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Reserve price auctions have a secret reserve
known only to the seller. This
reserve price is the lowest amount the
seller will accept for the auction item. If a bidder does not meet
or beat the reserve, the seller is obligated to sell the item.
Once a bidder meets the reserve price, a message is shown on the
auction description announcing that the reserve has been met- this opens the way
for more bidding, as potential buyers know that now they will win the auction if
they have the highest remaining bid.
Although reserve price auctions do have their place, we recommend
only using it for high ticket items, where you aren't really sure of the actual
value. Reserve price auctions have an added listing fee involved, so these
listings should only be for treasured possessions that you may not really be
crazy about parting with... like your personal Van Gogh collection or those
early Babe Ruth baseball cards. For auctions that you are depending on for
your bread and butter, as a seller, stay away from reserve price auctions and
you'll get better profit results, and less relistings. Instead, consider
an
ebay stores listing, where you can list
items with a gallery image for pennies a month!
This system is unpopular with many bidders because
they don't know if their bid efforts will be a waste of time- the seller is not
after all, obligated to sell to them if the reserve has not been met.
However, many
sellers like this feature because it can prevent their item from
being scooped up for next to nothing, if bidding activity or interest in the
item happens to be unusually low during that period.
It also lets sellers test the waters, so to speak,
to see how much an item might fetch- even if they are not sure they want to sell
it, they can slap an astronomically high reserve price on it just to see what
kind of bids roll in. Of course, if the reserve price is met, the seller
is legally obligated to sell the item.
Remember, when you do bid on a reserve price auction, if you have
the high bid but do not meet the reserve, you are not required to buy the item
if it does not sell.
If you do not meet the reserve price on the item, you may be
tempted to contact the seller if it does not sell- you might score some good
deals this way, but it is technically a violation of the ebay terms of service.
Also, some sellers view it unfavorably, and refer to it as a 'garage sale'
offer. Better to bid your true final price during the auction then risk
the negative feedback or seller furled eyebrows that may follow. There is
actually a
Some sellers will set unrealistically high reserve prices
on an item, just so that it will not meet the reserve and they can then offer it
for sale to the high bidder(s) without paying an ebay final value fee (which one
reason why ebay charges more for reserve price auctions). Besides being a
violation of the terms of service at ebay, this seems to be a rather complicated
and time consuming method of getting sales, when there are so many other
legitimate ways to get profits on ebay other than this- avoid such practices and
the possible negative feedback or ebay penalty.
Seller Quick Tip #2
I recommend staying away from
reserve price auctions unless a Buy it
Now price is also used. This way, the bidder knows what your
pie-in-the-sky dream price is- after all, they can see it (the Buy it Now price) listed
on their screen... But, now they know that the reserve price on the item is
set somewhere below this, which makes them more comfortable in
bidding in a reserve price auction. Many people just will not bid in
regular reserve price auctions. without the Buy it Now price set over top of
it, they don't
know what kind of crazy, astronomically high price has been set on the item,
so they may not want to waste their bid.
See more:
Bidding Tips
Selling Tips
Buy it Now Auctions
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