May 28, 2007 in Business

Prices jump when auction minimums drop

Associated Press The Spokesman-Review
 

Most auction Web sites let sellers set a “reserve” price under which they are not obligated to sell the item. Sellers are assured they won’t have to unload their item at a loss; sites make more on their commissions with such minimums.

So PropertyRoom.com took a big risk when it dropped the reserve-price option and started all bids at $1. But the move yielded surprising results: the average price increased 30 percent and the average number of bidders per item surged 50 percent.

The site, which sells items seized or found by police departments nationwide, quietly began informing sellers about the change earlier this year. The change covers nearly all items, including diamond rings, computers, coins and Rolex watches.

“The board of directors was biting their fingernails,” said P.J. Bellomo, the company’s chief operating officer. “But more people keep showing up.”

Propertyroom.com is hardly in the same league as auction site eBay. The eBay daily hit count is something like 18 million visits. Propertyroom.com measures about 16,000 daily visits, according to measurement service Quantcast.


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