Reserve prices on Ebay listings - why?

[danfoto]

If you want to flog something on Ebay but you won't let it go for anything less than £50 or whatever, what do you gain by listing it with a low start price + reserve of £50 as opposed to with a start price of £50?

My mates and me who can't understand this at all, and therefore rarely if ever bid on items listed with reserves - especially if you message the seller to ask what the reserve is and you get some moronic reply like "youl have to find out wont you".

Seriously, why do they do it?

 

[flecc]

Reserves have long existed in real world auctions, usually without them being known. The reason for them not being known is that, by their very nature as the minimum acceptable, they are a low. When known, people bid low and aim to get the article for as little more then that figure as possible, so it restrains the amount that bidding can rise too.

Fundamentally the seller sees the reserve as their minimum, while potential buyers tend to see it as the value and don't want to pay more. From the buyers point of view, to do so would be like walking into a shop and paying over the marked price.

 

[danfoto]

Hmmm, that makes sense. I guess the problem is actually down to the difference between the real world and Ebay. In my experience, Ebay sellers often set unrealistically high reserve prices, and in my opinion, not disclosing that reserve price when asked via a private message serves no purpose other than to turn the potential bidder right off the idea.

 

[flecc]

Yes, I've seen signs of that over-valuing on ebay too. In real world auctions there's usually more experience about the items in the bidding, and professionals present, so realism is more likely.

 

[Deleted member 4366]

I spend half of my life on Ebay, and have done so for many years. You're quite correct about the reserve price being a bit of a strange thing to do. From what I've seen, having an undisclosed reserve price causes buyers to lose interest. Often, there's no bids.

 

[danfoto]

Exactly. I've just given up with one muppet who "answered" three very simple and straightforward questions about the item he's got listed by ignoring one of them and apparently misunderstanding the other two. He's put a reserve on it ...

 

[flecc]

I only have limited experience of ebay, but from what you both say, the culture is very different from real world auctions, and lacking in manners too. In face to face auctions it's not unusual after the last bid for the auctioneer to announce the reserve hasn't been met, and that causes no annoyance. Not meeting resenve prices is very common in car auctions.

 

[Deleted member 4366]

I only have limited experience of ebay, but from what you both say, the culture is very different from real world auctions, and lacking in manners too. In face to face auctions it's not unusual after the last bid for the auctioneer to announce the reserve hasn't been met, and that causes no annoyance. Not meeting resenve prices is very common in car auctions.

I think it's similar on Ebay, but in a normal auction you don't know whether the reserve has been met until after the auction has finished. Often the auctioneer will give clues that there's no reserve or that it's been passed by using phrases like "it's on sale" On Ebay, everybody wants a bargain and often the reserve is set unrealistically high, so when bidders don't succeed with a few items, they don't waste they're time bidding on future ones if there's a reserve.

Like in a normal auction, there's nothing to stop you contacting the seller after the auction and making an offer, which they often accept.

 

[shemozzle999]

There are 2 simple sides to ebay, buying and selling.
The seller owns the goods and can list it however they like.
The buyer has to accept the sellers requirements. Judgments made by the buyer regarding the sellers methods are irrelevant.

 

[bode]

It is a good idea for a seller on ebay to start at a low price as it encourages initial bids (and buyers often get carried away). If the auction period is nearing the end and the bids are well below what the seller wanted, he has the option to withdraw the item from sale; unlike in "real" auctions, I think.

 

[shemozzle999]

Your right Bode, withdrawals are happening more often, it is not in keeping with ebay's original ideals and I think that ebay will soon clamp down harder on sellers as it can be very frustrating for buyers.

 

[flecc]

On Ebay, everybody wants a bargain and often the reserve is set unrealistically high, so when bidders don't succeed with a few items, they don't waste they're time bidding on future ones if there's a reserve.

Thanks Dave, I can see the problem, very much one of a largely amateur arena. As shemozzle999 says, it's their right, but it is ultimately pointless behaviour affecting everyone as you've shown.

 

[Cyclezee]

I have been buying and selling on eBay for over 10 years and have 100% positive feedback with 1,658 sales.
Very little of this has anything to do with bikes.

The reason I always set a reserve price is more to do with the starting price which I set at 99p.

The low starting price gets people interested in the first instance, especially when they do a search for the lowest price first. Obviously, if I am selling something worth more than say £10, I don't want to sell for 99p, so I set a reserve at the lowest price I am willing to sell for.

I am big fan of eBay, but currently don't sell bikes or kits on it because of the high fees, something that people don't always take into account.

Will I sell ebikes and kits on eBay in the future? Several thousand people view the Cyclezee website, many millions of people view eBay, sure they are not all looking for an electric bikes, but it is somewhere to get noticed even if an auction doesn't lead to a sale.
I did make a point of registering Cyclezee on eBay last year, but have hardly used it yet.

 

[neptune]

If you are selling stuff on Ebay , never use a reserve price , as it puts many buyers off . Instead , put a "starting bid " on the item , being the minimum you will accept .

 

[danfoto]

The low starting price gets people interested in the first instance, especially when they do a search for the lowest price first. Obviously, if I am selling something worth more than say £10, I don't want to sell for 99p, so I set a reserve at the lowest price I am willing to sell for.

Which is a good tactic to use if you reckon that punters looking for whatever it is you're flogging are primarily after a bargain.

Where that doesn't work at all, IMO, is if what you're flogging is specialist or collectable or whatever, and your target punter is both knowledgeable and discerning.

But hey, whatever works for you works for you.

 

[Cyclezee]

Which is a good tactic to use if you reckon that punters looking for whatever it is you're flogging are primarily after a bargain.

Where that doesn't work at all, IMO, is if what you're flogging is specialist or collectable or whatever, and your target punter is both knowledgeable and discerning.

But hey, whatever works for you works for you.

I agree with what you say danfoto, it does depend on what you are selling.
If were selling new electric bikes or conversion kits on eBay I would simply have a fixed Buy It Now price not an auction as such.

 

[timidtom]

It is a good idea for a seller on ebay to start at a low price as it encourages initial bids (and buyers often get carried away). If the auction period is nearing the end and the bids are well below what the seller wanted, he has the option to withdraw the item from sale; unlike in "real" auctions, I think.

I use EBay to raise funds for GOES. It's a bit if a gamble but I usually suggest a very low start price and cross fingers for a while! Generally it's gone very well - except on the occasion when a very nice tow-bar mounted cycle carrier went for just £1 ! Some you win, some you don't ... I was equally upset when a bidding war broke out between three bidders and an old Piaggio scooter went for a silly price.
Oddly no body seems to be tempted to spend a penny on 50 AtoB magazines. Drat, wish I hadn't said that. Nurse! Tablet ?
Happy winter biking!
Tom