Jump to content
Maestronet Forums

Buyers asking for "reserve" price


sweetmusic
 Share

Recommended Posts

Some sellers even include the reserve price right in the description.

I never understood the logic of that.

Personally, I don't like to bid on "reserve" auctions.

Seems to be a useless, silly waste of time to me!

However, I have emailed sellers for the reserve when I was really interested,

and they've given it. I then bid slightly over the reserve and bidding then

continues as normal with "Reserve Met".

Can those who like reserve auctions explain why?

Why not just use reserve price as the starting price?

Maybe I am missing something here.

Jimbow

Link to comment
Share on other sites

Quote:

Can those who like reserve auctions explain why?

Why not just use reserve price as the starting price?

Maybe I am missing something here.

Jimbow


I agree. I avoid reserve auctions like the plague. It seems like the vast majority of sellers who put reserves on are people who really don't have a desire to sell the item (as the reserve is generally way too high), or think that their item is worth more than it really is.

I think the "logic" behind it is that if you start the bidding at $1.00 with a reserve, you'll get more interested parties. However, the people who are bidding 1, 5, and 50 bucks on a $500 item are not the ones who will be bidding in the end (if your reserve ever gets met). And, you are not giving the serious bidders the true picture of what they will need to bid to win the item. So, many of them just forget about the auction and move on. Some will come back, but those who don't are lost customers. Whereas, if you start the bidding with the lowest amount you'd actually accept, you've already eliminated the $5 and $10 bidders, and the serious bidders know the minimum you will accept and if they are willing to pay it, they will put it on a watch list, bid immediately, or snipe it.

Personally, if I'm a potential bidder, and the seller put a $500 reserve on a $200 item (which is often the case), it would be nice to know that so I don't waste my time. Plus, many sellers get snippy when you ask for their reserve price, it's just not even worth the trouble. For this reason, I generally don't near reserve items unless the reserve has already been met.

The only instance where I may bid on an item with a reserve is if it has a reasonable buy-it-now price. Some sellers will put a reserve on a buy-it-now auction so they can start at $1.00 without the BIN price going away. If you have a regular (non-reserve) auction that starts at $1.00 with a BIN price, the BIN price disappears at the first bid.

Link to comment
Share on other sites

Many sellers choose to use reserve auctions because of the bidding action that occurs thinking that if others see lots of bids on their item, that there is something special about the item, but the reserve still protects them from having to sell the violin for too little if the bidding does not exceed the reserve amount. That's about the only benefit I can see for a seller to use it. I start many of my auctions for my "reserve" price and often with a "buy it now" option slightly above that, or sometimes I just list it in store format and let only people who are looking in that particular price range decide if they want it. These methods do not create a lot of bidding action but it also eliminates having to play the bidding and guessing game for many.

Link to comment
Share on other sites

Not everyone who sells on ebay put reserves on which are more than the items worth, it is basically a price that they are prepared to sell for. It is also expensive to set reserves and ebay offers little incentive for buyers not wanting to sell for under a certain amount.

Alot of the items i sell are below what you`d pay at auction , i give myself a small profit margin but refuse to sell for say half of what i paid for it, which often happens when you don`t have a reserve.

I have in the past tried to avoid paying the reserve and stating that i would pull the auction if a price i was happy with wasn`t achieved by say the 12 hours deadline.This always gets reported and ebay pull your auctions.

In the U.K at normal auction houses it is not illegal to bid on your own items (or have someone else bid for you)as long as you haven`t a reserve on it.This is basically to protect the sellers from losing out ,ebay has no options for this and people covering ebay call it shill bidding.( i`d call shill bidding pushing the item to a ridiculous price far more than its worth.

I buy items at normal auction houses and sell them occasionally on ebay , with one exception i haven`t bought anything on ebay for around two years.

It is the people who buy on ebay then sell again on ebay that you have to watch for, as they are often recycled with different labels,etc..

Link to comment
Share on other sites

I've never sold on ebay but I thought that if you started the bidding at what was effectively your reserve price, and it didn't sell, then you have to pay a commission based on the opening price.

I therefore assumed that if you started the bidding at, say, $1, but set a reserve price, and it didn't reach that reserve, you would just pay a commission based on the highest bid. Is this not correct?

Whatever the case, I never understood the logic of sellers who refuse to reveal their reserves as though it were a state secret.

Link to comment
Share on other sites

There are two things a reserve price does. It tells a potential bidder that his bid can't win the item, or it tells him that he is bidding more than the seller wants to get. Either way, it discourages bids. Perhaps the only advantage is the suspense that develops trying to guess where the reserve is.

If you want to be real sneaky about it, have your dog get an ebay account, bid a $15000 proxy to trip the reserve, and then bid up your dog with your regular account with one bid to an unreasonable level. Then cancel both yours and the dog's bid hours before the auction ends and watch the price revert back to below the reserve. Then with the real user name, snipe the auction at the end for the reserve price. The exercise tells you what the reserve is, shuts off interest by other bidders because the price is sky high, and lets you bid the auction at the end without competition. This is called a "double reverse shielded bid reserve bomb".

Link to comment
Share on other sites

No that's not how it works, the final value fees are based on the price at which the item actually sells for regardless if there is a reserve on the item or not. Apart from the original listing fees, the fee you pay for selling an item through ebay is based on the final sale price only. If the reserve is not met there are no fees due (except listing fees) even if there were bids below the reserve amount.

Link to comment
Share on other sites

Upon listing the auction, you are charged a listing fee. The listing fee for an auction with a starting bid of $299 and an auction that starts at $1 with a reserve of $299 is about the same, because e-bay charges a fee for the reserve (based on the price). As a seller, you are not saving yourself a bundle of money by setting reserves--at least not on e-bay.

Unless you publicly disclose your reserve price, I believe that you are just discouraging potential buyers. Also, some sellers do this to build up a "buyer pool" for the item that they can later e-mail to sell the item off e-bay. This is against e-bay policy. Or, a more "ebay legal" scenario is that your reserve price wasn't met, but it was only a few dollars shy. So, you send the high bidder a "second chance offer." If he/she accepts, you are then charged a final valuation fee on the second chance offer (which is generally less than your reserve). In this case, you have lost money, as the buyer may have just paid the higher starting bid price in the first place had you set no reserve. Or, the buyer may have found another auction by the time you send out your offer, which is a more likely scenario. Either way, you lose out as the seller.

Regarding the final valuation fees, it is true that you are not charged a final valuation fee if your reserve is not met. But, by the same token you are not charged a final valuation fee if no one bids and there is no reserve. However, if you get one bid and you have set no reserve, you actually sold your item (congratulations), which was the point of listing it in the first place.

Link to comment
Share on other sites

If you put a reserve of 20000GBP on a auction in the U.K your reserve fee would likely be around 100 GBP.

If your item sold you`d be charged 540.50 GBP, not sure whether that includes VAT either. bUt you would be refunded the 100GBP reserve fee if it sold, if not you lose it unless you relist with the same reserve and it then sells.

I think it actually works out a lot cheaper than if you sold it at an auction house.

Link to comment
Share on other sites

Glenn, No there is no difference in the amount of the listing fees in that scenario, but your final value fee (if the auction is succesful with bids) then will be based on a % of the sale price.

Now in comparison, if you list the starting bid at $1.00 and put a reserve of $20,000.00, then your listing fees will be about $104.00, plus you would then have to pay the final value fees if the reserve was met and the item sells. Just another reason I do not use reserve auctions.

Link to comment
Share on other sites

Excitement it does create ... But the only issue with that type of listing is that you may not always get back what you have invested in the item to begin with and are then obligated to sell the item for the highest bid price even if you loose on it, and that is a risk I do not like!

I feel that if you start the bidding at what you need to get for it with no reserve, you eliminate some fees, unserious buyers, shill bidding games, reserve amount guessing and are still able to protect your investment all at once. Although, it's not really an auction then is it ... I like to think of it as more of an advertisement!

Link to comment
Share on other sites

Quote:

If the object of the excercise is to attract as much attention as possible, my own experience is that auctions starting at $1 with no reserve cause most excitement. That is the format I would go for if I came to sell on ebay.


If you're 100% ready to get rid of an item, this is definitely the way to go about it. However, as Joseph stated, you may lose your shirt if you don't get any/enough bidding activity. The "safe" way is to just set your starting bid at a reasonable amount. If you get no bids, you do lose your listing fee (unless you relist and sell the item), but that is minimal compared to what you may lose if your starting bid is extremely low and there is little or no interest in the item.

Link to comment
Share on other sites

From the site:

Basic Fees

--------------------------------------------------------------------------------

When you list an item on eBay, you're charged an Insertion Fee according to the table below. If the item sells, you are also charged a Final Value Fee. The total cost of selling an item is the Insertion Fee plus the Final Value Fee.

Insertion Fees

Starting or Reserve Price Insertion Fee

$0.01 - $0.99 $0.25

$1.00 - $9.99 $0.35

$10.00 - $24.99 $0.60

$25.00 - $49.99 $1.20

$50.00 - $199.99 $2.40

$200.00 - $499.99 $3.60

$500.00 or more $4.80

Final Value Fees

Closing Price Final Value Fee

Item not sold No Fee

$0.01 - $25.00 5.25% of the closing value

$25.01 - $1,000.00 5.25% of the initial $25.00 ($1.31), plus 2.75% of the remaining closing value balance ($25.01 to $1,000.00)

Over $1,000.01 5.25% of the initial $25.00 ($1.31), plus 2.75% of the initial $25.00 - $1,000.00 ($26.81), plus 1.50% of the remaining closing value balance ($1,000.01 - closing value)

The Insertion Fee for Multiple Item Dutch Auction and Fixed Price listings is based upon the opening value of your items. The opening value is the starting or the fixed item price multiplied by the quantity of your items. The maximum insertion fee for any Multiple Item Listing is $4.80.

The Final Value Fee for a Multiple Item Dutch Auction, is determined by taking the Final Value Fee of the lowest successful bid and multiplying it by the number of items sold. Multiple Item Fixed Price listing is calculated per item sold, based on the final sale price of the item.

Reserve Fees (fully refunded if item sells): Hide

Reserve Price Fee

$0.01 - $49.99 $1.00

$50.00 - $199.99 $2.00

$200.00 and up 1% of Reserve Price (up to $100)

Link to comment
Share on other sites

For buyers, it is the state tax that you should be paying for purchases from out of state. Here in NY it's another 8.25%. So if you buy out of state from ebay or bid from out of NYS on a Tarisio (where they are located) auction in October, purchase a nice cello,for example, your obligated to you home state to pay the tax on it's value. That is unless you have a resale certificate.

Link to comment
Share on other sites

Quote:

And don't forget to pay your tax, weather your buying or selling. IRS is watching.


Or take your loss, if you didn't make a profit. I've probably lost more money that I've made on ebay sales. If the IRS wants to come after me and try to collect their $2.50, then, in the words of the leader of the free world, "Bring it on". I'll probably end up with a deduction that will take me 8 hours of paperwork to document.

My approach is the one advised by George Carlin:

"Don't sweat the petty stuff, and don't pet the sweaty stuff."

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.


×
×
  • Create New...