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Why set a reserve on an eBay auction?

Printed From: Cinderella Stamps Forum
Category: Selling, buying or trading cinderella stamps
Forum Description: Tell us about your Auction experiences - buying and selling - good, bad and ugly!
Printed Date: 19 June 2019 at 06:19
Software Version: Web Wiz Forums 10.17 -

Topic: Why set a reserve on an eBay auction?
Posted By: Colin
Subject: Why set a reserve on an eBay auction?
Date Posted: 05 May 2016 at 01:55
I have noticed on another stamps forum that the reserve set on one of my auctions has become the subject of some discussion, so I thought an explanation of what a reserve is and why someone might choose to pay for one to be set might be useful.

It is worth knowing, first and foremost, that the minimum reserve capable of being set on eBay is £50.  If you see an eBay listing with a reserve set then the minimum price you will pay for that item will be £50.01.  Not so long ago I used to enjoy running through eBay bidding any reserve item up to £49.99, knowing that it had absolutely no consequences if the item didn't meet its reserve (but someone spotted that and complained and I was asked to stop!).

Reserves are most often set where a seller doesn't want to see an item sold below a particular price level. In the case of stamps this might be because the seller does not want to see a sheet of stamps sell at under its value and then be split up for sale as individual stamps.

The listing in question - a tete-beche pair of stamps - consists of two stamps which individually would be worth a total near enough to, or greater than, £50. Therefore it makes logical and economic sense to secure at least that minimum value to avoid the risk of the pair being split up and sold separately.

A reserve is often also used where the item for sale is relatively rare and any previous examples sold sufficiently long ago that their listed value is considered out-of-date.  This is a double-edged dilemma - the price may have risen because over that elapsed period the value may have increased due to the lack of supply; or alternatively, financial circumstances may have changed prices across the board and price expectations consequently lowered.  In this situation, setting a reserve allows the seller the luxury of knowing that if the item does not sell at the price he had hoped, he has generated a list of interested parties and can review his expectations without having to part with the sale item.

Possibly the main reason why a seller might set a reserve, is that they are in two minds about whether they want to part with the item for less than a specific amount.  For example, where the seller has a large purchase to make and requires a particular figure to be realised from the sale in order to buy something else, it makes sense to set a reserve so that if the item does not sell for the price anticipated, the seller is not left with no stamp AND still insufficient income to achieve his intended goal.  The stamp can then be set aside and, having established its value, might be made available at a later date when the next, perhaps less expensive purchase, looms large.

The final reason why a reserve might be set is simply in order to establish a value for insurance purposes, so that were the item to be used in a public exhibition it would be possible for the Museum or Gallery to insure it against damage, loss or theft.  Under these circumstances the reserve would be set at vastly more than the anticipated value so that whatever the price the auction established, the stamp would remain with the owner and no auction sales contract broken.

I hopes this goes some way to helping clear away some of the mystery surrounding reserve prices. I am sure there many other reasons why a seller might choose to use a reserve so please do add your own comments to this thread.

(Thanks go to Derek for writing this up for me in about 10 minutes!)

Happiness doesn't come from getting something we don't have, but through recognising and appreciating what we do have.

Posted By: Steve
Date Posted: 05 May 2016 at 07:51
A reserve is often the norm on general, antique, collectables, and philatelic auctions. The only reason we don't see it too often on eBay is because it is set fairly high; higher than most Cinderella sales would be expected to reach

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