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What`s the deal with reserve ?

mulletguter53mulletguter53 Member Posts: 83 ✭✭
edited July 2002 in General Discussion
Been checking out auctions for the last couple of months . Maybe I am missing something . Why would someone list an item at $00.01 with reserve and a buy now at $2,500.00 ? Why would someone bid what they know will not even be close to meting the reserve ? Are they just fing around , or is there something I don`t get ? Seems like there is alot of biding and not much buying . I don`t really understand the reason for a secert price. Thanks in advance
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Comments

  • Matt45Matt45 Member Posts: 3,185
    edited November -1
    As far as the Buy Now! price, that's usually what I list as my "wildest dreams" price, you know, the hopes that someone out there is really that desperate.

    I usually don't fool with hidden reserve prices, I don't think it's fair to consumers, you should be able to know about how much I am asking for an item.

    Sellers that list starting out prices of $0.01 are usually looking to see what the market is for an item, hence, the spread between the Buy Now! and the starting bid.


    Reserving my Right to Arm Bears!!!!
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  • leeblackmanleeblackman Member Posts: 5,303 ✭✭
    edited November -1
    I usually do alot of shopping around. And when I see something I want that has a reserve on it, I email the seller and ask him for a no BS, I send you a check and FFL and you send me the gun price.

    If I'm wrong please correct me, I won't be offended.

    The sound of a 12 gauge pump clears a house fatser than Rosie O eats a Big Mac !
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  • airborneairborne Member Posts: 1,728 ✭✭✭✭✭
    edited November -1
    I have gotten where I won't even mess with a Reserve price unless it has been met. I would like to see more sellers start off at the minimum they expect, and let the bidding go from there instead of messing around with this Reserve price stuff.

    B - BreatheR - RelaxA - AimS - SightS - Squeeze
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  • leeblackmanleeblackman Member Posts: 5,303 ✭✭
    edited November -1
    Reserves are for live auctions, not electronic auctions.

    If I'm wrong please correct me, I won't be offended.

    The sound of a 12 gauge pump clears a house fatser than Rosie O eats a Big Mac !
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  • 25-0625-06 Member Posts: 382 ✭✭
    edited November -1
    I have had a few people tell me the reason they use a reserve is to find out what their item is worth. They put a high reserve on the item with no intention of selling it. I think the auction sites should do away with reserve auctions. They are a waste of time, in my opinion.
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  • IconoclastIconoclast Member Posts: 10,515 ✭✭✭
    edited November -1
    There are a few sellers who have reserves of just a few % higher than the opening bid. Why? I don't know. Would think they'd just list it at their desired price & let it go. Most reservists seem to have their heads wedged & once I have determined they suffer from this disability, I refrain from even looking at their items. And yes, some of these people are using auctions as free market research. I do as lee does and once in a great while have a nice surprise. Most of the time the seller either does not respond or suffers from near-terminal greed. As a marketing tool, my impression is that reserves drastically decrease interest in an item.
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  • offerorofferor Member Posts: 8,625 ✭✭
    edited November -1
    A lot of sellers misuse the reserve. Reserve auctions are much older than the Internet. The reserve price is supposed to be simply so that a seller can get the bidding fun started and not risk taking a bath or "losing their shirt" on an item. It doesn't even have to be high enough for the seller recoup ALL of his investment in the item. After all, an auction is designed with an element of risk for both parties. People have compared online auctions to garage sales and yard sales, except that genuine antiques and rarities do bring good prices online -- but that doesn't mean every auction is a Christie's quality transaction. For the most part, auctioning is supposed to be about taking a risk on an item and hopefully having bidders raise the price up to what the highest bidder wants to pay. Win prices are always set by buyers. (That's why so many auctions still close empty on GB -- not all sellers have "got" it yet -- too much direct marketing going on.)

    The wrong use of a reserve is to make it any higher than absolutely necessary to get most your investment out of your item. If you're using a reserve to set a "profit" price or a "like to have" price, or God forbid a "retail" price, and BuyItNow for your dream-that-a-rich-guy-is-lurking price, your head is thoroughly wedged.

    The BuyItNow price has two purposes -- a reasonable price for a quick sale, or a high-side-of-the-current-reasonable-market-price of the item so that you can get a 'healthy' market price. Anything more is dreaming, as far as I'm concerned.

    The reserve, used properly, helps get people started bidding and should be met when the buyer's own bare investment is covered, or almost -- because he may have used it a while and depreciation is a factor if it's not brand new. Trouble is, retailers think like retailers. Reserves with a "nice profit margin" built in are for sellers who haven't yet figured out that online auctions are a buyer's market, and we have shipping and transfer fees to add. When I can buy cheaper in town, or at the gun show, you're wasting your time.

    - Life NRA Member
    "If cowardly & dishonorable men shoot unarmed men with army guns, the evil must be prevented by the penitentiary...and not by general deprivation of constitutional privilege." - Arkansas Supreme Court, 1878
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  • boeboeboeboe Member Posts: 3,331
    edited November -1
    Reasons to use a reserve auction:

    1. Setting a low opening (one cent) and a high reserve will cause a lot of people to bid on the item. If it gets close to the reserve and someone new sees several bids, he may think it's a very popular item and bid on it.

    2. Set the reserve high, so it wouldn't be won. Contact the highest bidder after the auction and tell them you've decided to sell. Result, no commission fees.

    To err is human, to moo is bovine.
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  • offerorofferor Member Posts: 8,625 ✭✭
    edited November -1
    The only problem with #2 above is it's illegal on the massive eBay site and will, if reported, get your operation booted off their auction site. They don't like people who try to avoid commission fees, and a lot of people don't like getting e-mails from people who ask for your money outside of an auction where none of the rules apply. If they don't send the item after they get your money, eBay insurance won't pay off because it wasn't an auction. I believe PayPal also insures some legit transactions.

    I very seldom bid on an auction with an obviously high reserve, so I wouldn't get the benefit of any offers to buy after auction close and the sellers wouldn't get my business anyway. So those sellers are losing potential bidders. Last time I bid on an Alaskan HK USP Match that didn't reach reserve, I didn't get any e-mail either, which is no incentive to try it on the off-chance you'll hear from the seller. Usually, a high reserve just means a seller wants too much for the gun. Besides, if a reserve is met when auction closes, a contract exists between the parties to go through with the sale. If reserve is not met, nobody who bid is further obligated to honor their bids, so the seller is left fishing for buyers.

    - Life NRA Member
    "If cowardly & dishonorable men shoot unarmed men with army guns, the evil must be prevented by the penitentiary...and not by general deprivation of constitutional privilege." - Arkansas Supreme Court, 1878
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  • boeboeboeboe Member Posts: 3,331
    edited November -1
    Not sayin' is the right thing to do, but it's frequently done. The other method of ripping the auction house out of commission is to sell items for a penny, then charge $9.95 (or more) postage and handling for every item, regardless of the quantity won. It happens all the time on e-bay. I haven't seen any examples of it happening on gunbroker, but I would be willing to bet it has been tried.

    To err is human, to moo is bovine.
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  • IconoclastIconoclast Member Posts: 10,515 ✭✭✭
    edited November -1
    If I ever sell anything again on eBarf, I'll remember the 0.01 price / high handling charge routine. I have no problem ripping off those anti-gun PC scumbags. Would not do it here or the other site; would be like urinating in my own beer.
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  • offerorofferor Member Posts: 8,625 ✭✭
    edited November -1
    Boe --
    I wasn't griping at you. I was maybe hoping some lurking GB merchants would read my thoughts and get a clue.

    When sellers aren't willing to take any risk at all they pretty much void the auction process. I'm of the opinion that the auction concept was "hi-jacked" to a large degree by marketers. I'm all for entrepreneurism, but I'd rather have a separate site for collectors and non-pros than to have to wade through 49 auctions for the same item at the same no-risk, no-sale price to find something interesting. If you want to make money at auctions, you have to stick your neck out, and hope to make your profits overall, not self-guaranteed on every item. At least, that's my philosophy. Sometimes I speak pretty direct, but that doesn't mean I begrudge other points of view.

    - Life NRA Member
    "If cowardly & dishonorable men shoot unarmed men with army guns, the evil must be prevented by the penitentiary...and not by general deprivation of constitutional privilege." - Arkansas Supreme Court, 1878
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  • airborneairborne Member Posts: 1,728 ✭✭✭✭✭
    edited November -1
    I would say the consensus of the majority replying to this post is to get rid of the Reserve Bid.

    B - BreatheR - RelaxA - AimS - SightS - Squeeze
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