eBay Auction vs. Buy It Now: Considerations for Buyers & Sellers
eBay is one of the best places to sell items online (and one of the largest eCommerce businesses in the world). It’s useful for both business owners looking for consistent sales as well as for everyday people just looking to sell a few of their own possessions.
When you list an item on eBay, there are two primary listing styles: Auction and Buy It Now.
Auctions allow customers to bid on your items, while Buy It Now is a more traditional fixed-price sales model.
What are the key differences between eBay Auction vs. Buy It Now? Which should you use for your own listings?
Are you an eBay shopper looking for info on how to get the best deals on eBay? Check out this section.
How do eBay Auctions work?
eBay auction-style listings are modeled after traditional auctions, with a few key differences.
The seller lists an item, sets a starting price, and sets the length of the auction. By default, items are listed for 7 days, but 3, 5, and 10-day auctions are also possible.
If desired, the seller can also set a “reserve” price. This is the minimum amount that the seller agrees to sell the item for.
For example, a seller could list an item for 7 days, with a starting price of $1 and a reserve price of $50. When the auction ends, if the highest bid is less than $50, the item would not sell, and the seller could re-list the item.
If no reserve price is set, the highest bid amount will win — even if it’s the starting bid of $1.
Once the item is listed, buyers are free to place bids on the item. eBay bidding can be done manually.
If a user is willing to pay $10 for an item, they can simply place a bid for $10. If another bidder offers $12, the first user can manually bid again to maintain the highest offer. At the end of the auction term, whoever is the highest bidder wins the auction.
There is also an automatic bidding feature that buyers can use, allowing buyers to place their maximum bid, and the system will automatically bid up to that amount.
For example, a buyer could set their maximum bid to $20. If the current bid is $10, the system may bid $11 now, and then automatically increase the bid up to a maximum of $20 as other buyers place bids.
Unlike traditional auctions, eBay auctions end at a predetermined time, even if there are still active bidders. In a traditional auction, bidding usually continues until nobody is willing to outbid the highest current offer. With an eBay auction, the auction concludes automatically at the set end time.
“Bidding wars” can sometimes lead to items selling for more money.
The excitement of an auction often draws in more buyers.
Items may sell faster than fixed-price listings.
This method often works well for rare or uncommon items.
This method is often a good option for single items.
The seller can let buyers decide what the fair price is.
Auctions take a bit more effort to list and manage.
Buyers aren’t required to pay right away, and sometimes the winning bidder won’t ever pay for the item (you can re-list the item in this case).
The item could sell for less than hoped (a reserve price can prevent this).
Timing can matter — if a listing ends in the middle of the night, there may be fewer bidders in the crucial last few minutes of the auction.
How do eBay Buy It Now listings work?
eBay Buy It Now listings, also called fixed-price listings, work more like traditional online marketplaces, like Amazon.
The seller can list an item or items, and set a predetermined price. Buyers can then purchase the item for that fixed price, and they will immediately be prompted to pay for the item.
This style also allows sellers to list multiples of the same item. For example, a seller could create a listing for a popular video game and indicate that they have 35 units of that game available. The listing would stay active until all 35 units have been sold.
The eBay algorithm may also reward listings that sell well and offer multiple units. If you have many of the same item to sell, you may find using a fixed-price listing is ideal.
There’s also a “or best offer” feature that sellers can use. For example, you can list an item at $50, but allow buyers to make offers lower than that $50. The seller can then manually accept or decline the offer.
Sellers can easily list multiple units.
Prices are set ahead of time.
Listings are easy to manage and edit.
Sellers do not have to worry about timing.
Buyers are prompted to pay as soon as they purchase.
Markdown Manager can be used to manage sales and markdowns.
There’s no possibility of a bidding war, or items selling for higher than expected.
There’s no urgency to buy, or excitement for buyers.
Sellers have to come up with the right price, instead of letting the market decide in an auction format.
eBay Auction vs. Buy It Now: For sellers
For sellers, the decision between Auction vs. Buy It Now can have big repercussions. It can affect how quickly your items sell, and how much you can sell them for.
There’s no clear right or wrong listing style. The reality is that it depends on the type of item(s) you are selling, your comfort with risk, and your experience as an eBay seller.
With that said, here are some considerations to keep in mind:
To avoid risk, Buy It Now is best. With Buy It Now, you set exactly how much you want to sell the item for. There’s no risk of it selling for less — but there is the chance that it won’t sell at all.
To maximize potential sale price, Auction is best. There is the potential for a “bidding war,” when multiple buyers are bidding against each other and driving up the price.
For multiple units of the same item, Buy It Now is best. You only need one listing, which cuts down on the management effort required on the seller’s end.
For unique, rare, or unusual items, Auction is often best. The listing may get more exposure as an auction, and if collectors find it, they can drive up the price. Just be sure to use a reserve price (or higher starting price) if the item is valuable.
Finally, remember to consider the impact of eBay selling fees. “Final value fees” are the same on both Auction and Buy It Now listings. However, insertion fees (the fees to actually list items) can differ.
Most eBay sellers get 250 free listings each month. eBay store owners can get more. If you list more than 250 items/month, you may pay insertion fees to list additional items.
If you are selling many units of the same item, this is another reason to use Buy It Now listings. A single listing (and single insertion fee) can be used for hundreds or even thousands of identical items. If you were to use Auction listings instead, you could end up paying more for listing fees.
Which eBay listing style should I use?
The answer to this question is: It depends.
It depends what type of products you are selling, how experienced you are as an eBay seller, how many followers you have, whether or not you have an eBay store, and dozens of other factors. Some of the most important to consider are:
Item rarity: Rare items may sell for more at auction, but if they are too obscure, there may not be many bidders. It’s best to use a reserve price, in this case.
Selling speed: Auctions have a defined end date (3, 5, 7, or 10 days after listing). If you set a low starting price and no reserve, the item will almost certainly sell. Buy It Now listings, on the other hand, may never sell.
Number of units: If you have several of the same item that you are selling individually, Buy It Now listings are generally the best option.
Item demand: If the item you are selling is in high demand, Auction style may result in a higher sales price. Sellers could also choose to use Buy It Now and simply list at a higher price point.
The best advice for eBay sellers is simple: Experiment with both listing styles, and see what works best for your situation.
You can also gather data using Terapeak. Terapeak is a free eBay analytics service that is available through the eBay Seller Center.
By using Terapeak, you can conduct market research, monitor price trends, and optimize your listings.
Auction with Buy It Now: The best of both worlds?
Finally, consider the option to essentially use both styles.
On auction-style listings, sellers have the option to add a Buy It Now feature. This allows buyers to purchase the item right away for your Buy It Now price, or to place bids as usual.
You list an item using an Auction listing, with a starting bid of $1 and a reserve price of $50.
You set a Buy It Now price of $100.
Until bidding reaches the reserve price of $50, the Buy It Now option will remain (allowing buyers to instantly purchase and bypass the auction).
Once bidding exceeds the $50 reserve price, the Buy It Now option will be automatically removed.
This approach can be useful for certain items, particularly if you’re not sure how well the auction will perform.
eBay Buy It Now vs. Auction: For buyers
For shoppers, both Buy It Now and Auction Style listings have benefits.
Buy It Now is simple, quick, and you know exactly how much you’re going to pay. But unless you constantly search eBay for new listings, it’s unlikely that you’ll score a really great deal on an item. The majority of Buy It Now listings are priced at fair market values — and listings that are cheaper are often purchased very quickly.
Auctions are exciting, unique, and can sometimes result in some great deals. With an auction, you never really know what is going to happen — particularly because many bids are often placed in the final few minutes of an auction listing.
The upside of auctions is that you can sometimes score a great deal, particularly on more obscure items that may have fewer bidders. The downside is that it’s easy to get caught up in the rush of an auction and end up spending a bit more than you wanted to.
The decision of whether to use an eBay Auction vs a Buy It Now listing depends primarily on the type of item you are selling, or the type of buying experience you want to have.
To get some of the benefits of both listing styles, sellers can opt to use an Auction with a reserve price, or an Auction with a Buy It Now option.
Want to learn more about selling online? Check out this comprehensive guide to eCommerce statistics from CouponFollow.
about the author
Marc Mezzacca is CEO of CouponFollow, a consumer savings engine that surfaces popular coupons. He has been in the coupon and deals industry for over a decade with a deep interest in evolving e-commerce technologies.