If you were to describe silent auctions,simply following the literal meaning of the term will help you to know what there are all about. It is a type of auction where participants do not get charged up and vigorously follow up on the bids. Instead, silent auctions are relaxed affairs somewhat similar to leisurely going through the goods in a departmental store.
How Do Silent Auctions Work?
Just like traditional auctions, the merchandise in silent auctions is also kept on tables in a hall to help the participants closely inspect them before bidding. But there the similarity ends. There is no one calling out the bids and neither is there any auctioneer with a paddle motivating them on. In its place, each item has a bidding sheet in front of it with 12 to 15 rows on each of them.
When a silent auction starts, the participants write down the bids in the rows, every row having an amount that is greater than the previous one in increments that are pre-decided at the start of the auctions. After the auction ends, the organizers check the sheets and declare the winners of every item.
No fixed time frame is set for silent auctions.It can stretch from several hours to one day. Online silent auctions though can be held over 7-10 days for maximum participation of bidders from all over the world. After the winners are announced, the organizers dispatchand ship the items after receiving payment.
Items That Are Popular at Silent Auctions
It is generally seen that the bid amounts at silent auctionsare somewhat lower than that at physical auctions. This is primarily because these auctions are laid-back events devoid of any urgency and without an auctioneer motivating the participants to bid higher and higher. However, this does not in any way make the items inferior in quality. Selecting the right items and incentivizing them can fetch bids that will not be less than traditional auctions.
Statistically, there are some specific items that are very favored in silent auctionsand if you want your fundraising efforts to be successful, include a mix of them in the auction.
Club compatible items:
Classify items that complement each other in one large basket as it will lead to higher bids, more than what each item would have brought individually. It is a winning situation for both the bidder who gets more of the wanted goodies and you, for earning more for a bunch of items clubbed together. This is like the old saying that the total is more than the sum of the components.
Admission tickets:
Entry tickets to well-known events are generally lappedup fast by bidders at silent auctions.Even if the tickets are sold below their face value you still make a lot of money as they are sponsored by donors. It is a wonderful opportunity for the winning bidders to attend an event – games, theatre, movie, ballets, concerts, and more – at a bargain price and hence the demand for these tickets.
Sports gear:
This category is another great favorite at silent auctions.Items that face frantic and sustained bidding are camping sets, golf clubs, fishing tackle sets, and anything else that takes people outdoors for some fun and excitement. The call of the wild with gear bought at bargain rates is usually very difficult to resist.
Local bargains:
Another high-demand segment, similar to event tickets is local bargains. These include gift cards and discount coupons at restaurants, rebates in services like Internet connectivity and conference halls. The possibilities are endless here.
Food and beverages:
These are a natural attraction for bidders – items not only for themselves but for the whole family too. Craft beer collection, chocolate hampers, wine racks, and other such items that are rather expensive at retail stores can be had at rock-bottom prices at silent auctionsand hence are a big draw.
Other than these possibilities, seasonal goods sell very well at silent auctions.For example, gift items are a big draw at Christmas and Thanksgiving while vacation packages at affordable rates are a top draw in summer. Decide what you put up at silent auctionsbased on the time of the year too for maximum returns.
Pricing Items at Silent Auctions
After you have decided the items that you want to put up at silent auctions,theymustbe priced right so that you optimize your revenue generation, an area that is often neglected by the organizers. The success of the auctions has a direct bearing on the pricing of the items. You have to strike the right balance as too high base prices will discourage potential bidders while too low will not give good returns on investment.
So how do you get it right? Here are a few tips to follow.
- Set a Fair Market Value (FMV) for each item. The retail value of tangible items or vacation packages should be your benchmark. For others like discount coupons or exclusive experiences, evaluate the perception that people might have about the packages and set a price accordingly.
- Put the starting bid of each item at around 30 to 50 percent of the Fair Market Value so that the actual price is easily reached through bidding.
- The incremental bid amounts should be 10 to 15 percent of the FMV to allow the participants a healthy 4 rounds of bidding to reach the FMV.
These are some of the areas to focus on for successful silent auctions.
