In auction lingo, what does the term "reserve" usually signify?

In auction terminology, "reserve" refers to a minimum price that must be met before the item is sold. This means that the seller has set a threshold price that must be reached at the auction; if bidding does not reach this amount, the item will not be sold. Essentially, the reserve serves as a protective measure for the seller, ensuring that the item is not sold for less than what they are willing to accept.

This concept is vital in maintaining the seller's interests during the auction process. It distinguishes between reserve auctions, where bidding must meet the preset minimum, and absolute auctions, where items are sold to the highest bidder regardless of the price. Understanding this term is crucial for both buyers and sellers, as it can significantly influence bidding strategies and outcomes.