How to Price Your Art for Silent Auction Items
Unfortunately, pricing silent auction items isn't glamorous. It involves math and some research, simply the correct pricing can exist the difference between auction success and an sale bust.
After item procurement, pricing your silent sale items can be your next biggest challenge. And you thought all yous needed to do was simply gather enough detail donations! Never fear, utilize this blog as a resource to ease your pricing worries.
Hither'southward 6 rules to continue in mind when pricing your items:
- Research the Known Price of Tangible Items
- Consult with Supporters to Estimate the Value of Intangible Items
- Set a Minimum Bid at 30-fifty% of an Sale'southward FMV
- Set a Higher Minimum Bid for Unique Auction Items
- Start by Increasing Bids by 10% of the Item's FMV
- Offer a "Purchase-It-At present" Option at 150% of the Item's FMV
Allow's get started!
Pricing Silent Auction Items: How to Estimate Fair Market Value
Fair marketplace value (FMV) is a concept that can be applied to put a monetary value to the detail that a heir-apparent and seller agree upon every bit representing the worth of an item.
This is important for the nonprofit industry because raffles and auctions rely on donors to value the price of items.
When information technology comes to auctions, knowing the FMV of an item helps you calculate the starting bid and bid increments, and so it'southward of import to become the most accurate value before yous start pricing items.
Permit'due south dive into the details!
Research the Known Price of Tangible Items
Tangible items are easier to establish an FMV than intangible items. These items are typically physical items that have a standard retail price that is well-known or easy to discover with a footling inquiry.
For example, if y'all are including AirPods or a $100 gift document to a popular eating house in your silent sale, the FMV would be the retail price of AirPods and the amount on the gift certificate would be the FMV.
Some tangible items can be a little more difficult to assess the FMV. Sports memorabilia, signed items, and other items that carry unique value that don't accept a definitive retail price involve more inquiry when estimating FMV.
Good sources to aid establish FMV include:
- eBay. Determining FMV for near any item tin be constitute on eBay, the earth's largest auction platform.
- Detail donors. The people that donated the particular to your silent sale tin give y'all context of the value and estimated FMV. But proceed in mind, some item donors may overestimate the value if they take an emotional attachment to that tangible item.
- Other silent auctions. Await to silent auctions that are similar to yours and evaluate how they priced their silent auction items. They may not be exactly the same, but you could come across some overlap that makes sense for your pricing strategy.
Consult with Supporters to Estimate the Value of Intangible Items
Intangible items are bully to include in your silent auction. Information technology'south of import to make sure you lot have the right mix of tangible and intangible items when soliciting and writing your silent auction alphabetic character requests. They are great sellers considering of the one-of-a-kind value they offer.
Intangible items include things like:
- Once-in-a-lifetime Experiences
- Exclusive VIP Admission
- Unique Services
It is notwithstanding important to make sure yous are estimating the correct FMV so you can get the about return from your intangible silent sale item.
An educated guess of what your audience volition be willing to pay is what's important here. Each item could exist perceived differently by your audience, only the more time you take to estimate their inherent value, the better chance you have for a successful silent auction.
Consider these factors when trying to make up one's mind FMV for intangible items:
- Audience Demographics. You know your audience best! Make sure yous accept into account historic period, income, gender, family unit life, religion, etc. with item procurement and setting the FMV for intangible silent sale items.
- Previous Issue Interest. Wait to your past to influence the decision of FMV for your intangible items. If information technology is an annual event, your audition demographic most likely stays the same, so you tin can look to which items did well last yr and how you lot tin replicate (and improve) similar items in this year'south silent auction.
- Consult with Boyfriend Fundraisers and Supporters. Think of your become-to fundraiser friend or most loyal supporter. Ask them their stance! Pricing silent auction items is important, and then get all the feedback y'all can.
Fair market value is at the foundation for all things silent auction pricing. Once it is established, we are ready to tackle the adjacent stride of the process: how to set up the correct starting bid.
Pricing Silent Sale Items: How to Set the Correct Starting Bid
The starting bid for any item, tangible or intangible, tin either deter or encourage a bidder. Let's brand certain to knock your silent auction out of the park and set a starting bid that leaves bidders excited to donate money for your cause!
Set a Minimum Bid at 30-fifty% of the Item's FMV
Now that y'all have established the off-white market value for all of your silent auction items, the starting bid for each item will be calculated from that value.
For some items, information technology could be a uncomplicated math equation, simply for others, it may require a lilliputian more idea into the psychology of the bidder at your silent auction.
A starting bid tin be dependent on:
- Audition Demographics
- Bargain Donor Mentality
- Popularity of the Item
- Donor Loyalty to Your Mission
- Emotion Backside an Item
The general rule of thumb is to not get above or below 30-50%. It is a balance of not starting the bidding as well depression and reducing the return on your sale, while also wanting bidders to exist invested in the bidding process.
With a less pop or less unique item, the lower range of xxx% is recommended. Only if you have big ticket, one-of-a-kind items, set up a higher starting bid for those silent auction items.
Gear up a College Minimum Bid for Unique Auction Items
Because of the natural excitement of these unique items, help yourself out and set a loftier minimum bid. These items tin can survive with a college starting bid, so 40-50% of FMV is ideal hither.
For example, school auctions typically see crazy gamification and applicant date with something as simple as parking spots. You know this intangible detail sells, so set a higher starting bid (and go along to raise information technology yr-over-year)!
With these unique and pop items, it's important to make sure all your sale rules are clearly spelled out, so when the bidding frenzy begins, every play is fair!
Gamification is an important strategy with exclusive items like this, but you demand to concenter bidders' attention first—especially because the higher starting bid may be perceived as a "plough-off."
Brand sure to follow these tips to make these big-ticket items stand out and get the most proceeds for your mission:
- Strategize Detail Procurement. Exist strategic with your item procurement so these items can stand out. You lot don't
want to saturate your silent auction with less exciting items and overcrowd the brandish for big-ticket items. A powerful donation asking letter of the alphabet will be the perfect asset to your procurement process. - Optimize Display. Whether you need a display case, spotlight, pedestal, glitter, cloth, or music, make certain to describe attention to your silent auction display—specifically the exclusive items.
- Highlight Unique Items. On sale upshot night, make sure to make announcements highlighting the unique items that are bachelor in the silent auction. If you have a fundraising auctioneer on result night, utilize their role to incite bidding!
- Use Text Messaging. Finding a fashion to communicate with your guests during your event is essential to driving more than bids in your silent auction. If you are using mobile bidding, text messaging and scrolling ticker messaging are powerful communication tools to proceed your silent auction top of mind for your bidders. Who doesn't carry their telephone everywhere they go nowadays?
Starting bids can be adjusted on a case-by-instance footing, simply the more than educated your starting bid is, the ameliorate you volition be able to create the right behest momentum for your auction.
FREE BONUS: Download our Clemency Auction Planning Guide. You can salve this resource equally a PDF and use information technology for your arrangement'due south next charity auction result. Take your next auction to the adjacent level with this downloadable resource!
Pricing Silent Sale Items: Choosing Bidding Increments
Some other "how-to" of the silent auction pricing world involves bidding increments. Information technology could directly impact how many bids each item receives.
Start past Increasing Bids by ten% of the Detail's FMV
The general recommendation is to start past increasing bids past 10% of the items FMV. Although, there tin can be reasons for a piddling wiggle room, then we recommend 10-xv% of FMV is reasonable.
To best strategize the pricing for your silent sale and bidding increments, consider these topics:
- Look to Past Events. If an item has performed actually well at a by event and a same (or similar) item will exist present this yr, increase the bid increment to 15% of the item'south FMV. Looking to year-over-year statistics can help you lot decide where to tweak your pricing strategy. Even a 5% increase can create dramatically increased revenue when compounded over the grade of your auction.
- Rethink Pricier Items. For items with a higher FMV, behest increments should stay at 10% so that they don't grow too large and discourage bidding.
- Make the Bid Increase Visible. If yous are using newspaper bid sheets, make your bid increment visible so the bidder knows exactly how to bid. With mobile bidding, the system simply allows the next bid to exist at least the established bid increment.
- Round to a Whole Number. Make it easy on you and your guests and round the bid increment to the nearest whole number. Your bidders volition give thanks you!
If in that location is a healthy ratio between guests and silent auction items, there should be a solid number of bids on each item in your silent auction. If it takes more than five-8 bids to get to seventy% of FMV, then your increments are too low.
Offer a "Buy-It-At present" Option at 150-200% of the Detail's FMV
A "Buy-It-Now" option is another swell slice of the puzzle of knowing how to price a silent auction. Offer this option to buy an item immediately is a proficient way to ensure more items exceed their FMV when bidding closes.
From the perspective of the bidder, it'southward also a cracking option for people that don't want to waste their time bidding and are willing to pay height dollar for a specific detail.
OneCause recommends the industry best practice of offering a "Buy-it-Now" pick at 150-200% of the item'due south FMV.
Selling an item fast and for pinnacle dollar helps your proceeds, and when other bidders see that a desirable item has already sold, the feeling of scarcity encourages them to bid up another item they actually want.
Disclaimer: Use this option wisely—it may not make sense for your particular sale items. The natural behest should never exceed the "Buy-It-Now" price.
You won't desire to offer this selection on every particular, though. Items that should not take a Buy-it-Now option include:
- Items with high emotional entreatment
- Unique or one-of-a-kind items
- Experiences y'all tin can't find anywhere else
- Items that accept started bidding wars in the by
Nice chore! Yous fabricated information technology through all 6 rules on how to toll a silent auction. Remember, the pricing questions don't end when the silent auction inaugural strikes zero, then permit'southward talk closing out your sale.
Closing Out Your Auction: Pricing FAQs
Frequently Asked Questions for Endmost Out Your Auction:
Q: What pricing information should be included in a silent sale receipt?
A: You should include the event name, applicant number, bidder name, particular number/name, full donation corporeality, method of payment, and a blurb that states: Taxation deductible as allowed by law.
Q: Is the price paid for a silent auction item tax deductible?
A: According to the IRS, bidders who purchase items at a silent auction are able to merits a "charitable contribution deduction" for the backlog amount of the cost paid for the item over its fair market place value.
Q: If an item is "priceless," is it withal taxation-deductible?
A: No. Because FMV was not established, the final auction bid is so the fair market value, and according to the IRS, a charitable contribution deduction cannot be claimed.
With all pricing details considered—recollect, your guests came to celebrate and raise money for your mission. Communicate the touch of their donations in a follow-up event thank-y'all notation!
No matter how yous price an item, never lose sight of the fact that if yous communicate your mission well and have supporters that care about your mission, that free energy will keep the guests behest and feel practiced about their winnings.
About the Authors: Melissa Merriam & Nicole Taylor, OneCause Consulting
Over the past 15 years, Melissa Merriam has helped nonprofits succeed, first in sales and business development, and at present, as Senior Director of Consulting and Training. She leads a team of 35 consultants and managers to provide service and support to thousands of clients. Melissa is a creative problem solver and strategist and spends much of her time researching, connecting with customers, and coaching her team to exist the foremost experts in nonprofit and event fundraising.
Nicole Taylor is a Consulting Managing director at OneCause, supporting nonprofit partners during event planning with her expertise in industry best practices, also as assisting in event execution as an effect manager onsite. To fuel her passion for fundraising excellence, she has been helping nonprofits at OneCause since 2013 and has worked on over 600 fundraising events across the country.
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Source: https://www.onecause.com/blog/how-to-price-silent-auction-items/