Why You Need to Set a Low Reserve in Flippa Auctions
Many people are scared to set a low reserve in Flippa auctions After all, they’ve put a lot of hard work into optimizing and monetizing their site, so why do they want to risk selling it for peanuts?
The truth is that if your website is good enough, a low reserve should act as a tasty bait that buyers can’t resist snacking on.
Let’s take a look at why low reserves are the way forwards for your Flippa auction!
High Reserves on Flippa Are a Dangerous Game
A high reserve may appear to be a surefire way of protecting your auction from a smash and grab low bid, but to buyers the concept is very frustrating. Too much time becomes invested in creeping their bid up in the hope of meeting a reserve which appears annoyingly out of reach.
Buyers begin to lose patience and move on to other prospects or start inundating you with messages demanding to know what the reserve is. It’s a disheartening process for buyers and sellers with the very real threat of the reserve not being met.
What happens when this reserve isn’t met?
Well, a lot of sellers decide to relist the auction at a lower reserve. Surely someone will identify its full potential this time round, right? Think again!
Buyers are very careful with their money, so they’ll begin to ponder why this amazing website didn’t sell first time round. As a result, buyers’ trusted ‘risk antennae’ will begin buzzing and the interest levels will drop off quicker than you can shout “SOLD”. Put simply: websites sell for less than they should on the second attempt.
Set an Auction with a Low Reserve
You might be asking yourself “What’s the best step forwards then? I sure as hell don’t want to set my reserve to a dollar! That’s madness!” and you’re right to show concern.
However, when we talk about a low reserve, we simply mean the minimum you would accept for your site. Perhaps all you want for your website is a dollar, but if that’s true maybe it’s time you considered a different career…
Now, as long as you’re confident in your site’s prospects, you shouldn’t have any problem setting a low reserve.
Don’t forget that a low reserve is almost always going to be met quicker than a high reserve. And when that reserve is met you open yourself up to a world of benefits.
When your auction enters the hallowed section of Flippa known as ‘Reserve Met’ you can rest assured that your website is going to start turning heads. The site is definitely going to sell, so it becomes obvious that early bidders have worked out there’s a profit tucked in amongst all that HTML code.
Other bidders aren’t just going to want a slice of the pie – they’re going to want the pie, the bowl and your trusted family recipe!
Take Control of the Feeding Frenzy
This sudden surge of interest in your auction will cause a feeding frenzy amongst the bidders, so don’t be surprised to find the bids flying in thick and fast.
If you’ve managed to build up the interest in your auction carefully then the number of bids may well push your auction on to Flippa’s ‘Most Active’ page. It usually takes around 11 – 16 bids in 24 hours for this, but if you achieve this then it’s an amazing feather in your cap.
It demonstrates there’s a huge buzz about your auction and keeps the momentum flowing.
Once the momentum is there, and you know you’ve sailed past your initial low reserve, you are then presented with the nice idea of adding a buy it now (BIN) option to your auction.
With the flurry of activity put in place by your low reserve, you can tempt eager bidders to get a quick victory with a high price. And if the BIN option isn’t snapped up, you haven’t lost anything. Your reserve is still sitting nicely in your back pocket.
Why You Need to Stick with a Low Reserve
A low reserve may seem risky in the short term, but in the long term it can bring your auction many benefits.
Bringing in a hungry audience is key to any auction and a low reserve is a great option to start them salivating. As more and more buyers try to muscle in on the action a real buzz begins to build and you’ll discover that where there’s people, there’s profit.
Next time when you’re setting your reserve, take a few deep breaths and delete a couple of those hopeful zeros from your price. You’ll thank me.
Matt Preuss
November 26, 2014 at 8:50 pmVery useful info, Ben. I’ve just recently started using low reserve prices in my auctions. At first it was nerve-wracking…the thought that a valuable website could possibly sell for next to nothing. But eventually I put my faith in the marketplace and realized it worked. I got lots of bids which put it at the top of the “Most active” page which in turn generated more publicity, driving the bids up higher. I used to set a high reserve on my auctions, they didn’t sell….just got a lot of “what’s the reserve?” messages. I’d re-list it and each time the bids became lower and lower. The point is, low reserves auctions work – on a fundamental and psychological level.
Ben Ricketts
November 27, 2014 at 1:15 pmThanks for the comments, Matt. I’m glad you found it useful.
When your selling I feel that you need so much more than just a great product. You need a holistic approach to make sure you tackle all the mechanisms at play in the marketplace.