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Why you should not use a reserve on your ebay auction

Posted By Scott Klarr on Feb 24, 2008 at 7:23 pm

eBay along with many other auction services have a so-called feature that allows you to place a reserve on your auction, for a nominal fee, of course. If you don't know what an auction reserve is, it allows you to list an auction starting at a low price and basically if the auction does not get bid to at a certain set price, then the whole thing is void and nobody wins, wasting everybody's time involved. I absolutely despise this concept. Let me explain why.

Most people will think that by adding a reserve with a super low starting price, they are protecting themselves against letting their merchandise go for too cheap while getting more people interested because of the low price. While this is true, its an absolutely misleading "benefit," that really has no benefit at all.

By starting the auction at a very low price with a reserve, as compared to simply starting the auction at your reserve amount, you will indeed get more attention - but from the wrong people. Your auction will get a lot of activity from people who don't have the budget, willingness, or ability to pay the amount you really want - giving you a sense false of success.

Sellers need to focus on getting the attention of the people who are actually serious making a purchase. By using a reserve you can easily scare them off and replace them with a bunch of "tire kickers" who are not going to even think about paying more than your starting price, little alone a blind minimum.

Serious consumers, the ones you want to target, do not like playing games when it comes to making a conscientious decision about a smart purchase. Many people, including myself, will not even think about bidding on an auction if there is a reserve, simply because I am there to make a purchase - not to play "guess how much I actually want." Bidding against other people is bad enough but when you throw in the element of a hidden minimum that you may not even reach - its just a ridiculous waste of time.

I dont know about you, but I would rather only have a couple serious buyers that don't bid until the last day, than to have 7 days of tire kickers bidding it up pennies at a time, possibly never even reaching the reserve, while turning away the serious buyers who don't like to play games.

So while you may see more [useless] activity on your auction with a reserve, in the end the chances are that your auction is going to end for less than if you simply started it out with an honest price and no reserve.

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