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January 12th, 2010

I Don’t Get Reserves.

I occasionally use eBay. For some things, like the Wii I scored earlier this year for a song, it’s great. For other things, like the time someone nearly scammed me out of a computer, it’s not great.

But there’s one thing I admit I don’t understand: reserve prices. Basically, when you start an auction you have the option of setting a reserve price; should the auction not hit that price, the item won’t be sold. But the reserve isn’t revealed to bidders so it’s a guessing game until that “Reserve not yet met” message goes away.

To me this makes no sense. If you have an idea of what you want for an item, why not just start the auction at that price? It seems easy. If I’m selling a Back to the Future plastic cup and I want $5, I’ll start my bidding at $5. Easy.

Can any more established sellers step in and tell me why reserves are useful? Thanks. I’ve got to go bid on a bidet now. (It’s not used.)

Posted in Consumer Commentary

Ryan January 12, 2010, 5:21 am

You can’t spell “bidet” with “bid.”

Cat January 13, 2010, 8:47 pm

I rarely use reserves; but they are, at times, necessary. It’s a matter of psychology.

If I have a lot of books I absolutely must get $30 for, you would think I should start the bidding at $30. Except no one will bid on my auction. It isn’t logical, but it’s true.

If I instead start the bidding at $5, with a reserve, I will probably get my price and more.

Everyone wants to think they can get a super deal on eBay. Starting the auction at a reasonable price takes away this “something for nothing” aspect. Reserves allow the seller some margin of safety, without taking all the fun out of the auction for the bidders.

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