Equip-Bid strongly discourages placing reserves on auction lots, citing their tendency to deter potential bidders and ultimately result in lower final prices.
The platform's primary objective is to maximize sale prices, and reserves have consistently been found to hinder this goal.
While acknowledging that some sellers may insist on reserves, Equip-Bid emphasizes that this should be an exception rather than a standard practice. Items anticipated to sell for under $2,000 are particularly discouraged from having reserves. Additionally, reserves must be reasonable, typically set at 50% of the item's value, to ensure a high likelihood of meeting the reserve through independent bids. If a seller's reserve expectations are deemed unreasonable, affiliates are encouraged to decline including the item in the auction.
The minimum reserve for lots listed on Equip-Bid.com is set at $100, with the platform reserving the right to waive fees for lots that fail to sell due to reserves not being met.
For further inquiries, affiliates are directed to the FAQ section. If answers are still unavailable, they are encouraged to contact Equip-Bid for assistance.
RESERVES
Selling with reserves is discouraged by Equip-Bid, as it believes reserves are counterproductive to achieving the highest prices. However, affiliates are allowed to post items with reserves as long as they are extremely reasonable (50% of value or less) and the number of reserved items is kept to a minimum.
The reserve amount for each item must be entered before the auction is published and cannot be added afterward. Reserves under $2,000 are deemed ineffective and strongly discouraged, while those under $100 are not allowed.
An item with an unmet reserve may be relisted with a reserve one time. After the second relisting, the item can only be posted again without a reserve.
Equip-Bid's starting bid price is fixed at $10. Any starting bid over $10 is considered a reserve and is not allowed.
In the auction industry, the term "reserve" often carries negative connotations. Consignors typically request reserves for various reasons:
- Lack of trust in the auction format, stemming from a misunderstanding of its ability to determine market value effectively by exposing the asset to numerous bidders.
- Unrealistically high perception of the asset's worth.
- Belief that the asset won't attract the right buyers who understand its value.
- Unwillingness to sell the item at the present time.
If a consignor falls into any of these categories, it may be prudent for the affiliate to decline the consignment altogether. It's essential not to agree to sell an asset with a reserve without first conducting due diligence to determine its value.
To calculate the highest acceptable reserve for an asset:
- Determine the asset's value by searching closed auctions on platforms like K-BID.
- Decide on a percentage of value deemed acceptable for a reserve, typically between 50% to 70% (never exceeding 70%).
- Multiply the asset's value by the chosen percentage to establish the upper limit of the acceptable reserve.
Additional factors to consider include whether similar items have sold on K-BID before, whether bidders will appreciate the item's value, and whether the timing of the sale will impact the final bid price.
If an affiliate chooses to list a lot with a reserve, they should consider being compensated for doing so by charging a percentage of the reserve requested. K-BID will charge affiliates a Reserve Not Met fee for any lot that does not meet the reserve, or if the reserve is lowered after the high bid was placed and the high bidder opts not to purchase.
Affiliates should recognize that they serve both consignors and bidders. While it's important not to burden oneself with items unlikely to meet the reserve, maintaining trust with bidders is paramount. Bidders tend to be loyal to affiliates they believe sell items they are interested in, and repeated failures to meet reserves can lead to bidder disengagement.
Lowering Reserve Prices
Equip-Bid users have the ability to lower a reserve price on an item until the auction starts to close or even after it has ended in some cases. Reserves can be lowered to any amount above or at the current bid price but can never be raised.
It's important to note that if "Reserve Not Met" was applicable at the time the winning bidder placed their bid, the bidder cannot be held accountable for failing to honor their bid. Affiliates must recognize this situation and handle it accordingly, with invoices processed as No-Sale-Reserve Lowered, incurring associated fees.
Reserves may be lowered to the current bid price within 24 hours of the auction closing, with the winning bidder receiving notification. Instructions for lowering reserves are provided, including setting a new reserve price or lowering it to the current bid. It's recommended to obtain written direction from the seller before lowering reserve prices.