What is a Reserve Price?
A Reserve Price is the minimum amount set by a seller for a lot, indicating the lowest price at which the seller is prepared to sell. Generally, if bids fall short of the reserve price, the item remains unsold, though the seller may choose to agree to the sale. We will keep the highest bidder informed about the status.
The item is awarded to the bidder whose offer equals or exceeds the reserve price by the end of the auction. For instance, if the reserve price of a lot is €15,000 and the highest bid is €14,500, the lot isn't automatically sold to the highest bidder. In such cases, the seller may choose to sell at that price. However, if the highest bid is €15,100, the lot is directly sold at this price.
Why Reserve Pricing?
- Transparency: reserve pricing creates transparency and makes expectations clear by eliminating pricing uncertainty from the bidding process.
- Fairness: reserve pricing reduces the unfairness of sniping bidding strategies where a bidder places the highest bid at the last moment to outbid others and win a lot.
- Predictability: reserve pricing creates a predictable outcome because you know that an item will be awarded when the Reserve Price is met (in comparison to the uncertainty of “allocation” lots).
What is the difference between No Reserve price, Reserve price and Allocation?
- No Reserve price: guarantees that the item is sold to the highest bidder. No minimum bid amount (reserve price) is required.
- Reserve Price: A minimum amount required to guarantee the sale of a lot.
- Allocation: the highest bid must be approved by the seller for the sale to proceed.