"No Reserve": Definition

by Wendel Clark ; Updated September 26, 2017
Handsome man during the shopping on line

"No reserve" is a term that you may encounter in an auction -- either online or during a live auction. As a buyer or a seller it is important to understand what a "no reserve" auction is.

Reserve Price

A reserve price is a price in an auction established by the seller as a minimum selling price. If the highest bid equals or exceeds the minimum, the owner must sell it for that price and the winning bidder must buy it. If the reserve price is not met, no sale is requried.

"No Reserve"

The term "no reserve" simply means that there is no established minimum price for the item being auctioned. This means that no matter what the winning bid, the owner must sell it for that amount.

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Benefits

The benefit of a "no reserve" auction for sellers is that it can attract more potential buyers as they seek out a bargain. The benefit for buyers is the possibility that the bidding will remain low and the item can be purchased for a low price.

About the Author

Wendel Clark began writing in 2006, with work published in academic journals such as "Babel" and "The Podium." He has worked in the field of management and is completing his master's degree in strategic management.

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