Reserve Price Vs Buy Now

Reserve Price Vs Buy Now

The “Buy Now” scheme allows a customer to buy an item whenever he wants, at a fixed price.

A Reserve Price is indicated when the item will not be sold at a price lower than a certain set price.

In the “buy now” scheme, a buyer may be prepared to offer a higher price for an item which he badly needs, but since the price is already fixed by the store, he gladly buys the item. Your store loses the difference. Usually this method is used to sell commodity items or fast-moving items for which the demand is on the higher side. The advantages are:

1. You will be able to sell more items because the buyers know once they select the item they are certain that they would receive the same in due course (depending on the delivery terms you have stipulated) and that there is no waiting period. Most buyers are happy with this arrangement.
2. You will be able to compete with others who are not following this method, otherwise, the buyers need to bid for an item and wait and take their chance of clinching their order or not because the item in question will be sold only to the highest bidder.
3. Eventually this will even drive more traffic to your store as the buyers are confident that they can buy items at a reasonable price from your store without having to wait.

The “Reserve Price” scheme, on the other hand, is used mostly for items which are slow moving or certain unique or rare items known as “collector’s items”, antiques and curios, or used items or a “one-off” article meaning no more of the same article is available for sale. The advantages are:

1. Though you have fixed a certain price as the rock-bottom price at which the item in question will be sold, buyers will compete with one another to buy this item, each buyer outbidding the other in the process resulting in more profit for you.
2. Further, since you have fixed a “reserve price”, you have the option to withhold the sale if you are not satisfied with the bids received.
3. If you stock and offer more such items, the buyers will always remember your store whenever they are searching for rare or unique items, increasing your store’s popularity.