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eBay Reserve Pricing
Home Business Auctions / Classifieds
By: Greg Kusch Email Article
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At this point, I’d like to mention the concept of the eBay reserve price. In an auction-style listing, the seller can set a minimum price for an item, such that if bidding never reaches that price, the eBay auction will end with the item unsold. That minimum amount is the reserve price.

Why set a reserve price?

Sometimes sellers decide that, for whatever reason, they simply cannot sell an item for less than a given price. But they’re concerned that their minimum starting price will be just high enough to scare off potential bidders. Using the eBay reserve price option allows them to set a lower starting price—in hopes of inspiring that auction fever—but still assures them that, if they don’t get their minimum, they don’t have to sell the item and thus will be able to relist it later… and perhaps get their reserve price, or more, at that later time.

The eBay listing for such an item will note only that a reserve price exists, and whether or not the latest bid has met the reserve; the reserve is never displayed to bidders, but they are permitted by eBay’s policies to ask the seller about the reserve price. The seller, in turn, is free to release that information to the bidder, or not.

As with deciding on your starting price, you should be realistic about setting a reserve price if you choose to use that option. Keep in mind that setting a very low starting price in relation to your eBay reserve—for example, starting bidding at $1.00 when your reserve price is $500.00—could backfire; bidders may get tired of bidding if they see 30 or 40 bids that have yet to reach the reserve. Your starting price should be far enough below your reserve to inspire people to bid, but close enough to it to give them a realistic hope of reaching or surpassing the reserve with their next bid or two.

If your reserve price is significantly higher than the average eBay selling price you find in your research of completed listings, you may want to consider holding on to the item a while, to see if the closed auction prices increase over time – or to see if your desire to set such a high reserve changes. There is, after all, no law that says you have to sell it right now, or at all. An inclination to set a high reserve price may be your psyche’s way of telling you that you aren’t quite ready to let that item go. Listen to yourself and act accordingly.

To sum up, you must do the necessary research to determine a realistic price range for your item – while also keeping in mind human nature and our tendencies both to look for bargains and be untrusting of too good a bargain. You must assume that you will not get the price you most want, particularly if you are selling something with sentimental value… but understand that there are ways to let human nature work in your favor to nonetheless maximize your potential profit.

Greg Kusch is the most widely quoted eBay expert and one of only 23 certified eBay trainers. Have questions? Ask The eBay Expert

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