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the hubris of the Reserve Price

by Rob Friesel

Before I begin my rant/tangent, let’s get one thing straight: I understand that the point of eBay’s “Reserve Price” is to protect The Seller. I understand that if there’s an “absolute minimum” for which you’re willing to sell an item… Well, that’s great that there’s a way to guarantee that you (as The Seller) will get that absolute minimum.

But here’s another idea: just start the bidding at the absolute minimum.

According to eBay:

Many sellers have found that too high a starting price discourages interest in their item, while an attractively low starting price makes them vulnerable to selling at an unsatisfactorily low price. A reserve price helps with this.

Now from the vantage point of The Seller, I can get behind this. Sounds like a great compromise.

But as The Buyer, this system really sucks. When I see an item listed at some price, I’m assuming that The Seller is willing to part with it at that price. It’s obvious that a person wants to garner the highest possible price. It’s an auction. That’s the way this works — arguably even the raison d’être for the auction system. But there’s something a little dishonest about the Reserve Price, especially in the eyes of a casual or “occasional” eBay bidder. It’s confusing to throw in a high bid only to have it look like you’ve been rejected.

Let’s speak plainly about this: no one reads on the web. Like right now, you’re not reading this sentence, you’re scanning for keywords based on the layout and my choices in typographic embellishments. So the fact that eBay’s message says that you have logged the high bid but the Reserve Price hasn’t been met is useless bullshit because the iconography is all red ×’s and cautionary alerts. It’s a passive rejection and dismissive — the way forward seems closed and prohibitive.

As The Buyer, you’re likely less inclined to continue bidding1. There’s a “slap in the face” characteristic to the Reserve Price. Your bid isn’t good enough. Throw a few more dollars on your bid. Not good enough. Step it up even higher than you wanted to bid? Still not good enough. And so on. Thinking about it this way, the Reserve Price hardly helps The Seller; by alienating your prospective Buyer(s), by dismissing the bids that they do make, you (The Seller) are shutting out the interested parties and potentially sabotaging your own auction. There’s also an aspect of good old fashioned Greek hubris bound up in the Reserve Price. The Seller posts an item at a too-good-to-be-true starting price and expects that the folks out there in eBay-land will fall all over themselves to out-bid each other right on up and over that arbitrary benchmark value that they have set in semi-secret.

An anecdote:

I’ve been lusting after Canon’s EF-S 17-85mm ƒ/4-5.6 IS/USM lens (which comes highly recommended, BTW) — but I’ve seen retail for anywhere from $450 to $600. I’m not a huge fan of eBay2 but I’ll make an exception if I think I can get a bargain on a “like new” or “practically mint” or “barely used” item that I covet so wantonly. With that in mind, last weekend I trawled eBay’s auction listings looking for an auction on that lense. When I found one, I placed a bid and when it looked like I’d been rejected — because it was all red and had that gnarly × and there didn’t seem to be any point in actually reading what it said — I selected the next auction listing and bid there. Now, my bidding on the second items was a different ball of frustration: bid, “you’ve been out-bid”, bid, “you’ve been out-bid”, etc. until I gave up. Then the “you’re the high bidder” email came through (for that first listing) confusing the hell out of me because just then I thought that I had active high bids on at least two of these lenses. After sorting out what really happened3, my panic subsided but my annoyance escalated. What was this Reserve Price? How high was I going to need to go to reach it? I placed a few more bids, trying to tip over that threshold but soon I stopped all together because the whole ordeal was feeling less and less like a bargain. The auction ended the next day with me as the high bidder and the Reserve Price not met.

Fast forward to this weekend: same lens, same Seller, same story. The auction just closed a few minutes ago with my bid as the high one and the Reserve Price still not met.

How does this system help anyone? The Seller now owes the listing fee on two failed auctions. At some point these will cut far enough into the bottom line that it would have made more sense to get the item sold the first or second time around4.

Granted, my bids reflect that I’m hunting for a bargain and as such, it’s not a tremendous surprise that I’m not meeting the Reserve Price. That said, it seems preposterous to me that the bidding on such an item would start so low5 when it’s listed as “new in the box”. It’s not hard to look up the MSRP on an item like this. Unless this Seller’s Reserve Price is that MSRP then I don’t think there’s a bargain hunting Canon photographer out there that would scoff at a higher starting price for this auction.

So that said: I look forward to bidding again next weekend.

UPDATE: This particular auction (and thus its predecessor?) turned out to be a scam. While the eBay site was saying “sorry dude, Reserve Price not met”, this alleged Seller was firing off forged emails from @us-paypal.com and @cs-ebay.com claiming issues with the Paypal account and how he was really in the UK and could I wire the money via Western Union instead? The whois on these domains all turned up the same domain proxy6 so I dropped the dime to the eBay security folks. Not that I’m expecting much out of this but I have to admit to being a little disappointed. Too good to be true and all that. At least I’m not out any cash.

  1. I know that I am. []
  2. Nor thrift stores, nor swap meets, nor flea markets, etc. []
  3. I.e., that I was nowhere close to the high-bidder on the second auction but was the high-bidder on the first but that the Reserve Price hadn’t been met — which is (in part) what this is all about. []
  4. And I’m just assuming here that these were the first and second attempts to auction this particular lens. []
  5. Especially two weeks in a row. []
  6. What kind of an amateur does this guy take me for? []

About Rob Friesel

Software engineer by day, science fiction writer by night. Author of The PhantomJS Cookbook and a short story in Please Do Not Remove. View all posts by Rob Friesel →

2 Responses to the hubris of the Reserve Price

Ubetcha says:

The reserve price is esp annoying for items that are relatively inexpensive. Just put the price you want. Stop the games and make the sale. The rest of this is bullsheeet. I consider all auctions with reserves as BAD communication and should be graded As such. yapinc

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