Pricing Silent Auction Items
Strategic Item Pricing Increases Participation and Bidding
Mar 29, 2009
Once items donated to a silent auction have been organized into categories and sorted into packages (see the articles Organizing a Silent Auction and Creating Silent Auction Packages), it's time to start pricing. Pricing is really a matter finding the tipping point between starting high enough to maximize value and starting low enough to interest the most possible bidders. It's important to remember that most silent auction items will generally come fairly close to their value anyway, because attendees want to support and organization. Lower starting bids will likely generate more overall activity for the auction.
Bidders will bid on more items to begin with if the amounts they are bidding are not individually of enormous consequence (not to mention if they believe they won't actually end up with the item). An attitude of, "Well, either I'll get it cheap, or I'll bid it up for the charity" is not uncommon. However, there is only a limited amount of time for auction bidding and attendees are also chatting, networking and sometimes drinking – there needs to be only a reasonable amount of bids in order to get the item up to (or close to) value.
Setting Starting Bids for Items
In general, starting bids should be about 50% of declared value, or slightly less (choose a nice round number, ending with a 0 or a 5 for starting bids below $100 or a 0 for bids over $100. There are some exceptions – following a gut feeling is appropriate here. If the staff member or volunteer pricing items is not in the same financial circumstances as a "typical" attendee, it might be of value to consult with someone who is the "target market" for item bidding, because their instincts on what makes sense is invaluable.
For items that are not sold on the open market, or items that are signed and not professionally valued, list "priceless" as the value and price based on instinct as indicated above. For items that do have a set value, use donor-provided pricing, or if not provided, use typical market pricing. If there is a discrepancy there, generally go with the donor-provided amount.
Setting Minimum Raises for Items
A minimum raise is the amount a new bid needs to increase from the previous bid. In general, items with starting bids of $50 or below should have a minimum raise of $5. For items starting between $50 and $150, the minimum raise should be $10. For items starting over $150, move to $20 or $25. For items starting over $500, a $50 raise is appropriate. For items starting over a $1000, a $100 raise is not unreasonable. For items starting at more than $2500 value, depending on the attendee profile, a $250 raise is not out of line. However, it might also be appropriate, given that those items are likely worth $5000 or more, to consider a live auction format rather than silent bid sheets.
Minimum raises should always be nice round numbers. While it may be tempting to have $40 raises or $125 raises, it is just going to create confusion on the math for those who are bidding while chatting and holding drinks. In general, stick to $5, $10, $20, $25, $50, $100 and so on. If it's not a value that can be found on paper money or coin (match with which everyone is really comfortable), it's not a good idea.
After starting bids and minimum raises have been determined, it's paperwork time! See the article Creating Silent Auction Bid Sheets for the next step.
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