In a Reserve Price Auction, the seller has set a Reserve Price, which is a price below which the listing will not sell. The Reserve Price is higher than the Opening Value. A reserve price allows the seller to start the auction with an opening value below the reserve price to initiate bidder interest and determine the fair market value of an item. If the seller as set a Reserve Price you will see either a "Reserve Price NOT Met" or "Reserve Price Met" message on the listing page depending on whether the current bid is below, or at or above, the reserve.
Reserve Price NOT Met- The current amount of the highest bid is below the reserve price and the item will not sell at auction close.
Reserve Price Met - The current amount of the highest bid is equal to, or greater than, the reserve price and the item will be sold.
If the highest bid at the auction close does not meet the seller's Reserve Price, the seller is not required to sell the item unless the seller chooses to do so. In this case, the seller will have a period of 48 hours after the auction close in which to contact the highest bidder whose offer was below the reserve price. Bidders who are contacted under these circumstances, however, are under no obligation to purchase the item.
Why does a seller use a Reserve Price?
In a Reserve Price auction, the seller starts the auction at a value below the lowest price at which s/he is willing to sell (the Reserve Price) to capture the bidder interest. This way, the bidders are not forced to bid at fair market value from the start of the auction. Also, many sellers prefer Reserve Price auctions when they are not sure of the market value of an item, and want to find an audience by enticing multiple bidders' interest.