Last week we discussed strategies for procuring buzzworthy auction items and preparing donors to bid. Today we explore another essential piece of the auction planning process: setting opening bid prices.
You spend months preparing for the annual auction, but when the night comes, you have just a few hours to meet your fundraising goals. So how can you set the starting bids and bid increments that best maximize your chances for success?
The process can be a balancing act: Starting points that are too high may discourage bidding, while opening bids that are too low may limit revenue.
Here are 4 questions to help you think through this important process.
1. What is the fair market value (FMV) of my items?
The fair market value (FMV) of an item describes its worth relative to similar items on the market and what buyers might pay. Knowing your item's FMV is a good starting point for determining an appropriate opening bid.
Some items have a clear-cut FMV. Many donated goods like electronics, gift cards and collectibles can be found or compared to similar items on eBay and Amazon.
However, many one-of-a-kind, unique items can't easily be valuated—which is exactly why they generate the most "buzz" and highest bids. Here you'll have to look for other possible benchmarks to determine an FMV.