| eBay offers four basic variations on the main online auction theme ”reserve price auctions, Dutch auctions, private auctions, and auctions with the Buy It Now option. We'll look at each in turn . Reserve Price Auctions A reserve price auction is one in which your starting bid price really isn't the minimum price you'll accept. Even though bids might exceed the initial bid price, if they don't hit your reserve price, you don't have to sell. Many buyers ” especially those just getting started ”don't like reserve price auctions, and shy away from them. That's probably because they appear more complicated than regular auctions (and they are, just a little), and also because the reserve price is never disclosed to bidders. In this case, lack of familiarity definitely breeds contempt, at least from a certain class of bidders. But there's something to the confusion factor. Let's say you set a minimum price of $5 for an item (really low, to get a buzz going and attract some early bidders) but a reserve price of $50 (because that's what you believe the item is really worth). If the high bidder bids $25, that bid doesn't win ”because it's less than the $50 reserve. Unfortunately, bidders have no idea how much more to bid to hit the undisclosed reserve price. Messy and confusing, eh? Why, then, would you opt for a reserve price auction? There are two possible scenarios: -
When you're unsure of the real value of an item ”and don't want to appear to be asking too much for an item ”you can reserve the right to refuse to sell the item if the market value is below a certain price. -
When you want to use a low initial bid price to get the bidding going more quickly than if the true desired minimum price (now the reserve price) was listed, the reserve price still guarantees that you won't have to sell below a minimum acceptable price. Remember, if no one bids the reserve price or higher, no one wins. " Mike Sez "  | I personally don't like reserve price auctions, and only run them on the rarest of occasions. My experience is that you turn a lot of potential bidders off by using a reserve price; it's better to create a regular auction with a higher minimum bid price, and be up front about everything. |
Dutch Auctions Dutch auctions are those in which you have more than one quantity of an identical item to sell. It's great if you have a dozen Scooby Doo Pez dispensers, 10 copies of Lord of the Rings on DVD, or a hundred units of white extra-large boxer shorts to sell. In a Dutch auction, you specify both the minimum bid and the number of items available in the auction. As in a normal auction, bidders bid at or above that minimum bid for the item ”although, in a Dutch auction, bidders can also specify a specific quantity that they're interested in purchasing. Determining who "wins" a Dutch auction is a little different from determining who wins a normal auction. In a Dutch auction, the highest bidders purchase the items, but all buyers pay only the amount that matches the lowest successful bid. Let's work through an example. Say you're selling 10 identical copies of a particular Lord of the Rings t-shirt. You indicate the number of items available (10), and the minimum bid (let's say $5). Potential buyers enter their bids, which must be equal to or higher than the minimum bid of $5; each buyer also indicates the quantity (from 1 to 10) that he or she is interested in purchasing. If 11 people bid $5 each (for one shirt apiece), the first 10 bidders will win the auction, each paying $5 for their items, and the last bidder will be out of luck. But if the 11th person had placed a higher bid ”$6, let's say ”then that 11th bidder would be listed as the #1 bidder, and the last $5 bidder (chronologically) would be knocked from the list. All 10 winning bidders, however ”including the person who bid $6 ”would only have to pay $5 for the item. (Highest bidders, lowest bids ”get it?) In a Dutch auction, the minimum price ends up being raised only if enough bidders place bids above the minimum bid. In our example, if 9 bidders bid over the minimum, but the 10th bidder bid $5, all bidders would still pay $5. But if the lowest bid was $6 (and the other bidders bid from $6 to $10), all 10 bidders would pay $6 (the lowest current bid). So posting a higher bid increases a buyer's chances of winning an item at a Dutch auction, but it also increases the risk of raising the price for everybody. caution  | You can't make a Dutch auction private. |
In any case, eBay handles all the details automatically, as long as you specify multiple quantities when listing your item. Private Auctions The next oddball auction type is relatively simple, compared to the others. If you're auctioning off something that is a little delicate, sensitive, or downright embarrassing, choose a Private auction and none of the bidders' names will ever be revealed publicly . It's great for items in the Adult category, although some bidders on ultra -high-priced items ”such as rare collectibles ”might also want to remain anonymous. Buy It Now eBay's Buy It Now (BIN) option lets you add a fixed-price option to your auction listings. The way BIN works is that you name a fixed price for your item; if a user bids that price, the auction is automatically closed and that user is named the high bidder. Note, however, that the BIN price is active only until the first bid is placed. (Or, in a reserve price auction, until the reserve price is met.) If the first bidder places a bid lower than the BIN price, the BIN price is removed and the auction proceeds normally. The BIN option is popular among professional eBay sellers with a lot of similar inventory. That is, they're likely to place the same item up for auction week after week; in this scenario, the BIN price becomes the de facto retail price of the item, and you can ship items as soon as you find a willing buyer ”you don't have to wait the standard seven days for a normal auction to end. You might also want to consider BIN around the Christmas holiday, when buyers don't always want to wait around seven whole days to see if they've won an item; desperate Christmas shoppers will sometimes pay a premium to get something now , which is where BIN comes in. | 