Enter the auction set price ($) and a reserve price rate (%) into the Calculator. The calculator will evaluate the Reserve Price.
Reserve Price Formula
RP = ASP \times \frac{RPR}{100}Variables:
- RP is the Reserve Price ($), the minimum price the seller will accept.
- ASP is the auction set price ($), the reference price you are using (for example, a target sale price or an estimated value).
- RPR is the reserve price rate (%), chosen by the seller/auctioneer (there is no universal “standard” percentage).
To calculate Reserve Price, multiply the auction set price by the chosen reserve price rate (as a percent divided by 100).
How to Calculate Reserve Price?
The following steps outline how to calculate the Reserve Price.
- First, determine the auction set price ($).
- Next, choose the reserve price rate (%), then use the formula from above: RP = ASP × (RPR ÷ 100).
- Finally, calculate the Reserve Price.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
Auction set price ($) = 2000
Reserve price rate (%) = 80
Reserve price ($) = 2000 × (80 ÷ 100) = 1600
FAQs
What is a Reserve Price in an auction?
A Reserve Price is the minimum price that a seller is willing to accept for an item being sold at auction. If bidding does not reach this price, the item will not be sold.
How does the Reserve Price affect the outcome of an auction?
Setting a Reserve Price can protect the seller from selling an item for less than they are comfortable with. However, if set too high, it may deter bidders from participating, potentially leading to the item not being sold.
Can the Reserve Price be disclosed to bidders?
It’s up to the seller whether to disclose the Reserve Price. Some sellers believe that revealing it can encourage bidding, while others prefer to keep it confidential to stimulate interest and competition.
Is it better to use a Reserve Price or start the auction at a minimum desired price?
This depends on the seller’s strategy. Starting the auction at a minimum desired price can attract bidders looking for a bargain, but it might limit the final sale price. Using a Reserve Price allows starting the bidding low to attract more bidders while ensuring the item won’t sell for less than the desired amount.
