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  1. #1
    surly old man jgedwa's Avatar
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    Ebay and reserve prices

    I noticed just today that when a bid comes in below the reserve the amount of that bid is not shown publicly. The highest bid remains at the starting bid. Is this a new policy?

    What is the advantage to the seller to do this? Frankly, it just discourages me (a buyer) from investing any attention in the auction, because I have no idea at all where to start bidding. Why have a "starting bid" that is not a starting bid at all? I never really understood the motivation for old system, but at least then I had some frame of reference since I could bid a bit higher than the last person to see if I could get over the reserve. Now, it is just a shot in the dark. I guess if I really have to have the item, I will do so. But all those times where money is an object, I just move on.

    Am I missing something?

    jim

  2. #2
    Lanky Lass East Hill's Avatar
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    I know in the coin world this is done quite often, and I still don't understand why either.

    If you have a selling point beneath which you will not go, why not just be upfront about how much you want, and put it up as a starting bid? Like you, I have no interest in being teased to slowly creep up the bidding scale. I would suppose it's the pyschology of the thing, to get people interested in how much the seller wants for the item. But you'll never get me to bid on such a thing.

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    I've never quite understood the point of the reserve system, but now I'm thinking of selling one of my bikes on eBay and don't want to let it go unless bidding meets a certain amount (i.e., a reserve price). I suppose the seller will see the highest bids and get an idea of the market for what's being sold. So advantage goes to seller, not buyer in this case.

    Neal

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    I send them an email asking what the reserve is, if they will not divulge the information I move on to the next item.......

  5. #5
    Novist senior member tolfan's Avatar
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    I have sold a couple items on ebay. I use a starting price , reserve price , buy it now price. I set the reserve higher than the start to give the buy it now people a chance. I explain this in the add a state the reserve price. I just had 1 item sell with only 1 bit starting was 40 reserve was 75 and it went for the 75 so I guess ebay will put your bid up to the reserve if your max bid is at or over that price.
    There are some things a man needs to believe in wether they're true or not;

  6. #6
    It's MY mountain DiabloScott's Avatar
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    Quote Originally Posted by tolfan
    I have sold a couple items on ebay. I use a starting price , reserve price , buy it now price. I set the reserve higher than the start to give the buy it now people a chance. I explain this in the add a state the reserve price. I just had 1 item sell with only 1 bit starting was 40 reserve was 75 and it went for the 75 so I guess ebay will put your bid up to the reserve if your max bid is at or over that price.
    That's straight forward and fair.

    I think some people set the starting price low to catch more hits on a search even though their reserve may be way higher. I also think some sellers put way too much thought into the psychology of buyers. I appreciate honest sellers and ads without BS.

    And I seldom sell with BUY IT NOW. When people ask, I just say "the auction will proceed as an auction so bid high!" No reserve, starting price is my minimum, auction's over in 7 days.
    http://diabloscott.blogspot.com/

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    Quote Originally Posted by DiabloScott
    And I seldom sell with BUY IT NOW. When people ask, I just say "the auction will proceed as an auction so bid high!" No reserve, starting price is my minimum, auction's over in 7 days.
    I sold a bike recently that had a BIN of $350, which went away after the first bid (I think that's how it works). Final selling price? $380 from a last second snipe. I suppose the sniping strategy isn't always sound.

    Neal

  8. #8
    Senior Member cyclotoine's Avatar
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    to the OP. Ebay has always worked this way. If the reserve is 70 and the start is $40 and you bid $60, ebay will bid $40 for you and then up to $60 if someone else bids. Why? because the seller may choose to sell to the highest bidder if the item does not sell and that would be you for $40 not $60 (as long as no one else bids). What is the point? I am not sure. I find reserves annoying but this is my observation: Two similar items are listed, one starting at $0.99 and the other at $50... the one that started at $0.99 will sell for more. I suppose because more people are watching and bidding along the way and more people bit in the final moments as they try to win. Meanwhile the same item just sold for $52 and it had 2 watchers iinstead of 11... I have yet to get into the selling game on ebay but wil lbe shortly as I have aquired several items that I think could do best on ebay (Zeus freewheel, simplex skewers etc...) i am having a hard time trying to decide how to list them, i think the insertion fee varies depending on the starting price so that could be a factor as well.
    1 Super Record bike, 1 Nuovo Record bike, 1 Pista, 1 Road, 1 Cyclocross/Allrounder, 1 MTB, 1 Touring, 1 Fixed gear

  9. #9
    Senior Member skinny's Avatar
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    Reserves are there to protect the seller. They also allow the seller to set a low starting bid, getting the bidding started, and "priming the pump", so to speak. Once a bidder bids, he/she develops a sense of attachment, increasing the possibility they will continue to bid up. High starting bids deter bidding because they lessen the possibility the bidder may get a great deal. I have seen auctions where the seller set to high a starting bid, got no bids, the cut his starting bid in half, added a reserve, and got more than the reserve in the second auction. It's the psychology of the auction. An auction is all about the seller getting the buyer attached to the item or the winning. But you have to get them bidding first.

  10. #10
    Fred
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    Quote Originally Posted by nlerner
    I've never quite understood the point of the reserve system, but now I'm thinking of selling one of my bikes on eBay and don't want to let it go unless bidding meets a certain amount (i.e., a reserve price). I suppose the seller will see the highest bids and get an idea of the market for what's being sold. So advantage goes to seller, not buyer in this case.

    Neal
    1. eBay charges different fees depending on what the starting bid is, and whether you have a Reserve price, or not.

    2. It is quite common for folks to lower their Reserve price if they really want to sell it and get the feeling the Reserve won't be reached.

  11. #11
    surly old man jgedwa's Avatar
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    So, am I just crazy? I could swear that as recently as a month or so ago, when someone bid below reserve, the amount of that bid could be seen by every one.

    jim

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    Quote Originally Posted by jgedwa
    So, am I just crazy? I could swear that as recently as a month or so ago, when someone bid below reserve, the amount of that bid could be seen by every one.

    jim
    No, you're not crazy. It still works that way. Here is a non-bike example:

    http://cgi.ebay.com/Metabo-10-Table-...mZ220087523909

    The starting bid was $2, the high proxy bid is $85 (as of this post) and is displayed as such, and the reserve has not been met. All the bike auctions I checked in this situation displayed the same way, but I didn't want to irritate anyone here by linking them here. So far as I know, what the OP describes can happen only if all bids are from the same opening bidder, increasing the amount authorized for proxy bidding. But that bidder knows what was bid, and anyone clicking on the number of bids can see right away if that has happened.

    I think the reserve on ebay just serves the purpose described above - keeping the "buy it now" option available after an opening bid is placed. If the seller does not set a reserve, the "buy it now" option disappears with the first bid. At least, I haven't found any other way to do a listing that accomplishes that.
    Last edited by GCRyder; 03-05-07 at 04:26 PM.

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    I've spoken with at least two sellers who put a fairly high reserve price on an item, because, they aren't really sure e-bay is where they want to sell the item. As noted in another post, the seller can always lower the reserve price. Here's a recent example of which I'm aware: The seller had a bike on e-bay with a starting price $600 lower than the reserve price. This seller also had the bike sitting in a local shop. If someone came into the shop and offered him a great deal more than his starting price on e-bay, he wanted to be able to sell it that way. If however, there were no takers at the shop, he was willing to lower his reserve price to be more in line with his starting price.
    Oh I used to be disgusted and now I try to be amused. But since their wings have got rusted, you know, the angels wanna wear my red shoes. But when they told me 'bout their side of the bargain, that's when I knew that I could not refuse. And I won't get any older, now the angels wanna wear my red shoes.

  14. #14
    Seņor Member USAZorro's Avatar
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    Jim,

    Time to check out Merv-Bay again.
    In search of what to search for.

  15. #15
    The Recycled Cycler markwebb's Avatar
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    Studies have shown that reserve price auctions on eBay discourage more bidders than they attract...similar items will sell on a non-reserve than on a reserve with no difference in pricing. The pyschology and dynamics of bidding and reaction to reserve auctions is demonstrated in this thread.

    You're noty missing anything - reserve auctions on eBay don't do as well as non-reserve or BIN.

  16. #16
    surly old man jgedwa's Avatar
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    USAZorro, Shhhhhhh! Last thing I need is to have everyone beating a path to the greater Stoughstown metroplex area to horn in on my secret source.

    Almost stopped there today. Did you get a chance to see the junk pile behind the shop in the horse pasture? Mostly garbage, of course. But I have pulled a Centurian Ironman out of the pile ($10!!!) and have my eye on a Panasonic that I might grab just for the crankset. If the pile is too junky for you, you can always needle him into letting you loose in his pole barn/warehouse. He has boxes of stuff in 30 foot stacks.

    Mmmmm. Maybe I will drop by tomorrow.

    jim

  17. #17
    hunter, gatherer coelcanth's Avatar
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    regarding the initial post:
    maybe you were confused because the item in question only had one bid on it.?.

    if no one else was bidding against the first bidder, his bid would remain at the starting price, still below the reserve.. if he hit the reserve with his first bid, the bid shown would change to meet the reserve price, even if there was only one bidder.. (you are almost bidding against the seller in this case)
    if there were two or more bidders, the bid shown would reflect the highest bidder's current proxy bid whether or not the reserve was met

  18. #18
    surly old man jgedwa's Avatar
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    Yeah, I was confused. I mistakenly thought I remembered that if your bid was below reserve it automatically would "proxy up" to the max.

    On the other hand, it would make a LOT of sense if this is how it did work.

    jim

  19. #19
    Nut infinityeye's Avatar
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    Quote Originally Posted by tolfan
    I have sold a couple items on ebay. I use a starting price , reserve price , buy it now price. I set the reserve higher than the start to give the buy it now people a chance. I explain this in the add a state the reserve price. I just had 1 item sell with only 1 bit starting was 40 reserve was 75 and it went for the 75 so I guess ebay will put your bid up to the reserve if your max bid is at or over that price.
    tolfan can I have some of whatever pills you took halfway through this post?

  20. #20
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    Quote Originally Posted by BSLeVan
    I've spoken with at least two sellers who ... aren't really sure e-bay is where they want to sell the item...
    A bike I was watching just ended early, with bidders having already bid. A one-sided system, in my opinion. If I bid, the seller will swear on a stack of bibles that my bid is not retractable (unless I claim "error" or some such nonsense), and that it's a binding contract if I'm the high bidder. But if a seller decides to end early, suddenly my "binding" bid vanishes.

    Whatever. Just one more example of how S**** eBay is.

    Or put another way, maybe I'm not really sure that's the bike I want to buy-- I might want to reserve the right to retract my bid.

    Whatever.

  21. #21
    Since 1938... JunkYardBike's Avatar
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    Slightly OT, but here's a strategy to win the items you want without other pesky bidders ruining it for you. I found this username as I browsed a seller's feedback: donteventrytooutbidmeonclassicmtnbikeitems!

    Too bad for this guy that eBay hides bidder names now!

  22. #22
    Fred
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    Quote Originally Posted by markwebb
    Studies have shown that reserve price auctions on eBay discourage more bidders than they attract...similar items will sell on a non-reserve than on a reserve with no difference in pricing. The pyschology and dynamics of bidding and reaction to reserve auctions is demonstrated in this thread.

    You're noty missing anything - reserve auctions on eBay don't do as well as non-reserve or BIN.
    If there's stuff I know I want to get rid of, I start with a 1 cent starting bid. Then I throw in a discount for shipping if the winning bid is placed more than 24 hours than auction end - to bum out the last-minute types.

  23. #23
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    Quote Originally Posted by Garandman
    If there's stuff I know I want to get rid of, I start with a 1 cent starting bid. Then I throw in a discount for shipping if the winning bid is placed more than 24 hours than auction end - to bum out the last-minute types.
    As Dr. Phil would say: "How is that working out for you?".
    Seems like it would discourage one group of bidders... the ones that place the highest bids at the end. Why "bum out" bidders?

    As a sniper I would bid as usual - the highest amount I want to pay when factoring in shipping at the end of the auction. If your stated shipping price is reasonable then nothing would change. But if your stated shipping is inflated in anticipation of lowering it for the pre-24hrs, then my bid will be lower as I know I won't receive the discount. And chances are if the early bids are starting to get close to where I planned to bid anyway, I won't even bother. Yeah, I'm bummed already. Next!

  24. #24
    Senior Member Homebrew01's Avatar
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    Quote Originally Posted by markwebb
    Studies have shown that reserve price auctions on eBay discourage more bidders than they attract...similar items will sell on a non-reserve than on a reserve with no difference in pricing. The pyschology and dynamics of bidding and reaction to reserve auctions is demonstrated in this thread.

    You're noty missing anything - reserve auctions on eBay don't do as well as non-reserve or BIN.
    Are there controlled tests to show this ?

    I have a bike to sell, and I'm afraid to do "no reserve". What if it sells for $200, when it's worth $800+ ?? Maybe I should do a starting bid of $500 and hope for the best with no reserve ?

    If I do a reserve, I will state the reserve amount in the listing so everyone knows what it is. Some sellers like to watch bidders play "Guess the Reserve", which turns me off as a bidder.

  25. #25
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    Quote Originally Posted by Homebrew01
    Are there controlled tests to show this ?

    I have a bike to sell, and I'm afraid to do "no reserve". What if it sells for $200, when it's worth $800+ ?? Maybe I should do a starting bid of $500 and hope for the best with no reserve ?

    If I do a reserve, I will state the reserve amount in the listing so everyone knows what it is. Some sellers like to watch bidders play "Guess the Reserve", which turns me off as a bidder.
    I did some searching around to see what research shows about reserve prices and buying behavior and came across an economics study on the selling of rare coins that pretty much supported what markwebb wrote. Seems that a "secret" reserve depressed bidding as did a high starting price. It also found that something like 95% of bids were placed in the last five minutes. If that's true, I'd imagine those snipers were setting a single price they'd pay and were bidding only once (and thus not affecting the bidding of other snipers). The lack of a known reserve would be off-putting as bidders wouldn't want to bid on an auction they have no shot of winning. What the paper didn't discuss was auctions in which the reserve is known, but that's essentially the same as a high starting price. I can dig up the citation if anyone wants it.

    Neal

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