I’m often asked about the value of having a buy it now price in auctions, so I thought I’d try a few things in this listing.
My personal view is that for sites selling anywhere other than the high end market, buyers require as much guidance as you can give when it comes to price.
I cover the psychology behind this in my Flippa is not Ebay post, but it’s interesting to see the results in real time.
I started with the end in mind. I wanted $500 for the site and at least $250, so that’s where I set the reserve.
I normally don’t set a reserve price, but I was curious to see what would happen and I found that bidders will jump around trying to hit the reserve and once they do, it’s a steady climb to the bin.
The pattern that I see repeat time after time on flippa played out here. Auctions always start slow with bidder 1 testing the waters to see if he can come away with a bargain. These “bargain hunters” will always start with the minimum bid and you almost never hear from them again. I guess someone has to get the ball rolling.
Bidder 1 is always quickly followed by fellow bargain hunter, bidder 2 who will throw out the next permitted minimum bid and then promptly follow bidder 1 off to the next auction.
This was a five day auction and there were no bids on day three, which is about the time sellers start to get nervous and either drop the bin price, or reveal the reserve price to who ever asks them, but mind you, only through “private message”. I guess it’s ok to let everyone know the reserve, as long as it’s one at a time and in private.
Never ever reveal the reserve price. It’s game over when you do.
This is the time you need to hold your nerve and not buckle. There is always emotion attached to selling anything that you’ve laboured over. You need to just chill and let things run their course.
I was asked for the reserve in this auction and my reply was a simple “thanks for asking, but giving away the reserve kinda defeats the purpose of having one in the first place” and we all moved on. If you don’t make a big deal out of these things, no one else will.
That was the only question I had for this auction as I was thorough in my sales letter and answered any potential questions there. The video walk through I made helped sell the site and showed buyers that I was a real human selling a real site.
As with all online auctions, the last two days are where things heat up.
If you follow the bids in the image above, you can see that there were three people really interested in this site. Bidder 4 wanted to find the reserve price and once he did, notice how bidders 6,7,8 were fighting it out in $10 increments until eventualy bidder 8 trumped everyone and hit the BIN button. I like bidder 8!
You will almost always see this pattern in BIN auctions on flippa. Buyers fight it out around 20-80% of the BIN price and then someone will jump over everyone and hit BIN.
Having a reserve is something new for me, but I’m going to try a some different things in the next few auctions, so stick around.
Can you PM me the Reserve Price?
