posted on July 1, 2003 08:17:56 PM new
As I ran the numbers below, I wonder what your thoughts are on when to use a "Reserve" - when does it make any sense at all?
Scenario #1:
Starting bid: $1.99
Reserve $19.99
Insertion Fee: 55 cents (based on the $19.99 reserve)
Reserve Fee: 50 cents (refunded because it sold for the reserve)
FVF: $1.05 (item sold for $19.99)
The total to sell item: $1.60
Scenario #2:
Starting bid: $19.99
No Reserve
Insertion Fee: 55 cents
FVF: $1.05 (item sells for $19.99)
The total to sell item: $1.60
Scenario #3:
Starting bid: $1.99
Reserve $19.99
Insertion Fee: 55 cents (based on the $19.99 reserve)
Reserve Fee: 50 cents
Do these numbers make sense? What advantage is there to using reserve at all? Do you think anyone gets that much benefit out of a lower priced starting point?
Welcoming your thoughts.
Wayne
Trying to Make a Difference - One Satisfied Customer at a Time....
posted on July 1, 2003 08:32:46 PM new
It doesnt make sense-reserves with a low starting bid are a waste of the buyers time-they suck.I NEVER bid on reserve auctions
posted on July 1, 2003 08:52:04 PM new
Hi Wayne,
I have for the most part done away with reserves on my auctions. 1/2 of my auctions now run with a $9.99 starting bid, no reserve. The other half start with no reserve and opening bids that match the minimum amount I want to sell that item for. Typically for me, that's $19.99, $29.99, $49.99 or $99.99. But this past week I had items start at $75.00 (at a consignors request). All sold for atleast the minimum. I have MUCH better luck with this system than I ever had with reserves and I have been selling for 4 1/2 years. I'm sure there are high end items that require reserves.
I peruse pottery most often... some of the better pieces sell for thousands, in these cases, I could see using a reserve.
posted on July 1, 2003 09:24:21 PM new
It is never Ok to use a reserve. Your #3 scenario is the most likely outcome or worse, deadbeats just trying to see what your reserve was.
posted on July 1, 2003 10:22:38 PM new
Stone - once again you speak in absolutes which are proven not to be correct. There are times when reserves are appropriate and beneficial to the seller. For me, reserves have protected my investment and weeded out the less serious bidders. People writing to ask for reserve have given me an opportunity to interact with potential buyers, justify the rationale behind the reserve level and personalize the transaction a little more.
If I am interested in an intem with a reserve I will place my bid and see if it hits. If I do not reach the reserve I will write the seller and ask what the reserve is. Many times it is within reason, the seller is friendly and helpful with additional info and this will push my willingness to spend a little more. If the seller is unwilling to state the reserve I done with that effort, someone else who is more cooperate will come along sooner or later and that person will get my money.
As for the original question - I think that reserves are generally not appropriate until the $50 or over mark and then it is still a question of competing items, and level of desirability.
If I am listing a higher ticket item I do a search using the main descriptive aspect of the item. If it is art for instance, I input the artists name. I then look at the completed items using this descrption. If bid numbers or closing prices are low I know not to try to use a high opening bid as history shows bidders are not willing to make a big leap. Since I know what I want for this item I will place an inviting opening bid amount but use a reserve to protect my investment. The right buyer may be out there and the item may sell but if they don't happen to check that week, I loose a few dollars in listing fees as opposed to $100 or more on a low bid sale.
Mario Andretti - “If everything seems under control, you're just not going fast enough.”
posted on July 1, 2003 11:42:56 PM new
Neomania: I am with you. I sell some high ticket items that I have sometimes over $100.00 invested in. If I start with a minimum of $49.95, why shouldn't I have a reserve of $150.00? It is different if you are selling something for $9.95. I very rarely have anything in this area. It is amazing that you are such an expert, Stoncold. I may express my opinion but I am never adamant about it. When you say Never, then everyone is wrong that uses a reserve. Right?
[ edited by sanmar on Jul 1, 2003 11:49 PM ]
posted on July 2, 2003 03:19:40 AM new
I like the things I sell for the most part. Maybe if I just sold 100 face plates a week or something I wouldn't care, but there are times I'd rather just keep it for myself if I can't get the price I think its worth. So in that case, determining using reserve is surely in the eye of the seller. ??
posted on July 2, 2003 09:47:57 PM new
It's your money. Go ahead and waste it. And the anguish of deadbeats and lots of bid retractions if they happen to hit your reserve. It has been proven over and over again that reserves are worthless and should be illiminated. And you wonder why it is slow for you? Dump the reserves and start seeing your sales climb.
posted on July 2, 2003 10:10:02 PM new
Reserves are important for at least one reason.
First off, the idea is to get the bidder to click into your auction by showing a fairly low opening bid.
There are many items which historically carry a reserve amount. Bidders know this and don't mind one bit bidding against a reserve. I think it's part of the game.
On unique items (the kind of thing that isn't common on eBay) a reserve is doubly important. There might not be a huge milling throng of folks looking for it and no seller in his/her right mind wants to sell a $100 item for twenty bucks.
Lucy
[ edited by ohmslucy on Jul 2, 2003 10:11 PM ]
posted on July 2, 2003 10:20:52 PM new
Here is eBays policy on reserve pricing. Please note the last paragraph
A reserve price is the lowest price at which you are willing to sell your item. If a bidder does not meet that price, you're not obligated to sell your item. You set your reserve price, as well as a starting price, when you list your item.
The reserve price is not disclosed to bidders, but they will be told that your auction has a reserve price and whether or not the reserve has been met.
All Reserve Price Auctions are subject to a Reserve Price Auction Fee that is refunded when you successfully complete your auction on eBay. If your item does not sell, this fee is not refunded.
posted on July 3, 2003 01:20:07 AM new
The only reason ebay added the Reserve "deposit" is that back when you could get any members address whether you were involved in a transaction or not was that many people were using reserves to avoid closing fees.
People would set unattainable reserves then when the auction ended, if they liked the high bid would email the bidder and arange an off site sale. The reserve fees limited this practice to some extent but it wasn't until they blocked mass accessability to email addresses did they put a serious hitch in it. The reason the fee i refunded is that they are getting that buck or two either way.
Let them raise the fees, I'll still use reserves when I deem them appropriate. I know the value of the items I sell and there is no reason I should accept less than it's value just because the right bidder was not around that week. If I pay 2 or 3 dollars to avoid the loss of $50-100 I don't have a proble with it. Like I have said, despite Stones predictable incorrect assertations, I have great success with my reserve auctions and a 100% completion rate them. My deadbeats are on items unde $20. I have a few in the 20-50 range but over $100 - none.
Mario Andretti - “If everything seems under control, you're just not going fast enough.”
posted on July 3, 2003 09:24:04 PM new
I sell mostly consignment items for friends/family. On the "higher end" items, I almost always use a reserve as I'd feel awful if one of their good items brought a pittance. Also, when interested bidders ask what the reserve is, I always tell them. When I sell my own items, OTOH, I almost never use a reserve...figure it's my own money I'm playing with. But, I don't feel comfortable doing that with my consignee's money.
posted on July 4, 2003 10:21:03 PM new
It is my opinion that there is never an appropriate time for a reserve price auction; it's just another fee that allows ebay to make a buck. Why not just list the item at the minimum price you are willing to accept? Personally, I never bid on a reserve price auction.
posted on July 4, 2003 10:37:51 PM new
I can't imagine a live auction stating a bid at $1 and when it got to $50 an no more bids were to be had the auctioneer said " bring out the next item, the minimum wan't reached on that last item and I can not sell it "? The place would die a quick death.
------------------------------------------
Sargent Stadanko
Senior Investigating Officer, Internet Fraud Unit, International Web Police.
posted on July 4, 2003 10:56:34 PM new
You know what I find very strange?
I seem to be the only seller here that strongly advocates approriate use of reserves. According to everyone else they are horrible fee inducing disatster waiting to strike. News flash - if they didn't work... the would not be used. Just because you may not have need for them does not mean that it is the same for every seller.
I am especially amused though by the large percentage of people that claim that they "never" bid on reserve auctions. My assumption is that most of these people are either lying or are the extreme bargain hunter types that don't bid on high end items anyway. Lets face it - if the percentage of people who claim they "never" bid on reserve auctions was representative of the general ebay population, few reserves would ever be met which would once again result in them never being used.
They are used and they are used successfully by a great deal of sellers. Just because you haven't yet grasped successful usage (or have need to) doesn't mean that other people don't know what they are doing.
CAJUN - I think if you'll read what I posted about why reserves fees were enacted you'll understand. Back before there were fees I knew at least two sellers that never "completed" an auction on ebay but were making a fortune.
Mario Andretti - “If everything seems under control, you're just not going fast enough.”
posted on July 5, 2003 06:28:49 AM new
I don't bid on reserve auctions either. Sorry. It's just a fact. Fewer bids is part of the price that reserve sellers pay.
In the absence of hard data that tells us how many reserve auctions end successfully (I'm guessing less than 1% but that's just me), I don't see how any conclusions can be drawn about reserves as a successful selling strategy for the seller population at large.
I am not a bathtub full of brightly-colored machine tools on Vendio.
posted on July 5, 2003 06:59:20 AM new
i am not sure if you get fewer bids if you place a reserve on your item?
i think you get more bids,there are always bozos who cant help themselves,they will bid on anything ,especially pricey items with starting bid of 99 cents,they know they will never win the items but it makes them feel good they are bidding??
i dont play pool,but how many pool sharks can play wallflower in a pool hall day after day??
another reason for them to bid is that if seller has another id for shill bidding on his own auctions,bidding on other people auction make them look legit!!
posted on July 5, 2003 09:02:41 AM new
Fluffy - I can tell you that in my case, about 75% of my reserves end sucessfully. The ones that have not ended sucessfully lately are ones that I have quite honestly probably priced a little high for the market. Sometims there are items that my head wants to sell but my heart doesn't so I let the reserve settle the arguement
When I set realistic reserves, I have about a 90% sell thru. Maybe I am just more realistic than some that set unsuccessful reserves but I think that the rate has to be a little higher than your estimation (of 1%) or sellers would not continue to use them.
I have noticed that there seem to be a disproportionate number in the Jewelry catagory but in the ones I have seen it is because a seller has set a reserve that has nothing to do with the trends in that catagory. Some of the sellers set reserved like they have a one of a kind pieces when there are three more identical closing the same day.
~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~
I have not failed. I've just found 10,000 ways that won't work.
- Thomas Edison
posted on July 5, 2003 09:08:53 AM new
some items just do not sell well on ebay,like a diamond ring for 12500 recently.
if you list at 9.99,would you set a reserve on it??i would think so!!
how far would the bidding go??into a few thosuands may be??
posted on July 5, 2003 09:58:33 AM new
the debate of reserves.
let me just say, reserves do serve a purpose. they protect the buyer from selling an item for less than what they want to. the real question is whether a reserve is better or worse than starting the bidding at what you would have set the reserve price at.
neon has valid points, however, neon also may have a few things going for them. 1) neon may have a strong following for their auctions. bidders familiar with neon's style of auction may know the reserves are generally reasonable. 2) neon may not always get bids as high as non-reserve auctions. we don't know, because we don't have that info. 3) if neon is selling high end items, collectors and dealers have no problem working around reserves, especially if the item is rare, collectible, or simply highly desired.
i have seen items go on ebay for 1/4 the price if the person sold them in a store, and i have seen the complete opposite. it really depends on the item and supply and demand. reserves work best when the item is rare, hard to acquire, and has a mass market of bidders available. if you have a baseball card that is massed produced, worth a few bucks, and available everywhere, a reserve is not a wise choice. however, if you have a Herman Miller vintage piece of furniture and want to get at least $300 for it, knowing that it is rare and worth perhaps $400 or more, a reserve is a wise choice.
posted on July 5, 2003 10:27:05 AM new
Rusty - I basically use reserve on collectibles with a very narrow niche. Right now I am using them when selling off art from my personal collection.
In my case, the sales are not based on personal reputation or style - it's just that the items I sell with reserves tend to be very rare. (one of the lines I usually use reserves on was foreign line considered a flop at the time and quickly discontinued - now among the hardcore fans of this genre - they are the most sought after related collectible)
BTW - I do think that reserves sometime inspire higher bids. I had an unsuccessful auction of a limited edition piece a couple weeks ago. The next week someone else with the piece (there were less than 500 of these made almost 10 years ago, it always surprises me when they show up in batches) put theirs up as a BIN 20% below what mine closed at.....theirs didn't sell.
~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~
I have not failed. I've just found 10,000 ways that won't work.
- Thomas Edison
posted on July 5, 2003 01:27:32 PM new
reserve auctions have been used by sellers of high ticket items to avoid final value fee,ebay knows that,the sellers know that and so do the bidders.
reserve was free at one time,reserve was one dollar at one time,now reserve is getting pricey.
ebay wants its cut !!
posted on July 5, 2003 01:33:28 PM new
I think if folks are really interested in a particular item, they won't be put off by a reserve price. Case in point...My sister was interested in a piece of Moser glass...She'd decided she absolutely would NOT pay a penny more than $250. She entered her bid but but didn't meet the reserve. End result? She got caught up in bidding (others were bidding too) and ended up winning the auction at a price of over $400. I think the reserve was around $350 and I'm positive she would NOT have entered bidding with an opening bid that high as it was $100 over her absolute minimim. But, she got caught up in the auction process...and got her Moser vase. Reserves, IMHO (if reasonably and realistically set) serve a purpose. Personally, as a sometime-buyer, I'm not put off by reserves and feel that there's a knowledgeable seller on the other end who won't let a valuable item go "for a song" just because interested bidders aren't around that particular week. But, that's just my thinking and a point can be made for starting the auction higher and hoping for the best.
[ edited by blueyes29 on Jul 5, 2003 01:34 PM ]
