Selecting Your Reserve
Setting a reserve price — the lowest price at which you will let an item go — is a very controversial topic among online auction sellers. Some argue that bidders tend to shy away from auctions with reserve prices. Others counter that reserve prices ensure you will not sell your item too cheaply. Indeed, if you have purchased an item at a garage sale for $10 and need to resell it for at least $15 to realize a profit, setting a reserve price of $15 can ensure that you won't end up having it won by a low bidder.
Opponents of reserve prices argue that you could simply set the opening bid to $15 and not use a reserve price. Those who set reserves counter that more bidders are drawn to auctions when the opening price starts low, usually $1. If you can set a reserve price that protects your merchandise from being sold at a loss, you can start the bidding at a buck and not worry.
Sellers can use eBay's Buy It Now and similar features on other sites to let an impatient bidder pay a posted price for an item and end an auction immediately. However, setting a buy-it price will limit how high bidding can go. A bidder will have no reason to offer more than the Buy It Now price.
Using a reserve price can make good sense if you really don't want to sell a particular item below a certain price. Auction purists will argue that bidders should determine the auction outcome, not reserve prices. But the auction purists also won't be the ones who take the hit if your $10 item draws a $2 winning bid.
