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SAN FRANCISCO (AP) - Most auction sites let sellers set a "reserve" price under which they are not obligated to sell the item. Sellers are assured they won't have to unload their item at a loss; sites make more on their commissions with such minimums.
So PropertyRoom.com took a big risk when it dropped the reserve-price option and started all bids at $1. But the move yielded surprising results: the average price increased 30 percent and the average number of bidders per item surged 50 percent.
"The board of directors was biting their fingernails," said P.J. Bellomo, the company's chief operating officer. "But more people keep showing up."
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