Re: whats the point of a reserve price???

Posted by Hal on April 26, 2003 at 06:18:34 from (24.188.49.98):

In Reply to: whats the point of a reserve price??? posted by woodtick on April 25, 2003 at 18:18:09:

Reserve can also mean that the seller "reserves" the right to make one (and only one) last bid. I think this can be OK since they are not bidding you up except for that one time. Also, by waiting till the end the seller has an idea of how things are going and may adjust his reserve bid downward from what he initially had in mind to get the item sold. I would think that reserves should be found mainly on very expensive or like-new items, such as real estate, a tractor or combine with only a few hundred hours on it, etc.
Of course, reserves like anything else can be abused. If the acutioneer doesn't charge a reasonable fee or commission on unsold or bought-back items it can change the sale into an "appraisal" auction where people just drag things down to see what they might fetch; and with on-line auctions it is even easier since you don't have to get the physical item down to the sale location. I have attended consignment auctions where the commission to the seller is say 10%, but if he/she bids back on it and buys it back themself, then they only charge 5%, and this is all stated upfront. I think the auctioneers do this to get as much stuff consigned as possible and they make a fee either way, but on the other hand there are some who probably feel the seller should never be allowed to bid on his own items.

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