How to Set Starting Bids At a Silent Auction
Many silent auction hosts struggle with setting up minimum starting bids for their auction items.
- What is a fair starting bid for a silent auction item?
- Should I suggest a certain bid increment?
- How do I set a minimum starting bid while still encouraging people to bid higher?
- Where do I download silent auction bid sheets?
These are all perfectly fair questions and luckily, we have the answers. This guide to silent auction starting bids will explain how to determine what the Fair Market Value of each of your auction items is. Then we’ll walk you through how to set a starting bid and what a reasonable minimum bid increment looks like for your items.
Determining a Fair Starting Bid for an Auction Item
Setting a reasonable starting bid for a silent auction item takes some research. You need to determine what the Fair Market Value (FMV) or Suggested Retail Value (SRV) of each item is. Essentially, this gives you the estimated value of an item based on similar items and their prices.
The easiest way to determine the FMV of your silent auction item is to go online and do some shopping! Amazon and other online shopping platforms will have listed prices for your item or similar ones. That will help you determine how much your item is worth. Determining what the FMV of your item is is the first step in setting a starting bid.
Unique Silent Auction Items
Some items you will receive for your silent auction will be more difficult to determine the FMV for. This includes unique items like experience-orientated gifts, special access, home-made crafts, and other less tangible donation items. In these situations, a bit of research and some educated guessing is required.
Take a look at your guest list. Put together some information about their average income, past silent auction bids, and general preferences. Then, come up with a price that you think they would be willing to pay for an item. If you need help, ask your donors for their opinion. Remember, just because an item is worth a lot, doesn’t mean a guest will be willing to pay top dollar.
Set a Starting Bid
The purpose of a silent auction is to raise as much money as possible for your charity fundraiser or organization. That being said, stay realistic about what you can raise and how much guests will be willing to pay for your items. Typically, silent auctions yield around 50% of an item’s actual retail value.
There are different theories about where to set the starting bid in relation to FMV. The important thing to keep in mind is that the minimum bid price is up to you and your organization. You know what your fundraising goal is and who your guests are. These two pieces of information can help you determine fair starting prices.
We recommend setting a starting bid at 25 – 40% of the FMV of each of your items. Sometimes a lower starting bid can generate more interest in the item and can create the groundwork for some exciting bidding wars. That being said, setting the minimum bid too low can make undercut the value of your product and make it more difficult for you to raise money on that particular item.
Group Similar Auction Items Together
Some silent auctioneers and event planners recommend grouping similar auction items together. For example, if you know some items will generate more excitement than others, group them together. The logic being, the sum of the parts will be much greater when sold as a package. That also means you could set the starting bid at 40% for more exciting auction items and less thrilling donation items can be grouped together and started at 25% of the FMV. Again, this is up to your discretion.
Set Minimum Bid Increments
Having set bid increments is the key to hosting a successful silent auction and raising money for your cause. Allowing your guests to set the bids themselves will only keep revenue down and bids low. By pre-determine the bid increments for each item, all guests have to do is put their name beside the next bid amount. You control the rate at which the bid of each item moves up. If you set the starting bid of an item high, we recommend keeping your bid increments slightly lower so the price won’t jump dramatically after a few bids. For smaller items, set the minimum bid increment at around 10%.
Silent Auction Software
Bid Beacon is an online auction app that makes silent auctions easier to create and organize. We offer a free trial for new users and easy tutorials on how to get started. We also host dozens of resources including silent auction ideas, downloadable bid sheets, and a silent auction template to get you started. For more tips on how to raise more money with your silent auction and best practices for setting starting bids and bid increments, subscribe to our blog today!