How to Price Your Silent Auction Items
Nothing can stump a charity auction event planner more than trying to price auction items. It can be hard to put a price tag on merchandise, especially if the auction item is priceless. The good news is I have already made many mistakes and I will save you from doing the same! Read below for my silent auction pricing guidelines and best practices:
Starting bids depend on whether the item was donated or is being offered on consignment.
- Donated Items: For donated items, the starting bid should be 30% of the fair market value (FMV) of the item. For example, if an item’s fair market value is $100, you should start bidding at $30.
- Consignment Items: For consignment items, bidding should start at 10% above the cost of the item to the charity. If the item costs the charity $1,000, then bidding should start at $1,100.
- Priceless Items: Items that are priceless might include an art project created by your child’s class, or something sentimental that just can’t be tagged with a price. A good pricing strategy is to start the bid low to allow the guest’s emotional connection to the item determine the value and drive up the price.
All bids for donated and consignment items should incrementally go up based on their starting price, not their Fair Market Value.
This chart illustrates bid increments based on the items starting price:
$1.00 - $100 = $10
$100 - $249 = $20
$250 - $499 = $25
$500 - $999 = $50
$1000+ = $100
For priceless items, err on the side of lower bid increments like $10 and $20. If your increments are too high, it is too much of a commitment for a guest to place their next bid and they won't bid at all!
A good way to ensure your guests honor the suggested bid increment is to clearly state on the bid sheet the “minimum bid increment” required to bid on the item. For example, at the top of the bid sheet, clearly write, “Starting Bid: $200 – Minimum Bid: $20.”
WIN IT NOW:
Many auctions have “win it now” prices stated on their bid sheets for those guests who want to ensure they become the immediate “winner” of the item. The “win it now” price should be a premium price equal to about 150% of the item’s fair market value. I do not recommend a “win it now” price be offered for priceless and sentimental items, but it works well for accessories, vacations, memorabilia and other exciting merchandise that your guests might grow attached to. Remember that when allowing a guest to "win it now," the bidding will most likely never exceed that price. Use this option wisely!
A good bid sheet should include just the right amount of rows to encourage healthy bidding. You don’t want a bid sheet with 100 rows because if only 10 people bid on the item, and 90 rows are left empty, the bid sheet looks pretty pathetic. On the flip side, if you only have 10 rows for bidding, and the item drums up a lot of exciting bids, there will be no room on the sheet for your guests to bid. An ideal bid sheet has about 20 rows, allowing for plenty of bids without looking sparse.
Remember, a successful silent auction starts with a well thought-out pricing strategy. Although it may seem counterintuitive to price things low and have low increments, it gets more people involved in the bidding process, ultimately raising the most money possible. Follow these pricing guidelines and tips to make your auction a great success!