Ebay's mysterious RESERVE

Bruce Wutzke · Post by **Bruce Wutzke** » 6 Jun 2004 6:14 pm

First of all, why have a reserve? Why not start the bidding at your lowest acceptable price? Then, some put the reserve price right in the description while others would go to the gallows before they would tell what it is.
Could someone enlighten me on this strategic tactic?

Colm Chomicky · Post by **Colm Chomicky** » 6 Jun 2004 7:31 pm

Just setting the lowest acceptable price may result in no bidding. In theory with a reserve, bidders are tempted to get their feet wet and start the bids rolling, even if the initial bids are rather low. Sometimes a little competition and one upmanship develops. The seller hopes that bidders will eventually get caught up in the auction until the reserve is met or exceeded. Ebay did not invent this, live auctions have been doing this as long as I can remember on maybe one or two items that the seller would rather keep that sell for too low a price.

With Ebay though, sometimes the seller will tell you his reserve if you email him, especially if he thinks you would be willing to bid the reserve. That would not work very well at a live auction if the auctioneer would start whispering things into one or two bidders ears.

Also with reserve if the item does not sell the seller still knows who was interested and how much they were willing to pay. Maybe strike a deal on the side later, or relist with a lower reserve.

Bruce Wutzke · Post by **Bruce Wutzke** » 7 Jun 2004 3:56 am

I appreciate the reply Colm and I see the point you make. I had a bad taste of it though and I guess according to the "rules" there was nobody to blame but me.
I had a bid in on an item and the reserve was not met yet. I was going to spend the weekend in such a place where the shopping would be great for this item. I emailed and told the guy what my top bid was and asked if it would be good enough to buy the item.
He replied that he could NOT give me any clues. Just a little overboard I thought.

Joey Ace · Post by **Joey Ace** » 7 Jun 2004 11:15 am

Good explaination, Colm.
I always thought it was a bit strange, but a throw-back to real auctions.

Can anyone explain how it benifits the seller to keep his reserve secret?

William Peters · Post by **William Peters** » 7 Jun 2004 2:19 pm

Bruce,

As well as what Colm said, I think the cost of listing an item varies with the opening bid price. So it is cheaper to set a reserve, and start the bidding at a low price.

Bill
www.wgpeters.com

erik · Post by **erik** » 7 Jun 2004 2:34 pm

I start auctions at the rock bottom of what I would accept. Most times I either get it or get a bit more. The intent for me is to generate cash quickly. Most of my items sell on first listing. Listing your auction for 7 days and timing it to end when most people are home helps too.

My biggest gripe is the clowns who list a- let's say- an import strat style guitar then put in the heading- " 'name here' guitar not Fender not Gibson" So when you do a search their piece of crap shows up in your browser. I refuse to buy anything from these scammers.

-johnson