What is an Auction Reserve?

When participating in an auction, you might come across a term called “Reserve.” But what does it mean, and how does it affect both sellers and bidders?

What is an Auction Reserve Price?

A reserve price is the minimum amount that a seller is willing to accept for an item in an auction. This price is set before the bidding begins and is usually kept confidential from bidders. If bidding does not reach the reserve price, the seller is not obligated to sell the item. Reserve prices are commonly used in auctions—both traditional and online—to ensure that an item does not sell for less than its fair market value or a price the seller deems acceptable.

When an auction displays “reserve not met,” it means that the current highest bid is still below the seller’s reserve price. As long as the reserve price has not been reached, the item remains unsold, and even the highest bidder at that point will not win the item unless they increase their bid above the reserve. This message serves as a signal to bidders that they need to place a higher bid if they want a chance to win the auction.

If the bidding eventually surpasses the reserve price, the auction will typically update to indicate that the reserve has been met, meaning the highest bidder at the close of the auction will win the item. If the auction ends without meeting the reserve, the seller may choose to relist the item, lower the reserve price, or negotiate a sale with the highest bidder.

How Does It Work on Our Site?

1. Setting the Bar: When a seller lists an item, they can set a reserve price. This is the hidden minimum amount they’re willing to accept for the item.
2. Bidding Process: As bidders place their bids, they’re unaware of the reserve price. The excitement of the auction continues as usual.
3. End of Auction Outcomes:
   • Reserve Met: If the highest bid equals or exceeds the reserve price as the auction ends, the highest bidder is declared the winner.
   • Reserve Not Met: If bidding fails to reach the reserve price, the auction concludes without a winner. The item remains unsold.

What Does “Reserve Not Met” Mean?

If a bidder does not meet the reserve price, they will see the message “Reserve not met” in red near the bid box on your item page. Their bid will register (see the “You are the highest bidder” message in the example below), and other bidders can outbid them, but if no bidder reaches the reserve price no one will win it.

When Should You Set a Reserve?

While reserves can be a useful tool, they’re not suitable for every item. Here’s a guideline:

• High-Value Items with Low Starting Bids: If you plan to entice bidders with a low starting bid on a precious item, like a piece of fine jewelry or a travel package, setting a reserve ensures you don’t end up selling it for less than it’s worth.

Remember, an auction reserve price is a way to balance attracting bidders with a low starting bid while safeguarding the intrinsic value of an item. Use it wisely to ensure a successful auction experience!