Every Ebay seller who doesn’t use a starting bid price of .99 cents should justify that decision and consider the psychology behind that choice. Using a high starting price sends bidders discomforting messages, that’s for sure. Here is what I know about a .99 cent opening bid price, (with no reserve), it is saying to the perspective bidders:
1. I trust the market to accurately value this item.
2. I am willing to let someone else be ‘the winner’.
3. I am confident in the system to set a fair value.
4. I am guaranteeing by my actions that you will not pay more than is necessary.
I believe it’s this ‘positive’ message that is largely responsible for the consistent effectiveness of the low opening bid strategy. Many people have claimed, and I think it’s mildly true, that a low opening bid also appeals to the bargain hunters, who get emotionally invested in an auction because of the possibility of getting a bargain, then as the auction progresses, they are caught up in the drama and keep bidding. This might be true, but I believe my ’positive messages’ theory is more plausible.
Can you get caught with a bad outcome using a low opening price and no reserve? Yep. But if you implement our auction blueprint concepts, you’ll create a safety net that will leave you far better off than if you blunted your bidders