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Hidden reserve price auctions.

FatstratFatstrat Member Posts: 9,147
edited January 2006 in Ask the Experts
What is the purpose of having a hidden reserve price on an auction? I'm sure there must be a good reason, but I sure can't think of one. If anything it puts me off. Especially if I email the seller and ask, and he refuses to tell me. I'm simply not interested in a fishing expidetion to find the price. If they don't want me to know the asking price, I assume (usually correctly) that it's too high and pass on by. There'll be another gun of the same type soon enough. Your thoughts?

Comments

  • tazz1958tazz1958 Member Posts: 214 ✭✭✭
    edited November -1
    I agree with you 100%, if you want to sell it put your price on it
  • Bert H.Bert H. Member Posts: 11,281 ✭✭✭
    edited November -1
    This is really more of a General Discussion forum topic, but I agree with you... reserve auctions are a colossal waste of my time[xx(]!

    WACA Historian & Life Member

  • turtles11756turtles11756 Member Posts: 1,118 ✭✭✭✭✭
    edited November -1
    reserve auctions make sure gun sells at a fair price .i was high bidder 2 weeks ago on a savage model 21 pump shotgun all original in a no reserve auction bidding stopped at $30.00
  • roysclockgunroysclockgun Member Posts: 310 ✭✭✭
    edited November -1
    The Reserve style auction is a way to get more items put up for bids. Usually the reserve is right at or a little below what the seller really needs to get for the item. Even in brick n'mortar auctions it is sometimes hard to get the bidding started. If the auctioneer shouts out a really low bid, the bidding will begin very hot until approaching what the item is really worth. Another reason for Reserves, is because in brick n'mortar auctions, it has happened in the past, where groups of bidders will get together before the sale and agree not to bid against one another. They work in packs to hold the bid down. The more bidders to join the pack, the lower the realized prices will be. This action perverts the system and cheats the seller. One has to view the system from both sides to understand the nuances of the game. Auctions when run honestly are a true aspect of capitalism, where worth and value is determined by the seller and buyer. I do not like Reserve style auctions as well as I like Absolute Sale auctions, but having been on both sides, I understand why many sellers want reserves on their items.
    The secret for the buyer, regardless of Reserve, is to research the item, determine what you are willing to pay and write that figure down, so that it can be seen by you during the bidding. DO NOT for any reason bid above your pre-determined bid price. When you do this with discipline, you will never have to regret what you paid for any item. Too many bidders are convinced not to lose an item because of a bid of $5 more than they intended to bid. They become caught up in the bidding and end up paying too much for an item. If you pre-set you high bid, you cannot lose, even in a Reserve style auction.
    Lastly, if the bid goes above your pre-set price and the item is still marked as "reserve not met", at that point, email the seller and let him know that you are willing to pay your pre-set figure in cash and that you are a serious buyer. I have bought firearms many times by telling that to the seller, even while the sale is in progress. In some cases, he pulls the firearm down when bidding slows, as the high bid shown is not a genuine bid! In other cases, the seller runs the firearm through a few times, does not get a higher bid than what I am offering and sells me the firearm. Let them know that you are serious by giving them a couple phone numbers and chances are, if their reserve is not met, they will sell to you. "A bird in the hand" and all that!
  • nunnnunn Forums Admins, Member, Moderator Posts: 36,085 ******
    edited November -1
    quote:I agree with you 100%, if you want to sell it put your price on it [xx(]

    If the seller does what you ask, then it isn't an auction. It is a fixed-price sale. We have that option, called "Buy Now," for those who like a fixed price sale. I like auctions.

    My seller name is nunn. Watch for my stuff.
  • roysclockgunroysclockgun Member Posts: 310 ✭✭✭
    edited November -1
    nunn wrote: "If the seller does what you ask, then it isn't an auction. It is a fixed-price sale. We have that option, called "Buy Now," for those who like a fixed price sale. I like auctions."

    In some cases, dealers who understand how auctions work could cut out the non-dealers and auctions could go on. Many dealers carry on both buying and selling via auctions. The sweet part for non-dealers is that they have the right to jump in a pay what the dealer would pay and save a bundle.
    I agree with "nunn" and appreciate auctions and how they work. Most people who have problems with auctions and how auctions work, simply have not taken the time to "learn the ropes!" Internet auctions have created an unlimited target market, making it possible for both buyers and sellers to deal in items with those, who in any other way, could never have been contacted. I have sat in Md. in front of my screen and seen a bidder in Hawaii get my item. Conversely, when I was looking for a certain firearm, I was able to find one at auction in Idaho! In most all cases, both the buyer and seller are made happy by the transaction. It is only those who sit on the sidelines, not knowing how to be a winner in the auction game, who remain unhappy!
  • Spider7115Spider7115 Member Posts: 29,704 ✭✭✭
    edited November -1
    I hate reserve auctions, too, unless the starting bid and "Buy it now" options are within reason. I see absolutely no sense in starting an auction for an engraved Colt Commander at 13 cents when the seller obviously wants thousands of dollars for it. See this auction:

    http://www.gunbroker.com/Auction/ViewItem.asp?item=43143357

    For example, if he wants $5,000 for it, he should start the bidding at that amount with no reserve. However, if he wants a reserve to "test the waters" and see what kind of serious buyers are out there, he should start the bidding between $4,000 and $4,500. Having a starting bid at a ridiculous amount of 13 cents accomplishes nothing but to insult the intelligence of potential legitimate buyers.
  • perry shooterperry shooter Member Posts: 17,105 ✭✭✭
    edited November -1
    Hello the reserve auction is a way for the seller to protect his investment in the item he is trying to sell However I never look at the reserve auctions some of them keep relisting for month after month . I think if you are serious you need to have a real auction but set the starting price for what you will sell the item for even you would like to have more. It seems a waste to me to look at one category and have hundreds of items that reserve is so high they will never sell to see a few items that can be bought.
  • 1911a1-fan1911a1-fan Member Posts: 51,193 ✭✭
    edited November -1
    so if it has a set reserve, and you find out that you paid more than what the reserve was should you get a refund? or do you just feel a bit taken by paying more than what was actually asked?

    here is the problem

    most of us gun guys live by a certain code, a man is good for his word, and plays his cards on the table, {i said most}, and then comes the internet auction, the key word in this is internet, most of us have been to a billy bobs auction of some sort, where you can look a man in the face, most of us have been to a gun shop, and guns show, where you can not only handle the merchandise to see if the guy is nuts for pricing it the way he did, and get a feel of him to see how your transaction is going to go, but now it is done over a computer, all the natural instincts we have relied on are useless, remember the pictures floating around that shows a big fat woman in her underwear talking on a sex hot line?, now we add this in the equation of our already handicapped ability to bargain and walk away with a happy face

    I am assuming you are referring to a "hidden" reserve as him refusing to tell you his reserve price, actually it is a unwritten rule that you DO NOT ASK THIS, so do not get angry when it is refused, now there is a very good reason for a reserve price

    first "why do you want to know it"?,
    Say the reserve is 200.00, you want to know it because you want to get the item for 201.00, even though 200.00 is the minimum price set by the seller, why would anyone refuse the chance to get more for their item

    the internet auction has always been in favor of the seller, they are the ones listing and paying the fees, "not the buyer", the question is not how much the person wants for the item, the question is how much are you willing to pay
  • FatstratFatstrat Member Posts: 9,147
    edited November -1
    You are correct. I have no problem w/an up front reserve price. It HIDDEN reserves that annoy me. In my case, it hurts the sellers chance of getting his price, because I rarely will fool w/it.
    Sorry for posting my question on this forum instead of the "Discussion forum". I have some issues w/things that go on in that forum and elect not to participate on that forum. My interest is in firearms, including buying/selling. So I just stay up here.
  • sharpshooter039sharpshooter039 Member Posts: 5,897 ✭✭✭
    edited November -1
    I will not bid on a reserve auction,,if the seller needs protection then start the bidding at his lowest price,I used to collect S&W M&P revolvers,I know for a fact there are 2 at auction now that were at auction 2 years ago because the hidden reserve has never been reached.
  • nmyersnmyers Member Posts: 16,892 ✭✭✭✭
    edited November -1
    First, I've got to say that Roysclockgun posted the best-written explanation of auction strategies I have ever read. He really nailed it.

    However, "free listings" on Internet gun auction sites has changed things a little. While a great tool to encourage sellers to list their goods, it encourages the "game players". "Game players" are often the gun show dealers who carry the same guns, year after year, to show after show, at prices 25-50% over market, but refuse to lower the price. These "game playing" dealers, with the addition of "game playing" individuals, are now on the Internet. They list guns at ridiculous prices, & rarely, if ever, sell them. THESE are often the people with reserve auctions, or with ridiculous starting prices. They aren't serious about selling their items, so I never bother bidding on them.

    When I list a gun on GB, it usually sells the first time listed. I start the auction at a reasonable price, with no reserve, include detailed photos & description, provide shipping details & cost, & don't "play games".

    I fear that "game players" will kill the online auctions. Many people are discouraged from browsing because they have to wade through page after page of listings by the "game players". I'm one of those who no longer has the patience to browse.

    Neal
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