Let’s face it, we all love getting a deal. This is where eBay took off. Unlike a physical auction or swap-meet, eBay allows you to bid on items for sale and hopefully grab yourself an item for much lower than their usual price.
But of course, some sellers will not sell items for outrageously undervalued cost and this is where reserve prices kick in.
When it comes to using eBay, it can be a very complicated tool, and sometimes you need the complex terminology to be made much more manageable and understandable.
This guide will try to weed out the jargon and give you a clear explanation of what a reserve price is and how it all works.
So, get comfortable and get your checkbook! Let’s understand eBay!
What Does Reserve Price Even Mean?
Have you ever been to an auction and the auctioneer has said “we’ll start the bidding at $4,000”. The reason for this is that the auction house will not allow the sale of the item to be under this value.
When it comes to reserve prices on eBay, this is a similar thought process. Let’s say there’s an item that you really, really want – and you noticed its bids are at $100, but the reserve price is $500. You may think, hey – that’s up for grabs!
Well, sort of. The reserve price refers to the minimum price that the seller will let the item go for. If this price is not met, the item will not be sold. This is different from the starting price, which can be as little as a buck (or nothing if they plan to give the item away!).
There is perfect sense to why a seller will set this lowest price. When it comes right down to it, we’re all trying to make money if we’re selling something, and if a seller is aware of how much an item should be sold for – or they know how much they’d be happy to sell an item for, they will set one of these reserve costs.
Reserve price auctions work slightly differently from your standard auction. With normal auction listings, whatever the final bid was – that is how much the item must be sold for. However, with a reserve price listing – the item does not get sold unless this minimum sale price is met.
Buyers might decide to offer under the reserve because they don’t want other bidders to overshoot their bids. It also allows them to keep an eye on the item right up until the final moments of sale.
Should a buyer do this, they will automatically receive a message from eBay saying “reserve price not met” and buyers should be aware that even if their bid is the highest at the end of the auction, they will not own the item.
However, it’s not uncommon for sellers to decide after this to reduce their reserve fee and buyers will receive a message to this effect. This could mean that a new price that suits the buyer has become available, and you may be able to meet this price.
This is known as a second chance offer and the seller will offer a new price to the prospective buyer(s). This allows a prospective buyer to either accept the new price and buy the item, or decline it and move on.
Is There Another Way Around Reserve Auctions?
Reserve auctions work in favor of the seller in many ways, so although you can’t demand they sell their item for a price you’re more comfortable with, there are a few things you can opt for.
Accept The Second Chance Offer
If you are offered a second chance, consider accepting it. Always bear in mind the cost of the item and how much you want it. And of course, never overshoot your budget. As long as the seller is reputable and genuine, you should be fine.
To check this, remember to look at their feedback and do some basic research on them.
Contact The Seller
You should be able to contact the seller, either through eBay or if they have provided a contact email address. Remember, if they have used an auction style process as opposed to a set price – this means they are happy to negotiate their profit margins on the item.
This will generally mean that the seller is private and not a business that has set prices using eBay as a sale avenue.
When you’re trying to negotiate, remember to stay polite. Provide other costs of the item if you’ve found them cheaper in other areas and don’t undercut them too much, or they will cease negotiations entirely. You may even be reported to eBay!
What Not To Do
If the closing price is not good enough for the seller, there are a few things you should certainly avoid!
Complete The Sale Outside Of eBay
Never complete a transaction outside the protection of eBay and PayPal. You will have no evidence of the transaction, and it will be difficult to solve a problem if you’ve been conned or sold a dud item.
It’s also against eBay’s terms and conditions. So if a seller is trying to get you to make a new deal outside of eBay, report them as soon as possible. They’re likely trying to scam you.
Refuse To Pay
If you’ve made a deal on the second chance offer, do not refuse to pay because it was not the price you asked for. This is also against eBay’s terms, and you can be banned from the service for good!
The Bottom Line
Reserve Prices are at its most basic just the minimum cost that a seller is happy to accept. Iif you bid less than this and win the auction, you still do not win the item and the sale will not be made.
If you choose to go further, remember to do it safely and within the rules of eBay.