Silent auctions aren't necessarily quiet affairs. These events, at which items are auctioned to bidders naming their price on a sheet of paper, can be quite noisy --- especially if the auction items create a "buzz." To the uninitiated, pricing silent auction items may seem like throwing darts at a board. But it's actually a logical process. With some key pieces of information, you can price your silent auction items to generate high interest and aggressive bidding.
Calculate the retail or fair-market value of your auction items. Investigate what your items are currently selling for in retail stores. Items such as a stay at a donor's vacation house will require a little more legwork. Search online and in your local classifieds to see what similar lodgings in similar locations are advertising.
Factor in the demographics of your bidders. Affluent bidders will likely spend more than a more middle-class crowd. Current economic conditions will impact your audience's propensity to spend, too. A few high-end bidders may bid on a $5,000 vacation in Aspen, but items in the $25 to $100 range may appeal to a greater number of bidders.
Set prices according to a "buyer's" or "seller's" market. If you have more items to sell than people to buy them, you are working in a buyers market. Because bidders have many choices in this environment, set your opening bid lower to generate interest. If you have only a few items to auction and many buyers, you are working in a seller's market. More competition for fewer items allows you to set the minimum bid at a higher level.
Price items at 20 to 30 percent of their value in a buyer's market and 40 to 50 percent of their value in a seller's market. Only your "hottest" items should be set near the 50 percent mark, however, or you may end up with many unsold items.
Set minimum bids for cosigned items at cost plus 10 percent. For example, if a business has cosigned an item to you that is valued at $1,000 and your cost is $500, start bidding at $550 to $600.
Set minimum bid raises at 5 to 10 percent of the item's retail value. An item valued at $50 might offer bid raises in $5 increments. Setting bid raises in $50 to $100 increments is appropriate for a $1,000 item.
- Advertise "big ticket" items in advance to generate excitement about the event.
- Offer a wide range of items in different price ranges so all bidders can find something that fits their budget.
- Vacation House image by Olivo from Fotolia.com