Let’s say you’re the type of collector who collects… let’s say comic books in the $790 to $1200 range. Obviously you’re the type of collector then to whom this amount is disposable income. Odds are you are looking to complete a set or something, not to buy and sell like a commercial art gallery. If so, when a rare item like a specific issue $800 to $1200 comic comes up for sale, would you say “Nah, I’ll take my chances” or “OMG, I’ve got to have X-Men #X for my collection, the heck with the price!”
The BIN seller is probably hoping to snag one of those buyers… If not, he’ll sell it for the going market price at the auction.
The easier it is to pick and choose among several items, the less likely that the price is out of line.
Even though others have pretty well answered it, I’ll give my version:
From the seller’s point of view, the purpose of an auction is to sell an item for the highest possible price that anyone is willing to pay for it.
The purpose of also including a “Buy It Now” option, but at a relatively high price, is to appeal to any potential buyers who might have been willing to pay an even higher price than it might go for if it were auction-only, but who for some reason prefer, or insist on, avoiding the auction process. If the seller decides to do this, they’ll want to set the “Buy It Now” price as high or higher than they think the item would ultimately sell for at auction, but not so high that no one would ever consider buying at that price.
If you have things on BIN with no auction, you’re essentially using ebay as your sales website. Correct me if I’m wrong, but I think you can set up a BIN to sell eighty identical widgets and ebay will keep selling them until they’re gone. That’s much less hassle than setting up eighty auctions that you’d have to run one after another to keep from being your own competition.
Ebay used to have the option for a Dutch auction to handle that. I seem to be a member of the .1% that actually understands how a Dutch auction works, so I think ebay no longer offers this type of auction.
In a Dutch auction, you bid X pieces at $Y/each. When the auction ends, the high bidder is allocated all his items, the next highest as many as he bid and so on until all items are accounted for, and all the winners pay the price bid by the lowest winning bid…that being the market value for the N items auctioned.
It seems that more than half of ebay buyers still don’t understand proxy bidding, though, so there was no way Dutch auctions were ever going to work out. They have been used for IPO stock offerings, and seem like a good way to maximize capitalization of the company…at the expense of Wall St. insiders, so they haven’t become popular there either.