A reserve is a minimum you are willing to accept. It is hidden — buyers are shown whether it has been met, never what it is.
During the auction they see "Reserve not met", and then "Reserve met" once the bidding passes it. If it never does, the item does not sell.
What it is for
It lets you start low without risking a sale below your floor. That is the whole point: you get the bidder-pulling benefit of a low start without the downside.
What it costs you
Momentum. "Reserve not met" tells the room the seller wants more than this, and some bidders read that as a reason to stop rather than a reason to push.
So a reserve is not free, and a reserve set close to what you actually expect is usually worse than just starting there.
The rule of thumb
Use a reserve when there is a genuine floor — materials, cost of goods, a piece you would rather keep than undersell.
Do not use one to chase a price you hope for. The room decides that, and a reserve will not change their mind, it will just end the auction with the item unsold.
Questions people ask
Can buyers see the reserve amount?
No. Only whether it has been met.
What happens if it is not met?
It does not sell. You can relist it, usually with a different start.
Can I lower a reserve mid-auction?
Set it before. Changing the terms while people are bidding is not fair to them.
Is a reserve the same as a starting price?
No. The start is where bidding opens; the reserve is the floor it must pass.
Next: setting a starting price.