WHILE most people don't attend charity auctions looking for a bargain, they do expect to find unique items at a fair price.
When pricing up items at your next charity auction, you might find yourself wanting to throw out arbitrary numbers in an attempt to value hard to quantify items.
This is a bad habit that admittedly many charity auction hosts have. Luckily, there’s a logical way to price even the weirdest items that you may come across.
Whether you’re using an event management group – like nationally-recognised Superstars – to help source and curate auction items, or you're recruiting them yourself, the target is to find a minimum bid that will help create interest and competitive bidding.
Event management groups are fantastic at navigating these muddy waters, especially for first-time event coordinators, but they’re not always accessible, so here are some key elements to consider the next time you feel baffled over plausible price tags.
1. Consider your fundraising target
While it’s important to realize that you probably have a minimum amount you’ll need to raise to consider the evening a ‘success’, you’ll also need to understand that it can’t all come from auction items.
Personal donations, price-per-plate dinners, and fun side events – like raffles or casino games – are good ways to add to your evening's overall earnings.
Expecting to raise too much of your fundraising target with auction items alone can lead you to unrealistically overprice them.
2. Weigh your expenditures
Remember to consider your total budget when both valuing and sourcing auction items.
Make sure that your budget is large enough that you can get a good amount of items, but not so many that you saturate the auctions market.
Do your best to get as many items donated as possible – especially when it comes to things available at the event itself, such as hors d'oeuvres, drinks, or favours.
Weigh your expenditures against any reliable fixed income, like ticket sales, and see what is left to be raised. Consider each item individually, as some items of intense interest can be priced a little bit higher without deterring bids.
3. Calculate market value
When calculating the market value, either look to see what similar items sell for, or consider the source and rarity of the item. Find out what each item would retail for in a local store.
For harder to quantify experiences – like a stay in a luxury home, or dinner with the mayor – hop online and find out what similar experiences would cost. Check Airbnb or other homes to hotel sites for similar residences.
Consider your target audience’s hourly wage bracket, alongside what they’ve already paid for the cost of the dinner. Then bundle those prices together and find a happy place to stick that price tag.
4. Factor in your attendee demographics and current economic conditions
Know your audience! If you’re marketing to more affluent attendees, it may be wise to consider bumping up the price of luxury or exclusive items. These types of attendees are more likely to bid on a slightly higher starting bid.
While you’re at it, make sure that the items in your auction also closely align with the attendee's demographics. Don’t put an overly opulent tiara into the bidding catalogue for a middle-class audience.
Pay close attention to the economy and current exchange rates as well. These factors are sure to impact your audience’s purse-string tension.
Even at high-class auctions, don't saturate your market with exclusively expensive items. Throw in a few small or reasonably priced items to promote competitive bidding.
5. Build the ideal market
The items you have available to put into auction will influence the type of micro-market you’re building.
It’s unusual to have more items available than you have bidders. This saturates the market and is unlikely to spark any friendly bidding competitions.
If you do create a saturated ‘buyer’s market’, consider reducing the minimum bid on certain items to generate renewed interest. In a buyer’s market, set starting bid prices around 20 to 30 per cent of their calculated retail value.
In a ‘seller’s market’ – the type of market you want – the ideal ratio is roughly one auction item per every two attendees.
In this scenario, you can easily set minimum bids a bit higher, as not everyone has the chance to walk home with a prize. Hover your prices somewhere around 40-50 per cent, while making sure that only the most exclusive and interesting items approach the 50 per cent mark.
Follow these tips from Superstars, and you’ll give your next charity auction a better chance of success.
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