance offer if more than one person bids on it.

[jetmechmarty]

FWIW, I never bid on an item that has a reserve. I see reserve and I move on.