Success in online auctions can be broken down into one fundamental aspect: selling assets. Through our years of experience, thousands of auctions and direct feedback from the buying public, we have been able to formulate a handful of key performance indicators that can help determine how successful (or not) an auction will be. We believe that you will have a much better chance of success if you have a true understanding of the importance of the following issues.
We also believe that items not selling due to reserves or lack of interest has a negative effect on K-BID and the rest of the affiliate network. Our goal is to assist affiliates in these areas and give them the best chance of success. If you find yourself struggling in these areas, please reach out for assistance.
We’ve seen over and over again low lot values are a risky venture for affiliates. The first issue with low lot values: if the lot values of the first few lots is low, many bidders will assume the auction is just garage sale junk and move on to the next auction. The second issue with low lot values: an affiliate’s reputation with bidders/sellers is based on the items they sell. Once an affiliate is known for conducting auctions with low value assets/lots; it impacts which bidders will look at their auctions, and it impacts the type of assets sellers will consign to them. The third issue with low value lots: winning bidders of low value lots are at least 3X more likely to become NO SHOWS. 77% of NO SHOW invoices for K-BID affiliates in January 2016 were for invoices with bid prices below $50. 65% of NO SHOW invoices for K-BID affiliates in January 2016 were for invoices with bid prices below $25.
When selling low value items, it’s best to group a number of items into one lot.
New affiliates often make the mistake of using the starting bid as a reserve, K-BID recognizes this as a reserve. While I understand the thought process behind this, it is flawed, and usually negatively affects auction results. The reason bidders are attracted to auctions is they think they’ll be able to buy an asset well below market value --- which they will, unless there are a number of other bidders thinking the same thing. Auctions are a numbers game. The more bidders placing bids on an asset, the higher the winning bid is likely to be. The best way to attract a lot of bidders (besides good quality pictures and complete descriptions) is to start the bidding as low as possible (remember it doesn’t matter where the bidding starts, it’s where it ends that matters!) When someone places a bid, they begin developing a sense of ownership of the asset, which is absolutely essential to driving bids as the auction gets closer to ending.
Affiliates are responsible for doing the due diligence necessary to determine asset value prior to agreeing to sell an asset with a reserve. These are the steps to take each time a seller wants you to publish their asset with a reserve:
- Conduct a search to identify the actual selling price similar assets sold for recently on K-BID or another online auction website.
- Determine the % of asset value you feel is acceptable for reserves (50 – 70% is a typical range, above 70% is really too high).
- Multiply the average price of similar items sold for by the acceptable reserve % --- that becomes the highest reserve you should allow on that asset.
The reality is if the seller insists on higher than a 70% reserve to asset value ratio, the seller is simply not motivated enough to sell their assets on auction --- those are the sellers you need to decline consignments from --- letting the seller know you’d be happy to discuss accepting consignments from them when they are ready sell without reserve, or with an acceptable reserve amount.
For more information on reserves - see this page: Using Reserves
‘No Bid’ Items
‘No bid’ items are bad for everyone associated with K-BID.com --- bidders/sellers/affiliates and K-BID, which is why it’s so important to determine the reason if you have had many ‘no bid’ items on your previous auctions. In most cases the number of ‘no bid’ items relate to one or more of the following issues: lot composition, asset type or using the starting bid as a reserve. Before agreeing to take a consignment from the seller, search the closed auctions on K-BID.com to see how similar assets have sold in the past. While K-BID bidders actively bid on a wide variety of asset types, there are certain categories of items that never do well: collectibles (precious moments, Nascar, etc.), most furniture, costume jewelry, miscellaneous household items.