Auction Reserve Price {How to Determine}

Among the worries that usually Flippa sellers think about is on how to determine their auction reserve price. Reserve price is the lowest price to set in an auction where whenever the bid pass that min price mark, then the auction turns to green aka will be sold to the highest bidder.Setting a reserve too high will most probably chase your interested buyers away as their bids keep on going under the value of the auction reserve price. However by setting it too low you may show that you lack the confidence in the website or the item you are auctioning in thus causing people to keep the price low.

Some may choose not to worry at all and starts from $1 bid and just leave it to the flow. This is a dangerous method as luck is not always on our side. If the auction lacks advertising and traffic, you may only get low budget bidders, making the auction sold at a lucky bargain for the buyer.You may still choose this technique as long as you are willing to market the listing a bit more, paying extra to get plus attention to your auction.

Here is a few things that I would advise when determining your auction reserve :

Keep the reserve reasonable, people always tend to get unrealistic with their sites potential value. Of course it may actually be true in some aspect but being the site owner you may be bias. Try to get 3rd party opinions before setting your reserve. If your site is earning via a passive income of Adsense $50 per month, a 10x monthly reserve is reasonable at $500. However if your site requires higher cost, more time to manage,putting at the min reserve of 3x monthly price is a proper valuation.You can actually eliminate the reserve price by putting a direct min starting bid. This way you won’t have to worry about the reserve price and your buyer won’t hassle on asking you what is the reserve price.

Reserve price makes the auction more interesting but if you are not sure then its best to leave it behind and settle on a proper BIN and a nice starting bid.Explain how did you get the reserve price to your bidder properly.Remember if you cannot convince your bidders to reach that reserve price your auction will become a waste.Basically thats the things that you need to keep in mind whenever you want to start your Flippa or any other auction listings.

Until the next post, cheerio

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