> For the complete documentation index, see [llms.txt](https://docs.tipo.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tipo.io/tipo-auction/~/revisions/3uOn584ZFy41DoorDGbA/faqs/how-reserve-price-works.md).

# How Reserve price works

### What is Reserve price?

A **Reserve Price** is the minimum amount a seller is willing to accept for an auction item.

If the highest bid at the end of the auction is below the reserve price, the item will not be sold, and there is no winning bidder.

This protects the seller from being forced to sell at a price lower than their minimum acceptable value.

### Set up Reserve price

1. Open the app > click Auctions > create a new auction or open an existing auction
2. In A**dvanced settings** section, tick to **Reserve price** checkbox 

<figure><img src="/files/1XPK7B9LfLOWNHQYRVjJ" alt=""><figcaption></figcaption></figure>

3. Tick on **Show reserve price on front store** checkbox (optional)  > enter the reserve price amount in the field.&#x20;

There are 2 ways to place the buy out price:

* &#x20;**Fixed**: you place a price you want. For example: 500$
* **Percentage**: the reserve price will be calculated based on the  product price. For example: 80%

4. Click **Save** to update the changes

<div align="center"><figure><img src="/files/3m5wSnFBNL8VHbtNPPVH" alt=""><figcaption></figcaption></figure></div>

### Example:

* Reserve Price: 500$
* Customer A bids 400$ → The auction continues, but the item won’t be sold unless a higher bid is made.
* Customer B bids 550$ → Now the reserve price is met. The item will be sold if no one else places a higher bid.