Should I set up a ‘Buy Now’ price for my online auctions?

How an online auction site sets up rules for “Buy It Now” and “Reserve” prices varies from site to site. From when the “Buy It Now” option is unavailable even if it is setup to when the reserve price is made known to bidders, the terms and conditions are different for every site. Also the fee levied on such options varies with each site. It will do you well, to go through the specific rules of the site you are using to sell your product thoroughly. As usual, when buying you should be cognizant of additional shipping charges, etc.

The common understanding of these terms though are worthy of discussion.  

“Buy Now” Online Auctions

An online auctions website can allow you to have a “Buy It Now” price for an item you have put up for sale. In such a case, the bidder can opt to buy the item right away at the said price instead of participating in an auction. This automatically ends the sale. Since we are talking about online auctions, we are only looking at cases in which the “Buy Now” feature is used along with an auction. It should be noted though that some sites will allow you to have only “Buy Now” sales. This would then function like any other online sale.

The various related rules that an auction site could have are as follows:

– Category: The “Buy Now” option might be available only for a certain type of items in online auctions.

– Price: The “Buy Now” price has to be a certain % above the start price.

– Feature disabled: The “Buy Now” feature could be disabled as soon as the first bid is placed. Or it could be disabled when it reaches a certain % of the reserve price.

Price determination:

The tricky part then is to determine what the “Buy Now” price should be. One strategy could be to keep an eye on similar products and see how they have fared in online auctions to determine the “Buy Now” price. Another alternative could be to arrive at a price that you are willing to accept for the product. Basically, you don’t want to regret it if a bidder opts for the “Buy Now” option you have for them.

Benefits:

– Control: Having a “Buy It Now” options lets you have some control over the price. It also gives direction to the auction. When a bidder sees the said price, they are less likely to start bidding a lot below that price.

– Speed: As the auction space has grown, ironically enough, people who make on “Buy Now” purchases have increased. These are most likely people who want the product right away. And it serves you well too because you can move on to other things in life. Not to mention, it also saves time spent on monitoring auctions.

– Psychological advantage: A “Buy It Now” price feels good to both buyer and seller. The buyer is happy that they haven’t paid too much which they can never be too sure of in an open online auctions. The seller gets the price they had in mind. A win-win situation if there was one.

Concerns:

– Auction site fees: Sellers have to be wary of the fees charged by the online auction site. Though this fee is usually not too high, it does eat up into your profit and has to play a role when you set your “Buy It Now” price.

– Need for speed: The need for haste could be a disadvantage too because it might put buyers off because of the pressure.

– Setting price: Most “Buy It Now” prices will have a lower limit set by a certain % of starting auction price or the first bid (if the option is disabled at first bid) and a higher limit has to be decided based on the % of the “Buy It Now” price itself (if that is the rule for disabling the option). This makes setting the price a tricky affair – it becomes a balancing act of sorts.

Auction Reserve Price

In such cases, having a reserve price comes in handy. An online auctions reserve price is a price set by the seller which is the bare minimum they want to sell the product for. If the auction bids do not reach the said reserve price, the seller is not obligated to go through with the sale.

Also, the reserve price is not publicized. That way bidders are not influenced by seller’s expectations. At most, some sites might just mention that the reserve price has been met.

It must be borne in mind that adding a reserve price could entail a fee by the auction site.

The bottom line is that a thorough reading of the auction website’s terms and conditions is inevitable. After which, lots of research has to be put into the price that you expect from your products in an online auctions. Unless of course, you are only a once-in-a-while auctioneer or the value of your products isn’t very high.

Learn more about Responsive WordPress Auction Plugin