Frequently Asked Questions > Silent Auction FAQ > How do we set opening bids in our silent auction?
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Silent auction bidders are generally classified as "shoppers". They are looking for a deal. Knowing this ahead of time will save you a great deal of stress and confusion over the bids you receive at your silent auction.
1. Start by establishing the Fair Market Value(FMV) of an item. Note: This is often less then the Donor Value. Let's say the FMV is $1000
2. Accept that fact that the average Silent Item will ultimately sell for around 60-70% of FMV.
3. Start your bids @ 30-40% of FMV. In this case $300-$400
4. Bid increments are fine around 5-10% of the FMV. IN this case we move in $50 -$100 increments.
5. Do the math. If we start at $300, and go in $50 increments, how many bids do we need to get to our expected sales price of $600. In this case we need 6.
6. Does this seem reasonable? If not go with higher increments or start a bit higher.
7. If an item is expected to have no shortage of bidders you can start nearly anywhere without worry. iPad? Start at $15 and go in $3.47 increments and you will still end up at $750.
8. On the other hand if an item is looking for a pretty specific buyer. Imagine we have a "Basket of the Worlds Finest Knitting Supplies" Valued at $600. We are not likely to have enough interested bidders to get the needed bids for anywhere near FMV. Start bidding a bit higher. The shopper who appreciates Knitting Stuff, will still think they are getting a great deal at 50% of FMV.
Tips on combating the Bargain Hunter at your auction:
- Base your opening bid and increments on an items FMV - NOT the Donor Value (which tend to be inflated).
- Never lower prices mid auction. Once they know you will do this, they will just wait you out every year.
- Bargain shoppers need to be enticed at first glance. Make certain your opening bid is realistic based on the FMV.
- Don't fool yourself into believing, because your organization is really great and everyone in the room loves you, they will throw money at your silent auction. The average yields in a silent auction is 60%-70% of Fair Market Value(FMV)
Last updated on January 12, 2011 by Jim Miller
