Thursday, August 11, 2005

Silent Auction Bid Steps - One Size Does NOT Fit All

I often get asked about what a minimum bid amount should be, or what a normal "raise" is for a silent auction item. Recently, I got asked the following on my "Ask the Maestro" page on my web site (www.auctionhelp.com):

We are going to hold a silent auction that will have a mix of consignment items and donated items. What are your suggestions as to setting minimum bids for the items (particularly donated)? Should we start the pricing at a discount to retail value, premium, or right at the retail value? Any insight you can provide would be helpful. Thank you.

Minimum bids are set generally at a level based on the "buying power" in the audience. If you plan to have more items than people, you are in a "buyers market" and will need to set the opening bid LOWER to generate interest in the item, because the bidders have so many choices. If you have fewer items than buyers, you can set the opening bid HIGHER because you now have a "sellers market" and supply in demand will work for you - more competition for the fewer items.

Typically, the range is from 20 or 30% of value (buyers market) to 40 to 50% of value (sellers market.) You do not want to be too aggressive on the opening bids. Generally, 50% of the value would be the very top end, otherwise the bidders will pick and choose what to bid on, and you will be left with many items unsold.

As for consigned items, I generally pick the cost, plus 10% as a starting point. That way, from the first bid you are making money. So, a consigned item with a value of $1000 and cost to you of, say, $500 would have a minimum bid of $600. Also, bid steps (minimum raises) should be relative to the value, typically 5 to 10% of the value of the item. It makes little sense to have a "$10 raise" on a $1,000 item, and also on a $100 item. The raise should be relative for each value range.

let me know how this works for you at your event.

Monday, May 16, 2005

Keep a Silent Auction Open Late? No!!

I recently received an email at my "Ask the Maestro" spot on my website that asked when the Live auction should be conducted (early, middle of the evening program or at the end?) Also asked was if it is a good idea to keep a Silent auction "open" until after the Live auction closes. The "myth" circulating around is that if a Silent auction is kept open late, bidders who were outbid in the Live auction would soothe their disappointment by bidding in the Silent as kind of a "last chance" opportunity to bid. Nice theory, but it just doesn't happen.

The fact is, at the end of the evening items are just not as exciting as they were earlier. The "frenzy" of bidding is fueled by the newness of having just arrived at the event and being introduced to the items for the first time. By the time the items have been on display for about 3 hours or more, they are just part of the decorations and blend in. Further, if you give bidders 4 hours to make a decision, they will use it all. The same decision can be made in 1 1/2 hours - if that is all the time you allocate.

Finally, imagine what you do to the cashiering check out folks when you combine people trying to leave with items that are still available for bidding. Yikes! For the sake of a very few additional bids late in the evening, inconveniencing all of your guests is not a good idea.

Late in the evening, after several drinks and a big meal, getting out and going home is what your guests are thinking about, not what else they can buy. Get the money early, and let them check out easily without a cashierng line and you will have happier guests who will come back next time you host a fund raiser.

Wednesday, April 27, 2005

Using a Celebrity Effectively at your Auction

Over the years I have had the pleasure (and sometimes NOT the pleasure) of working with hundreds of “celebrities” at my auctions. Most often their intentions are good, but their celebrity can get in the way of actually helping the client make more money at the event. A celebrity can be a real asset for your event on a number of levels. Certainly having a celebrity announcer or guest of honor adds a level of stature. It will put your event on the map in some circles. However, don’t make the assumption that the mere presence of the celebrity is going to add money to your bottom line. The celebrity must be in the correct role at the event. Using a celebrity as your auctioneer can be a disaster, unless that celebrity has done that task numerous times. A celebrity as auctioneer is generally as effective as an auctioneer as actor! You would be better off hiring the auctioneer and use the celebrity as the Master of Ceremonies and Live Auction Reader working with the hired auctioneer. The reason is simple: auctioning is a skill requiring timing and an acute sense of knowing the audience. It is a skill that takes years to develop, and celebrities just don’t do it enough to get good at it. The cost to you in lost bids could be staggering.

There is also the risk that the celebrity can be a “loose cannon” assuming that the audience is there to see THEM, and forgetting it is about the CAUSE. It is not a show, it is a fund raiser. It should be fun, but the money is made by selling things! Celebrities often forget this in the middle of their “schtick.”

A good briefing ahead of time to outline exactly what is expected of the celebrity (and what you don’t want them to do as well) is essential. I recently had a well known celebrity who was my MC interrupt me in the middle of auctioning an item to tell me that I should cut my bid increment because “everyone here is looking for a deal!” Of course, it killed the momentum of the item, and from that point on in the auction the audience kept looking for the deals! It cost the client dearly in lost revenue.

Convert Your Junk Into Jewels

I am often asked for a way to get rid of the small, not real popular gift certificates that are easy to get donated, but are not big revenue generators. You know the certificates, the $50 book of car washes, the chiropractic exam, the haircuts, dry cleaning, pizza coupons and so on. Auction committees always end up with too many of these, they don’t display well in the silent auction, are not real revenue makers, and they take up valuable space on the tables. Packaging can go only so far, and generally these items don’t really add significant value to the package anyway. So what to do? Here is an answer I have used very effectively for years.

Get rid of those small gift certificates profitably - use Balloon Sales or “Grab bags” - It makes no sense to put a $25 or $50 gift certificate on a silent auction table and have it take up valuable space. They will sell for about half or less than what they are worth on the tables. Make a list of the items with their catalog number and cut the list in to strips. Place one strip in each balloon and sell the balloon. The buyer gets to ‘pop” the balloon to see what they won. If you sell the balloons for $25 each, you make more money and save valuable table space. You can have $25 to $50 items in $25 balloons, and $50 to $100 items in $50 balloons. People love the idea that they “won” something as they will get a certificate worth at least what they paid, and could get something up to twice what they paid! What a deal! The yield (the value of the item versus the price paid) is generally higher than if the same item was sold in the silent auction, AND you saved valuable table space for the bigger ticket items.

Instead of Balloons, try selling red roses (with the strip of paper attached to the stem with a rubber band) for $25 and yellow roses for $50. Candy sampler boxes also work, and one auction many years ago used Beanie Babies with a small envelope attached that was such a big hit they sold out before the close of the silent auction!

Variation: At golf tournaments, insert certificates into sleeves of golf balls instead of balloons. Golfers love it! By the way, get a sponsor to supply the golf balls. They will do it gladly because it puts their logo in the hands of the buyers.

Creativity will keep your event fresh and your guests happy. Don’t be afraid to experiment with variations of this grab bag approach. Tie it in to your theme whenever possible. Let me know how it works for you!

Monday, April 25, 2005

A "Three Dog Night"

At a recent school auction in Palm Desert, California, we had the pleasure of selling not one, not two, but three puppies! Generally selling more than one puppy in an auction is not a good idea because the audience becomes "bonded" with the puppy being shown and the second high bidder is reluctant to take the "other" puppy. However, in this case it worked because we had two identical golden retrievers (female) from the same litter and both were shown. The second bidder had no problem with the "twin."

After these puppies were sold, a model brought another puppy - this time a Bichon. We started the bidding again, and the third puppy was sold for a bit more than the previous two.

Truly a "Three Dog Night." All successful bidders were singing "An Old Fashion Love Song" after their purchases!

Greetings!

Hi! This is "The Auction Maestro" Jay Fiske. In this new forum, I will be sharing with you my experiences as a charity auctioneer. I will pay particular attention to providing tips on how to get more money out of your event, and also how to reduce the stress on your committee.

Check back often, and be sure to register so you can make comments and add questions for me directly.