Why does DLRC (sometimes) reduce a reserve after the start of an auction?
At DLRC, we often review incoming bids and, whenever possible, we will reduce the reserve on a lot to meet the current high bidder. In all cases, the new reserve is lower than the previous reserve amount and we are sacrificing profits to facilitate to help our bidders get a better deal. Some bidders are concerned that we start lots at a higher reserve in the hopes of getting higher bids, but this is not the case. We run around 8,000-10,000 lots per month in auction which means we rely heavily on computer formulas to calculate reserves. Whenever a bidder places a reasonable bid we use the lower-reserve tool to get the lot sold and the bidding process accelerated. This is in the best interest of the buyer and seller. Note that even though a reserve has been reduced, it is still possible to be outbid. The reserve reduction simply makes the process more efficient.
