by David Espino

I recently had the opportunity to venture into another product line and experiment with it. A friend of mine needed help listing a few sculptures made of exotic stones and gems. The sculptures were decorative animals, like Bears, Jaguars, Eagles, etc.

Since most of my experience is in the sale of Pop Culture collectibles, I thought it would be a refreshing new way to diversify my knowledge and skills by helping her list these items.

Preliminary research into this area of merchandise showed that there were very few of these items being put up for sale on eBay. I researched closed and current auctions and found only a handful of auctions that had anything similar to this. The ending bid prices were unremarkable, as well.

Being that there was no proven track record of closed sales for these decorative stone sculptures, I recommended that my friend place a reserve on the items, to protect her investment. Since this was a first-time experiment for her, she agreed.

Now I have to tell you, placing a reserve goes against my nature. In the area of Pop Culture collectibles that I deal in, there is normally a large enough demand for the items, making a reserve unnecessary. In fact, in the types of merchandise that I sell, (Collectible Toys) a reserve can often hinder a final ending bid amount because it places that little bit of doubt in the bidder’s mind at the moment of bidding and may discourage the bidder from freely bidding.

The thing about auctions with no reserve is that you know that if you are the high bidder, the item is yours - no questions asked.

When you bid on an item that has a reserve placed on it, you really don’t know until after the bid has been placed, whether you even have a shot at owning the item or not. If you place follow-up bids to try to discover what the reserve is, that can also be a discouraging exercise.

It’s an interesting thing about the psychology of sales, but in any kind of sales situation, you need to create an environment for the buyer that says "All systems go!" and has no downside or points of hesitation. Sometimes, if there is even the slightest point of hesitation, the sale is lost. That’s why I don’t like placing reserves.

Now, back to my friend’s auctions. They didn’t do very well. Her ratio of closed sales to reserve-unmet sales was dismal, probably about 10%.

But, she accomplished her objective, researching to see if online auctions were a good place to market that type of product and doing so with no money lost. We are in the process of researching other online markets for her products; specifically, targeted ways to draw her prospective customers to her website.

So the question is "To reserve, or not to reserve"?

The answer, in my opinion, is simple. If your item is in high demand, based on research that you’ve done on closed auctions, then you’d be better off, in most cases, to not place a reserve on that item. If, however, you have an unproven item, an item that has very little track record of sales and that you have a large investment in, go ahead and place a reserve, to protect that sale. Your own experimentation will tell you what is best for your particular products, but these are some good guidelines to work with.

It would also be great if you have the opportunity to run a simple test - run two identical items, one with a reserve and the other without.