9 Considerations when Setting Silent Auction Starting Bids

The starting bid for a silent auction item is the minimum amount someone can bid. For example, a fruit hamper that’s worth $250 may have a starting bid of $50.    

Determining the starting bids for items in a silent auction can be a challenging task. Too low and the item may not reach its retail or market value. This is particularly problematic if you’ve purchased the item for the auction. If the starting bid price is too high, it may deter people from placing bids.

A percentage of an item’s fair market value is often recommended, however, recommendations can range from 30% to 50%.  In this article, we will explore nine key considerations that can help you determine which end of this scale is appropriate for your auction items'.
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1. Time

The time you have available for the silent auction bidding can significantly influence your starting bids.

If you have two weeks to a month before the fundraising event, consider setting lower starting bids. Since there is more time for bidding, a few low or very low starting bids can create excitement and motivate bidders to engage with the auction.

2. The Item Itself

The item’s desirability to potential bidders is another essential factor to consider when determining the starting bid.

If you have a unique item or experience that’s generally hard for people to find (e.g. celebrity meet-and-greet), you may not need to set a lower starting price to generate interest.

In the absence of a fair market value for these items, fundraisers use their ideal winning bid as the amount to calculate the starting bid percentage.

Tip! If you are using supplied items on a sale or return basis, check that the starting bid includes a donation to your cause.

3. Competing Fundraising Activities

If you have several other fundraising activities planned during a live event, such as a live auction, raffle, pledge drive, entertainment, dancing, speeches, and a 3-course dinner, higher starting bids may be more appropriate.

With many activities competing for bidders' attention, setting a higher starting price can reduce the number of bids required to reach the desired price.

4. Connection with the Cause

If bidders are highly connected to the cause and the silent auction items offered are within their price range, they often bid more than the fair market value.  This means low starting bids can work well, but they are not typically required.  

5. Bidder Profile

The bidder profile is another crucial factor to consider.

Are bidders attending your event in their personal or professional capacity? Will their name, or their company name on the auction leader board encourage some friendly competition and more bidding activity. If yes, you can pass on lower starting bids.

6. The Item Donor

If you have items donated by community members or supportive businesses, chat with the item donor to determine if they have any expectations you need to consider.

If the item donor is happy with the price their item achieves, they will be more likely to donate to your next silent auction.

7. Reserves

Remember that you can set a reserve amount for each item.

An item will only be sold once it reaches the reserve price set in your silent auction platform. This allows you to start the bidding low without the risk of selling the prize at a price lower than you or the item donor will be happy with.

8. Increments

Think about increments. Typically, increments are set at 10% of the fair market value. For example a $100 beauty voucher will receive bids in a minimum of $10 increments.

Consider increasing or decreasing the increments once bidding is underway to maximise your auction total.

9. Previous Auctions

If you have run previous auctions, evaluate how effective previous starting bids have been for various items or items types. Use this information to guide your starting bids for your current auction.
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In Summary

Setting the starting bids for a silent auction requires a balance of several factors.

While there is no single rule that applies to every situation, carefully considering the above factors can help you set successful starting bids that will drive engagement and maximise funds for your cause.

Remember, with an online auction platform, you can always change your starting bids, so don't be afraid to monitor the activity and make adjustments as needed.

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