How to Price Silent Auction Items: 6 Rules to Follow

Unfortunately, pricing silent auction items isn’t glamorous. It involves math and some research, but the right pricing can be the difference between auction success and an auction bust.

After item procurement, pricing your silent auction items can be your next biggest challenge. And you thought all you needed to do was simply gather enough item donations! Never fear, use this blog as a resource to ease your pricing worries.

Here’s 6 rules to keep in mind when pricing your items:

1. Research the Known Price of Tangible Items
2. Consult with Supporters to Estimate the Value of Intangible Items
3. Set a Minimum Bid at 30-50% of an Auction’s FMV
4. Set a Higher Minimum Bid for Unique Auction Items
5. Start by Increasing Bids by 10% of the Item’s FMV
6. Offer a “Buy-It-Now” Option at 150% of the Item’s FMV

Let’s get started!

Pricing Silent Auction Items: How to Estimate Fair Market Value

Fair market value (FMV) is a concept that can be applied to put a monetary value to the item that a buyer and seller agree upon as representing the worth of an item.

This is important for the nonprofit industry because raffles and auctions rely on donors to value the price of items.

When it comes to auctions, knowing the FMV of an item helps you calculate the starting bid and bid increments, so it’s important to get the most accurate value before you start pricing items.

Let’s dive into the details!

Research the Known Price of Tangible Items

Tangible items are easier to establish an FMV than intangible items. These items are typically physical items that have a standard retail price that is well-known or easy to find with a little research.

For example, if you are including AirPods or a $100 gift certificate to a popular restaurant in your silent auction, the FMV would be the retail price of AirPods and the amount on the gift certificate would be the FMV.

Some tangible items can be a little more difficult to assess the FMV. Sports memorabilia, signed items, and other items that carry unique value that don’t have a definitive retail price involve more research when estimating FMV.

Good sources to help establish FMV include:

• eBay. Determining FMV for almost any item can be found on eBay, the world’s largest auction platform.
• Item donors. The people that donated the item to your silent auction can give you context of the value and estimated FMV. But keep in mind, some item donors may overestimate the value if they have an emotional attachment to that tangible item.
• Other silent auctions. Look to silent auctions that are similar to yours and evaluate how they priced their silent auction items. They may not be exactly the same, but you could see some overlap that makes sense for your pricing strategy.

Consult with Supporters to Estimate the Value of Intangible Items

Intangible items are great to include in your silent auction. It’s important to make sure you have the right mix of tangible and intangible items when soliciting and writing your silent auction letter requests. They are great sellers because of the one-of-a-kind value they offer.

Intangible items include things like:

• Once-in-a-lifetime Experiences
• Exclusive VIP Access
• Unique Services

It is still important to make sure you are estimating the correct FMV so you can get the most return from your intangible silent auction item.

An educated guess of what your audience will be willing to pay is what’s important here. Each item could be perceived differently by your audience, but the more time you take to estimate their inherent value, the better chance you have for a successful silent auction.

Consider these factors when trying to determine FMV for intangible items:

• Audience Demographics. You know your audience best! Make sure you take into account age, income, gender, family life, religion, etc. with item procurement and setting the FMV for intangible silent auction items.
• Previous Event Interest. Look to your past to influence the decision of FMV for your intangible items. If it is an annual event, your audience demographic most likely stays the same, so you can look to which items did well last year and how you can replicate (and improve) similar items in this year’s silent auction.
• Consult with Fellow Fundraisers and Supporters. Think of your go-to fundraiser friend or most loyal supporter. Ask them their opinion! Pricing silent auction items is important, so get all the feedback you can.

Fair market value is at the foundation for all things silent auction pricing. Once it is established, we are ready to tackle the next step of the process: how to set the right starting bid.

Pricing Silent Auction Items: How to Set the Right Starting Bid

The starting bid for any item, tangible or intangible, can either deter or encourage a bidder. Let’s make sure to knock your silent auction out of the park and set a starting bid that leaves bidders excited to donate money for your cause!

Set a Minimum Bid at 30-50% of the Item’s FMV

Now that you have established the fair market value for all of your silent auction items, the starting bid for each item will be calculated from that value.

For some items, it could be a simple math equation, but for others, it may require a little more thought into the psychology of the bidder at your silent auction.

A starting bid can be dependent on:

• Audience Demographics
• Bargain Donor Mentality
• Popularity of the Item
• Donor Loyalty to Your Mission
• Emotion Behind an Item

The general rule of thumb is to not go above or below 30-50%. It is a balance of not starting the bidding too low and reducing the return on your auction, while also wanting bidders to be invested in the bidding process.

With a less popular or less unique item, the lower range of 30% is recommended. But if you have big ticket, one-of-a-kind items, set a higher starting bid for those silent auction items.

Set a Higher Minimum Bid for Unique Auction Items

Because of the natural excitement of these unique items, help yourself out and set a loftier minimum bid. These items can survive with a higher starting bid, so 40-50% of FMV is ideal here.

For example, school auctions typically see crazy gamification and bidder engagement with something as simple as parking spots. You know this intangible item sells, so set a higher starting bid (and continue to raise it year-over-year)!

With these unique and popular items, it’s important to make sure all your auction rules are clearly spelled out, so when the bidding frenzy begins, every play is fair!

Gamification is an important strategy with exclusive items like this, but you need to attract bidders’ attention first—especially because the higher starting bid may be perceived as a “turn-off.”

Make sure to follow these tips to make these big-ticket items stand out and get the most proceeds for your mission:

• Strategize Item Procurement. Be strategic with your item procurement so these items can stand out. You don’t
  want to saturate your silent auction with less exciting items and overcrowd the display for big-ticket items. A powerful donation request letter will be the perfect asset to your procurement process.
• Optimize Display. Whether you need a display case, spotlight, pedestal, glitter, fabric, or music, make sure to draw attention to your silent auction display—specifically the exclusive items.
• Highlight Unique Items. On auction event night, make sure to make announcements highlighting the unique items that are available in the silent auction. If you have a fundraising auctioneer on event night, utilize their role to incite bidding!
• Use Text Messaging. Finding a way to communicate with your guests during your event is essential to driving more bids in your silent auction. If you are using mobile bidding, text messaging and scrolling ticker messaging are powerful communication tools to keep your silent auction top of mind for your bidders. Who doesn’t carry their phone everywhere they go nowadays?

Starting bids can be adjusted on a case-by-case basis, but the more educated your starting bid is, the better you will be able to create the right bidding momentum for your auction.

Pricing Silent Auction Items: Choosing Bidding Increments

Another “how-to” of the silent auction pricing world involves bidding increments. It could directly impact how many bids each item receives.

Start by Increasing Bids by 10% of the Item’s FMV

The general recommendation is to start by increasing bids by 10% of the items FMV. Although, there can be reasons for a little wiggle room, so we recommend 10-15% of FMV is reasonable.

To best strategize the pricing for your silent auction and bidding increments, consider these topics:

• Look to Past Events. If an item has performed really well at a past event and a same (or similar) item will be present this year, increase the bid increment to 15% of the item’s FMV. Looking to year-over-year statistics can help you decide where to tweak your pricing strategy. Even a 5% increase can create dramatically increased revenue when compounded over the course of your auction.
• Rethink Pricier Items. For items with a higher FMV, bidding increments should stay at 10% so that they don’t grow too large and discourage bidding.
• Make the Bid Increment Visible. If you are using paper bid sheets, make your bid increment visible so the bidder knows exactly how to bid. With mobile bidding, the system only allows the next bid to be at least the established bid increment.
• Round to a Whole Number. Make it easy on you and your guests and round the bid increment to the nearest whole number. Your bidders will thank you!

If there is a healthy ratio between guests and silent auction items, there should be a solid number of bids on each item in your silent auction. If it takes more than 5-8 bids to get to 70% of FMV, then your increments are too low.

Offer a “Buy-It-Now” Option at 150-200% of the Item’s FMV

A “Buy-It-Now” option is another great piece of the puzzle of knowing how to price a silent auction. Offering this option to buy an item immediately is a good way to ensure more items exceed their FMV when bidding closes.

From the perspective of the bidder, it’s also a great option for people that don’t want to waste their time bidding and are willing to pay top dollar for a specific item.

OneCause recommends the industry best practice of offering a “Buy-it-Now” option at 150-200% of the item’s FMV.

Selling an item fast and for top dollar helps your proceeds, and when other bidders see that a desirable item has already sold, the feeling of scarcity encourages them to bid up another item they really want.

Disclaimer: Use this option wisely—it may not make sense for your particular auction items. The natural bidding should never exceed the “Buy-It-Now” price.

You won’t want to offer this option on every item, though. Items that should not have a Buy-it-Now option include:

• Items with high emotional appeal
• Unique or one-of-a-kind items
• Experiences you can’t find anywhere else
• Items that have started bidding wars in the past

Nice job! You made it through all 6 rules on how to price a silent auction. Remember, the pricing questions don’t end when the silent auction countdown strikes zero, so let’s talk about closing out your auction.

Wrapping Up

Want to perfect other phases of your silent auction? Check out our resources below to help you optimize your fundraising strategies!

• 6 Essential Silent Auction Rules: Host Your Best Auction Yet – rock your next auction with these best practices designed to help you raise more.
• Top Strategies for Auction Event Survival – every auction can use new strategies to fuel giving. Check out these new ideas to survive and thrive!
• Top Silent Auction Software Support Tools: 12 Options– explore these must have auction support tools to power your fundraising.
• Silent Auction Guide: Plan the Perfect Event [Updated]  – all you needed to know to plan the perfect silent auction is in this guide.