Understanding eBay Auction Options

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Buying on eBay can be confusing for new buyers, and even established eBay buyers who have not been on the site for a while. Buying options have changed many times over the years. eBay offers many options including:

  • Auctions with no reserve
  • Auctions with a reserve
  • Auctions without a buy it now
  • Auctions with a buy it now

Before buying on eBay, it is a good idea to understand the buying options and your obligation as a buyer. When bidding, making offers or buying outright at a set price, buyers are obligated to follow through with the transaction and pay the seller. Too many unpaid items can lead to suspension from eBay. Let's examine the different buying options on eBay and the advantages and disadvantages of each.


An auction is a type of eBay listing where the seller sets a starting bid price, and buyers bid on the item. Even if there is only one bid, the seller must honor the sale. So sellers, make sure you always start auctions at the rock bottom price you will accept. It is no longer a good idea to start auctions at 99 cents on eBay. Bidding wars simply do not happen anymore. It is a tough lesson for new sellers. Buyers can get deals on products when sellers run auctions, and the listing gets little or no traffic. 

Auctions with a Reserve

A reserve is a minimum price need to sell an item on auction, only known to the seller. It is hidden from the buyer. The efficiency of reserve prices has declined over the years. Back when auctions were the only game in town on eBay, sellers used to set a reserve, start the bidding low, and watch the price rise and surpass the reserve. A reserve helps the seller get their desired price without the risk of starting an auction too low. But, reserve prices can be a deterrent for bidders. The auction displays the text, "Reserve not met" until the bidding has escalated to the reserve price. Many buyers don't want to play the "guess the reserve price" game, so they avoid auctions with a reserve. Sellers have also grown weary of this tactic because auctions with reserves often go unsold. So, sellers simply start their auctions at their lowest acceptable price and don't use the reserve option. (For more information, investigate eBay's policy about using reserve pricing on auctions.)

Auctions with a Buy It Now

Some sellers will accept a Buy It Now price for their items. The advantage of a Buy It Now is that the item can sell more quickly - the 5,7, or 10-day duration does not need to pass for the listing to end. The auction can end when a buyer clicks the "Buy it Now" button. But, there's a catch with Buy It Now. The BIN price disappears when the auction has been bid up to 50% of the BIN price. For example, let's say an item is up for auction with a starting price of $10 and a BIN of $50. Once the price is bid up to $25, the BIN option disappears. So, if you want to snag an auction on a BIN, it is best to do it early on before the bidding gets too high, or you are stuck with the auction running its course. 

The Best Way to Win an Auction

If you are a serious bargain hunter and want to snag auctions at low prices, it is best to use an auction sniper. Snipers are automated tools that place bids on items within the last seconds of the auction. The purpose is to be a stealth bidder - to bid secretly without the seller knowing of the buyer's interest. Bidding early encourages other bids, places the item higher in search, and draws more attention to it. To snag low priced auctions, stay under the radar and use a free sniping service like Gixen. Simply enter the item number you wish to bid on, your highest bid, and Gixen does the rest.

Updated by Suzanne A. Wells on August 4, 2016.