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Guides » Pricing
Possible Pricing Plans
There are a few different schools of thought when it comes to setting up an online auction. We hope this guide will give you the pros and cons of each. Please email us if you have any questions or suggestions!
Over time, the market should decide the value of an item, given enough people. If you feel that you have enough supporters to push the value of an item up, then starting low might be just right for you! Remember that FCA does allow you to enter the retail cost of the item, so people will feel that they are getting a deal. As an added bonus, once someone bids on an item, they are partially invested in that item and likely to bid again. So starting all of the bids at a small amount, say $1, encourages participation and can induce bidding wars.
The potential drawbacks to this system must be considered as well. If you only have a few people participating, then you have the potential of selling things well under their retail value. This not only reduces the amount that you will make on your auction, it also auctions off a number of items that you could use later or less than you had hoped for. It also has the potential to disappoint supporters who are also donors. For instance, a talented artist donates a painting worth $500, and you sell it for $7; that person is unlikely to want to donate to your cause again.
- Pros to Start Low: Likely to sell all your items, encourages participation
- Cons to Start Low: May not reach your sales goals, possibly insulting to donors
Start at Fifty, Drop to Twenty Five
This plan is the most likely way to make your donors happy, and is really a fun way to run an auction. Start all bids at 50% of the item’s retail value; people feel like they are getting a deal, and you, as a charity, are making a good deal of money back on each item. Make sure to send out your emails and do your daily social media, and let this run for two weeks.
After two weeks, you’ll know what items have been bid on. And the people who made donations of things that have not received a bid will be starting to be nervous that they will be embarrassed that their item won’t sell. Drop all the prices of any items that do not have bids yet another 50%, to 25% of their original value. Donors won’t mind because they want their items to sell, and magically you have almost a whole new auction! Send out a second set of emails to reflect this new change, and you can re-use the items on social media as well if you need to.
- Pros to Fifty-Twentyfive: grabs attention, keeps people engaged, keeps donors happy
- Cons to Fifty-Twentyfive: time-consuming
This is the old faithful of the auction world: start all auctions at 20% of their original value. This is a great compromise between starting low and the fifty-twentyfive plan, and might be just what your auction needs. This plan does not facilitate a second wave of excitement like the fifty-twentyfive plan, nor does it necessarily encourage the bidding wars that may be created by starting low.
What this plan does have going for it, however, is that it’s a good way to run an auction when you’ve been doing auctions for a while and people are used to you providing high-quality items to a large donor base. Also, it doesn’t require as much monitoring or change, which makes it faster and easier for the charity that wants to make some money but does not have a lot of time to spare.
- Pros to twenty percent: old faithful, easy to set up and runs by itself
- Cons to twenty percent: none of the flash of starting low or fifty-twentyfive