Have you ever been to a real auction? It gets kinda competitive… People get caught up in the moment… They start bidding and want to win… People on ebay can work the same way… Especially when they’re bidding on cars or motorcycles… it gets emotional… 🙂
So the question is, how do you get them emotionally involved, particularly on high price items like cars, motorcycles, boats, airplanes, etc., etc., etc? You get them involved with a low starting bid and a high reserve. The reserve price is the minimum price you’re willing to sell an item for. So if your reserve is set at $100 and the highest bid is $99, no one has won the auction and you don’t have to sell the item.
So here are the 5 basic rules to get the highest price for your item:
- Only use a reserve auction.
- Don’t tell anyone your reserve price and in your ad say “I will not disclose the reserve price”.
- Set the starting bid low. $200, $500, $1000 – it doesn’t really matter the idea is to get as many people as possible to check it out and consider bidding.
- Set the reserve $500-$1000 higher than you’re willing to accept
- Lower the reserve 1-2 times within 48 hours of auction close (Ebay will send all the bidders an email announcing that the reserve has been lowered)
So let’s look at a few examples of why this works.
No Reserve Low Price You have a motorcycle you want to sell for $4,000. You decide to put it online with a no reserve auction at $3700 figuring that’s a great deal and a few people will bid it up. Someone sees your auction, realizes that’s a great deal and bids $4200. E-bay places a bid for him at $3700. No one else bids and you sell the bike for $3700.
No Reserve High Price Ok, after that fiasco with your motorcycle you figure now I have to sell my car. I want $6500 for it so I’m going to list it for $6500 and the first taker gets it. So a few people look at your auction. They’ve done their homework and realize the car is probably worth a few hundred more then that, but that’s not a great deal. So they decide to email you about it ask some questions and maybe even offer you a few hundred less through the messaging system (which is against Ebay policy). Ultimately the car doesn’t sell or at best you get exactly $6500 for it.
Reserve Low Price Now you have to sell your boat. And hot dang, she’s a looker. There’s no way you want to part with her for a penny lower than you can possibly get. So you decide you want at least $15,000 and after those less than stellar results with the car and motorcycle you decide to start the auction at $200 with a reserve of $16,000. You make sure to indicate in your post that you’re not disclosing the reserve. After the end of the first day your boat is already up to $5,000 with 2 bidders. You would never sell it for that, but none of my other auctions had that much interest so quickly. Within 48 hours of closing the auction us up to $12,500 with 6 bidders. You lower the reserve to $15,900. All 6 bidders receive an email. They really want the boat and they know they’re getting close to that reserve price so within 24 hours the price is up to $14,600. You lower your reserve again to $15,800. All the bidders are emailed once more. The auction ends with a total of 8 bidders and the high bid at $15,325. But no one won the auction. Not too worry. Ebay wants to make their commission anyway they can so they give you the option for a Second Chance offer. You can now complete the transaction with the high bidder at $15,325. A price that’s higher than you were willing to take and the absolute highest the market was willing to pay.
Just to further clarify the point, if the high bidder on your boat put in a bid of $15,325 when the auction price was still $14,600 1 of 3 things could have happened:
- Without a reserve his bid would have been $14,600 and if no one else bid him up that would have been the selling price.
- With a reserve set exactly at the lowest you’re willing to take, the $15,325 bid would have bid $15,000 and if no one else bids him up that would have been the sale price.
- Since you were smart and put in a reserve a bit higher than you were willing to let the boat go for, his $15,325 bid registered at $15,325 since it was still below the reserve. Now you KNOW you got the highest price he was willing to pay.
The key is getting the bidders emotionally involved and making sure you get the absolute most you can for your item.
To your succes, Bryan