Completely don’t understand Reserve Price?

[jukel166]

I’ve never had an item in an auction and was going to try it, but don’t fully comprehend all the aspects.  I’ve read a couple articles about it, but still have a couple questions:

-Is the ‘opening bid’ price meaningless?  People can bid whatever, correct?

-If I don’t pay eBay a fee for a ‘reserve price,’ potentially someone can bid $1, and if it’s the only bid, I’m obligated to accept it?  

-What are the actual benefits of auctioning an item instead of just listing it?  Does it create a sense of urgency?  Do people expect to get a higher price?   

Thank for any help.

[nobody*s_perfect]

You can set the opening bid at any amount you like.

eBay will not accept any bids which are lower than the opening bid; it's the minimum that the item could sell for. 

A Reserve is a secret higher minimum selling price.  eBay will accept bids which are lower than the Reserve (but higher than the opening bid) but those bids cannot win the auction.  If any body places a bid which is equal to or higher than the Reserve, then the high bid showing will jump up to the Reserve amount, and that member will win the auction , if nobody bids against them.

Most Sellers do not use reserves; they just start the bidding at the lowest price that they'd be willing to sell for.  Using a Reserve incurs a non-refundable fee, and it also drives away some potential bidders who just hate reserves.

Setting up a listing in auction format, rather than fixed price format, makes sense IF there is a lot of demand for the item, which might drive up the price, or if the seller isn't sure what  a reasonable selling price would be for instance for an unusual collectibles item for which there are few comparison sales. 

[eburtonlab · Accepted solution]

Is the ‘opening bid’ price meaningless? People can bid whatever, correct?

The opening bid is the minimum amount that can be bid. If there is only one bidder in a no-reserve auction, that bidder will win and pay the opening bid amount. It takes more than one bidder (or a reserve amount) to raise the bid above the opening bid amount.

Sellers should choose opening bid amounts appropriately, and not offer items for less than the minimum amount the seller is willing to sell for, unless the seller is sure that there is enough interested bidders to ensure that the price will be driven up high enough.

Offers are different than bids; if an auction has the option for an offer, users can offer above or below the minimum bid amount, but the seller is not obligated to accept any offer. In most cases, as soon as an auction receives a valid bid, any buy-it-now option or "make an offer" option goes away, any outstanding offers expire, and the high bidder at the end of the auction is the winner.

If I don’t pay eBay a fee for a ‘reserve price,’ potentially someone can bid $1, and if it’s the only bid, I’m obligated to accept it?

If you start a no-reserve auction at $1 and there is only one bidder, that bidder will win at $1, and you will be obligated to sell at that price or face consequences for your eBay account.

What are the actual benefits of auctioning an item instead of just listing it? Does it create a sense of urgency? Do people expect to get a higher price?

If you know exactly how much an item is worth or how much you want for it, you may be better off listing it for a fixed price with immediate payment required, particularly if there are many such items available.

Auctions may be worthwhile for rarer items where there is not an established market price, or where it seems likely that several interested users will bid competitively to drive up the price.

Auctioning an item that is widely available for a fixed price is unlikely to wind up ending exceeding that fixed price, and may often fall well short of it.

[inhawaii]

$1 opening bid

$100 reserve price

People can bid anything they want, they just can't WIN the item unless the reserve is met.

$2 bid will not win.

$99 bid will not win.

The highest bid over $100 will win.

[pickapaper]

Not about auctions but...

It appears you are a new seller.  You have some expensive jewelry items listed which could be targeted by scam artists.    Those scammers are out there just preying on new sellers who do not understand the ins and outs completely.  For example, they could buy your diamond bracelet, claim "not as described" in order to return it, and send you back a box of rocks.  eBay will almost always side with the buyer in these cases because it is a "he said-she said" situation; eBay doesn't know what you sent and they don't know what the buyer returns.  You would have to refund the buyer's money because they have tracking proof they sent you a package so you would be out the money and your item.   There are also many other scams which you can read about on this board. 

Do not list anything you cannot afford to lose. 

[bonjourami]

Wow, Op..how did you get away with listing and selling this for $265...fake papers and all? Im amazed! Fakes are not allowed on Ebay, somehow you werent reported.

Genuine Counterfeit S. T. Dupont 007 Lighter

[jukel166]

Hi.  I’m relatively new to eBay, and wasn’t familiar with the rule about not selling fakes at the time.  I actually I listed 2 of these lighters.  I thought that disclosing it was fake was enough, but now I am aware, and I am a big rule follower, so I won’t do it again.  I guess that first one slipped through somehow and the second one was taken down.  

[jukel166]

Thanks so much for looking out for me.  I am a new seller, and very much still learning the ropes.   

I don’t want to take up a lot of your time, but how would I protect myself from a scam like you described?  Better description?   Documenting the bracelet being put in the box?  

Thanks for any insight you can share.

[janet9988]

It is illegal,against the law, to sell counterfeit "fake" items anywhere.

[jukel166]

Thank you.  I appreciate your response.  I totally get it now!

[jukel166]

I’m learning as I go, and I made a mistake.  But I did learn from it.    Won’t do it again.  And actually, I’m glad you mentioned that it is illegal, I actually still didn’t realize that, but I  just read up on it.   Yikes!  Thank you for adding to my education.  I was unaware it was such a serious issue.   I thought full disclosure was enough, but now I know better.  
I appreciate your input. 

[jukel166]

Thanks.  I really appreciate your info. 

[pickapaper]

There really isn't any way you can protect yourself in a case where a buyer returns "trash" instead of the actual item you sent.  A better description won't have any bearing.   For example, that diamond bracelet  could be described perfectly and have excellent pictures but if a buyer says they received a keychain instead of that bracelet, eBay would side with them.  The buyer could return a keychain to you and you would have to refund the bracelet money; so you would be out the bracelet and the money.   Documenting such as photos or videos are meaningless to eBay; they won't pay any attention to them.  As I said, eBay doesn't know what was sent from either party so they will almost always side with the buyer.   

The best thing you can do is not sell anything expensive, at least until you get some experience under your belt.       

Just to clarify, there are millions of good, honest buyers and sellers on eBay, but there are also a few who are out to get something for nothing.   And they get more savvy with scams every day.