Reserve not met-

[Ditty_72]

What's the point of a reserve on ebay?

Seriously, if you don't want an item to sell for less than x amount of dollars, then start the bidding at x amount of dollars, don't start it at 1 cent and put the reserve at 60 dollars. Start it at 60. Or don't put a reserve. Why do people put reserves on items?

[Gxgolfer]

I think stats have shown that the most effective auctions start at .01. It gets alot of looks and people can start up a frenzy which may cause them to pay more than the going rate...

[Leftygolfin]

Seriously, if you don't want an item to sell for less than x amount of dollars, then start the bidding at x amount of dollars, don't start it at 1 cent and put the reserve at 60 dollars. Start it at 60. Or don't put a reserve. Why do people put reserves on items?

 

Im with ya. Its pretty stupid in my opinion. I never set a reserve. If I need a particular price, that is my opening bid. If its something Im just trying to get rid of then I will start it at a dollar.

[Ditty_72]

That's exactly how you should do it. I saw a Ping G2 driver for $20. I put in a 20 dollar bid- reserve not met. Went up to 40- reserve still not met. Went a bit higher, reserve STILL not met. I don't really want the driver that much so I'm done bidding on it unless the reserve price ends up being like, 50.

 

Your way of selling is the ideal way IMO.

[TuffKukae]

on the flipside why do you bid only $20 bucks.. why not just put the maximum you are willing to spend ????

[Ditty_72]

That's mostly because I don't know how much I want to spend. I'm not looking for a new driver, I just came across this and thought "hey, this would be cool to try out". If I really wanted it, I'd use the buy it now (which in that particular auction is $199)

[gjones77]

I have to agree with the whole reserve auction thing, just start the bidding at the lowest price you would accept and let it go from there.

 

I think some times people do that to test the water and see what they can get for an item without having to actually part ways with it.

 

None the less, I usually avoid reserve auctions, I'd rather use buy it now or bid on something, and I usually will put in a bid at my maximum amount I'm willing to pay, and some times increase it if I really want it, but if I just think that if I get it at a certain price that's a deal I'll bid up to that and no more.

 

None the less, I've noticed reserve auctions seldom get their reserves met unless they're selling an extremely rare item.

[dfung]

The reason for reserve price auctions is that the low reserve acts as a hook to keep you engaged with this particular auction. If you set a reasonable minimum bid that is higher than people will immediately commit to, then they may write off your auction and you have much less chance than they may participate at the end, which may be 2, 3 or 6 days from the time they first saw your listing. If you got somebody to make a $25 bid on your Cameron putter, even though that won't meet the reserve, they are vested in the outcome of the auction and are much more likely to check for updates or watch the end of the auction.

 

When there's a reserve price and a low initial bid, potential buyers can engage in wishful thinking. And they'll probably be naturally interested in how it turns out, even if for no reason other than to say "what kind of bozo would bid $800 for that piece of junk?"

 

Suppose you have a $300 putter in excellent condition. You'll take no less than $150 for it which should be a more than fair price. If you set no reserve and a minimum bid of $150, then some people will be interested and bid. But there are probably many more people who have interest in paying around $150 for it, but don't want to commit to it on the spot. The way eBay is structured, there's not that much incentive to get your bid in early, since that make it easier to be sniped at the very end. The problem with this auction is that the people that might have paid $150 might or might not come back at the end. They almost certainly won't get the item if they bid on it when they see it if there's even moderate interest in the item.

 

If you set the initial bid at $25 and reserve price at $150, you will get many more people actively involved in the auction even though they don't meet the reserve. Some people will want to probe where the reserve lies. My eBay will continue to show the status of this auction to all these people which will bring them back as the auction plays out.

 

There's another psychological effect in play here. As the last minutes of the auction tick off, people who are watching it will start to wonder, "Hey, is this putter worth $150? Will $165 do it?" On top of that, since eBay closes the auction at the preordained finishing time, even if there is still active bidding, a carefully placed bid at the right second will give you the extra pleasure of winning by $5. If you were willing to spend $150 on something, then what's $15-20 extra bucks, right? To be successful, you need to engage in guessing at what other people were willing to bid and whether you want to win that badly. The fact that the reserve got people to follow your auction days after they first saw it helps fuel a potential run up in price at the last second. All it takes is two guys who each want to win to stretch the closing price by $30+.

 

This is all heightened if there's a reserve which hasn't been met with minutes to go. If the reserve were ridiculously high, then you've lost nothing by laying out a competitive bid. If it isn't, then you just got a deal.

 

So, all in all, reserve price is just a little more glitter on the eBay circus act!

 

A secondary effect is that the seller gets some feedback on what people are willing to pay for their item. If you set your reserve at $150 and the heat of the close only got people to bid up to $125, then you know that you need to drop your price or work on your listing. Or you could just sell it to the highest bidder who you now can identify.

[dan360]

Many times during an auction for a relatively *hot* item, the heat can die off prematurely as the price increases and the bidders see the reserve still isn't met. Kind of an attitude of "why bid any more, obviously this seller does want it to go anyways".....

 

This happens a LOT on the car auction circuit--most of the time a vehicle with a high reserve will lose bidding interest way before a "no reserve" car. I watched a car last year that the bidding died on at $106,000 when the reserve was announced as "not met"....the crowd actually boo'd the car off the stage.

 

Three days later it went back up at "no reserve" and sold for $187,000. :drinks: (The original reserve was $150,000 btw)

 

If I see an item I want with a "reserve not met" icon, I'll walk on by, knowing the chances of me getting a deal are slim to none. Likewise, I sometimes end up paying way more than I first wanted for a "no reserve" item because I know if I win, I own it.....that whole heat-of-the-moment thing. :drinks:

[TheBUNKY]

I agree with reserve auctions, however I rarely use one.

 

It does protect the seller. I've gotten burned before wishing I had put one on. Last February to be exact when I sold a partial set of PING S59s really, really cheap. 6 - Wedge, 1/2" short, black dots, ZZ65 shafts, 8 of 10 condition.......sold for $125.

 

 

Just bid what you can, the market price will determine what it sells for.

[agoodgolfer]

There is also comfort in bidding on an item that has 25 bids vs 3. If a 200 dollar club starts off at 1 dollar, there is likely to be many 5 and 10 dollar bid increments, giving the item more total bids. Buyers tend to feel a little more safe when many others are willing to buy the item - if gives them confidence in the item and the seller.

 

Chris

[Johnny]

range mats are much harder then grass...overtime specs can change. Point is they should be checked yearly atleast. I'd check mine 2-3 a year if I owned a set of irons long enough for that to happen. :drinks:

 

 

There is also comfort in bidding on an item that has 25 bids vs 3. If a 200 dollar club starts off at 1 dollar, there is likely to be many 5 and 10 dollar bid increments, giving the item more total bids. Buyers tend to feel a little more safe when many others are willing to buy the item - if gives them confidence in the item and the seller.

 

Chris

 

very good point

[arkstorm]

A Reserve Price serves a very important function in auctions. It is the lowest price for which the seller is willing to be contractually bound to sell the item. Remember that an auction is a contract as between the seller and buyer where the seller promises to sell and buyer promises to buy. The point that is missing in the previous posts is that if an auction ends below the reserve price, the seller still has the option of selling it to the highest bidder, but is not contractually bound to do so!

 

I set a reserve on almost all my auctions. It protects me from snipers who wait until the very last seconds of an auction before bidding to prevent competitive bidding that would get a fair price.

[dfung]

I set a reserve on almost all my auctions. It protects me from snipers who wait until the very last seconds of an auction before bidding to prevent competitive bidding that would get a fair price.

 

I agree with everything else you said in your post, but this part. I can't think of any connection between a reserve price and preventing sniping. The snipers only drive the price UP not down so it's good for the seller whether you like 'em or not. Had they not been there, you would have only gotten less money from the early bidders. If I'm misunderstanding what you're saying, please set me straight!

 

eBay is structured very heavily toward favoring the buyer rather than the seller in transactions. This is for the same psychological effect as some of these other eBay features - it creates greater suspense focused on the closing seconds of the auction and increases the enterainment value. Having the auction close at a fixed time is the most buyer-friendly element of eBay. In a real-world auction, there's no time limit for bidding and sniping can't really happen. If the bidders want to continue raising the price for a half hour, then they can do so and ultimately, the seller gets the maximum amount anybody was wiling to pay. With eBay, it's like a video game - you try to guess what will be "good enough" and slam it in there with 3 seconds to go. Many auctions end with a snipe bid, so if the eBay policy were more like the real-world, you know that there would be higher bids.

 

eBay makes their money on auction fees which are proportional to the selling price, so this seems like a strange strategy - they're definitely leaving money on the table. But this is truly a case where they make it up on volume. The fixed time auctions lead to a lot of action in the closing seconds, and a lot more people come back for the entertainment value and try again. They would lose that if they changed their policy to close the auction 1 minute after the last unanswered bid. This would also pose a much more difficult technical challenge for eBay's infrastructure since it would have to truly run in real time, which was probably at least part of why it was done this way originally.

[arkstorm]

I set a reserve on almost all my auctions. It protects me from snipers who wait until the very last seconds of an auction before bidding to prevent competitive bidding that would get a fair price.

 

I agree with everything else you said in your post, but this part. I can't think of any connection between a reserve price and preventing sniping. The snipers only drive the price UP not down so it's good for the seller whether you like 'em or not. Had they not been there, you would have only gotten less money from the early bidders. If I'm misunderstanding what you're saying, please set me straight!

 

eBay is structured very heavily toward favoring the buyer rather than the seller in transactions. This is for the same psychological effect as some of these other eBay features - it creates greater suspense focused on the closing seconds of the auction and increases the enterainment value. Having the auction close at a fixed time is the most buyer-friendly element of eBay. In a real-world auction, there's no time limit for bidding and sniping can't really happen. If the bidders want to continue raising the price for a half hour, then they can do so and ultimately, the seller gets the maximum amount anybody was wiling to pay. With eBay, it's like a video game - you try to guess what will be "good enough" and slam it in there with 3 seconds to go. Many auctions end with a snipe bid, so if the eBay policy were more like the real-world, you know that there would be higher bids.

 

eBay makes their money on auction fees which are proportional to the selling price, so this seems like a strange strategy - they're definitely leaving money on the table. But this is truly a case where they make it up on volume. The fixed time auctions lead to a lot of action in the closing seconds, and a lot more people come back for the entertainment value and try again. They would lose that if they changed their policy to close the auction 1 minute after the last unanswered bid. This would also pose a much more difficult technical challenge for eBay's infrastructure since it would have to truly run in real time, which was probably at least part of why it was done this way originally.

 

I know this is not the most polite way to say this, but in the interest of driving home how off the mark you are I should ask whether you are living in reality?

 

Sniping does not drive the price of an auction up, nor is it good for sellers. While you are correct that one main difference between eBay and an open call auction is that there is a set time limit, the fact that items get sniped tends to limit activity rather than drive up price. If sniping was preventable (assuming it is currently not) then every bidder would enter a proxy bid for the most they are willing to pay and over the course of an auction the price would incrementaly increase as various bidders enter competing bids to become the current high bidder. Sniping allows the current high bidder to be lulled into a false sense of confidence that his current high bid will be the winning bid while the 'sniper' waits it out till the very last seconds, thus not giving the previous high bidder a chance to re-bid after being outbid, thus decreasing the eventual selling price.

 

Now, one reason why I ask if you are living in reality is that you cite "entertainment value". eBay is not a form of entertainment, it is a forum for commerce! Sellers, in particular, are not looking to entertain potential bidders, they are looking to sell their item(s) for the highest price possible. Some sellers make a living by selling their goods on eBay. I highly doubt they would not take exception to your characterization of calling them entertainers.

 

Another thing you ought to know, is that eBay does not at all favor the buyer. Just ask any buyer who got ripped off. Not by design, but is just so happens that eBay is heavily seller friendly. After all, eBay makes money from sellers not buyers.

 

Finally, contrary to your belief that sniping increases prices and eBay supports this, etc. eBay is on an ongoing crusade to curtail the practice of sniping. You were right on the reason but wrong on the facts. eBay sees sniping as a threat to their bottom line because they know it lowers the selling price.

 

So there's a free dose of reality. If you like it, the next dose will cost you.

[Johnny]

I'm the king snipe...

 

but I certainly dont hope they learn from yahoojapan on this one. I've seen yahoojapan auctions were if you snipe it, it automatically adds time to the auction. This would totally suck to me. Long live sniping..snooze you loose or in this case if you dont bid high enough...you loose too.

[arkstorm]

I almost forgot to answer your question about how setting a reserve price protects the seller from sniping...

 

Suppose I have an item I want to sell for $100, but I start the bidding at $.01. Now suppose bidder 'A' enters a proxy bid of $5.00. He is now the current high bidder with a bid of $.01 proxy up to $5. Now, if nobody outbids bidder A I do not have to sell the item for less than my $100.00 reserve, obviously.

 

In a fair auction, bidders B,C,D, etc. may try to outbid bidder A by entering their proxy bids, until the item price goes over $100 and the reserve price is met. Thus, someone wins.

 

Now enter bidder 'X' a sniper. Instead of playing fairly and entering into a bidding contest along with bidder A whereby both A and X make timely bids so that the other may have a chance to decide to outbid the other, bidder X just lies in wait to make A feel as if no one is going to outbid him. In the final seconds of the auction, X enters a bid of $10.00 and ends up winning the item for $5.01 (or whatever the minimum bid increment over bidder A's $5 bid turns out to be).

 

Now you see that if bidder A would have increased his $5 bid if only given the chance, the seller (and bidder A) is the one that lost out due to the sniper. In this instance, having a reserve price protects me from being obligated to sell the item for far less than I had hoped.

[dfung]

 

Sniping does not drive the price of an auction up, nor is it good for sellers.

 

 

Well, any bid does drive the closing price up, and therefore it is good for sellers. I do better understand the original point that you were making, with your follow up clarification - specifically, that you gain some protection from a sniper who has the highest bid in a reserve auction but doesn't meet the reserve price. But whether it was a sniper or a normal bidder on top is moot in your case because nobody met the reserve price.

 

As a seller, you can make a decision to sell to the highest bidder. Are you going to offer it to the guy with the second highest bid because he put it in 24 hours before the end rather than the sniper who bid with 4 seconds to go? In your example, you're sort of implying that the second highest bidder would have been willing to pay more if given a chance to respond, but there's no real way to know that. The guy who ultimately had the intent to put in the highest bid can just as likely be the sniper as the next highest bid.

 

If the bid did reach reserve, then you materially benefitted by the sniper's action, even if only by a couple of bucks. Those were bucks that the previous highest bidder didn't put down on the table, although I understand that you're thinking about the counter offer that they didn't have a chance to make.

 

The reality of eBay is that you see sniping at the end of a lot of auctions. Just as sniping is an outgrowth of those rules, how you set a proxy bid is too, so you really need to think carefully about were to set that bid whether it's 3 days from close or 3 seconds. This should have the effect of causing buyers to hope to set a proxy bid that's high enough to fend off a last-minute sniper, e.g., as high as they were willing to bid.

 

The way to eliminate sniping is very simple, and was mentioned by another poster in the thread - when the auction closing time is reached, you add some amount of time (a minute or two) to allow people to bid again and continue until nobody raises. It would be interesting to research how this works out in dollars and cents. When an item is closing at $100, a $5 increment is only worth $0.05 to eBay beyond the $5-8 dollars they're already getting. If you continued to extend the auction to really find the high price that anybody was willing to pay, it would probably become worth pursuing, but in most cases, it's probably "good enough" under the current system.

 

Now, one reason why I ask if you are living in reality is that you cite "entertainment value". eBay is not a form of entertainment, it is a forum for commerce! Sellers, in particular, are not looking to entertain potential bidders, they are looking to sell their item(s) for the highest price possible. Some sellers make a living by selling their goods on eBay. I highly doubt they would not take exception to your characterization of calling them entertainers.

 

I understand your point, but I think it's just a matter of perspective. There are certainly a lot of people who sell a lot of goods on eBay and work very hard at it. A lot of that work is just plain sweat - sourcing things to sell, dealing with customers, dealing with shipping. But a lot of it is also in presentation, much of which starts travelling into being engaging and entertaining. Sellers are successful not only because of what they sell but by how well they attract eyes. And they do that by being entertaining. If you're really serious about getting a new R7, then you can easily do so by heading down to your nearest Golfsmith where you don't have to worry about whether it's real, whether it's damaged, and you can take it back if you don't like it. If I can save 20% by taking all those risks and fending off the last minute snipers I'm either a smart buyer or I'm looking for some entertainment.

 

As for eBay being user- or seller-friendly, there's no question that buyers are taken by bad sellers every day. Although eBay doesn't release those numbers, they imply publicly that the percentage of contested auctions is less than 2.5%. That's still a lot of problems, no doubt, but eBay is the first to warn caveat emptor, and of course, they are only an arms-length player in the transactions which are private contracts between the buyer and seller.

 

When I said that eBay is buyer-friendly, it's on the basis of policies like fixed time auctions. Although eBay benefits directly when closing prices are higher, it's more important for them to be perceived as a place where buyers will get a bargain, which means that they also benefit when closing prices are slightly constrained. That will attract more buyers to look which attracts more sellers and goods, all of whom make a pretty good dollar but maybe not the top dollar that a different system could produce.

 

There was an interesting article recently about Titanium Powersellers, the highest power seller rank on eBay, who have to turn over $150,000/month (!). You can read it here

 

Here's a quote from the article

<blockquote><p>

"There are those who get rich on eBay, but there is also more smoke than fire," he says. "What I've found is that if you're a buyer, you can get incredible deals, but the flip side of that is the sellers have to sacrifice to offer them. There are a lot of people working really hard and not making much money. The kicker is that they don't really realize it." <p>

 

Although it seems odd that sellers would be unaware of losing money, Kennedy notes that it happens frequently, because of the way the system is set up. Sellers might turn over a healthy amount of inventory, get it shipped quickly, and have the money in their accounts promptly, but the level of detailed bookkeeping necessary can give sellers a skewed view of their operations. They might look like they're headed toward riches on paper, but in reality, it could be the road to the poorhouse instead.

<p>

"Some work like dogs, and they figure that because they're working so hard, they're doing really well," Kennedy says. "But the fee structures are complex with credit card services and auction management, and it could be that they're losing just a little bit of money on every deal. It happens far more often than most people think. EBay buyers wonder how people can sell things for so cheap, and the answer is: They can't."

</blockquote>

 

I think this has been an interesting discussion. eBay is sort of a like a giant elephant and we're the two blind men who are feeling different parts of the animal and think it looks totally different. But I do understand your points.