Auctions     |     30 October 2024

Starting Bids, Bid Strategies, and Setting Up Your Silent Auction Items for Success

Setting starting bids that attract bidders and drive success

23 minute read

Planning a silent auction can feel like a lot to juggle, especially if you’re new to the process. There are so many details to keep in mind, and one of the most important is knowing what a starting bid is and how to set it properly. Getting the starting bid right is key to ensuring your auction runs smoothly and maximizes its fundraising potential.

Read on to break down everything you need to know about starting bids, from basic concepts to practical tips on setting them up for success. Whether you're a seasoned organizer or handling an auction for the first time, by the end, you’ll feel confident in setting up auction items that keep bidders engaged and donating freely. 

What is a starting bid?

A starting bid, also called an opening bid, is the initial price suggested for an auction item. This number kicks off the bidding process and sets the tone for the auction's competitiveness. The right starting bid can help draw in more bidders and set the stage for higher final prices.

Think of a silent auction as a friendly competition. People need an entry point, which is where the starting bid comes in. If the entry point is too high, you might scare people off before they even get involved, but you could risk leaving money on the table if it's too low. Event organizers often stress over determining the starting bid for any given item. 

The difference between a starting bid and a reserve

It’s easy to mix up a starting bid with a minimum bid, but these terms can mean different things depending on the platform you use. Typically, the starting bid suggests where the auction should begin—it’s designed to attract as many bidders as possible. On the other hand, the reserve is the lowest amount the seller will accept for the item. Not every item will have a reserve, but they should all have a starting bid.

At Silent Auction Pro, we use the term “minimum bid” to refer to the starting bid, and the “reserve” is handled separately when entering the donation. Our software ensures no bids will be accepted below the donor’s reserve, so you can confidently set your starting bid to encourage participation without worrying about underselling an item.

For example, if a donor gives you a luxury vacation package worth $3,000 and says they don’t want it to sell for less than $1,500, that’s the reserve. You might set the starting bid (or minimum bid) at $1,000 to more participants, but the item won’t actually sell until bidding reaches the reserve price of $1,500. This distinction is especially important if you use consignment items, where a reserve is often required.

Remember, auction software may use different terminology, so checking how these terms are applied within your platform is always good. Silent Auction Pro’s system automatically protects items with reserves, so you can focus on running a successful auction without worrying about the details.

What should the starting bid be for a silent auction?

Setting the right starting bid is an important part of running a successful silent auction, but how do you figure out how to price silent auction items? Here's a simple, step-by-step guide to help you determine the best-starting bid for your items.

Step 1: Know the fair market value (FMV) of your auction items

The first step in deciding the starting bid is understanding the item's fair market value (FMV). FMV is the estimated price an item would sell for on the open market. This understanding gives you a solid baseline for setting the starting bid. For example, if you’re auctioning off a designer handbag that typically sells for $500, that’s your FMV. 

Step 2: Do some research

Don’t just take a donor’s word for the value of an item. Instead, do some quick online research to make sure the FMV is accurate. Look at what similar items are selling for on retail websites or auction platforms. This will give you a clear picture of what bidders might expect to pay. You can also check local shops or use resale sites like eBay to compare prices.

Step 3: Consider the audience

The value of an item can fluctuate based on who’s attending your auction. For instance, if your crowd is full of art collectors, a painting might fetch a higher price than at a general charity auction. So, while the FMV is a great starting point, consider your specific audience when setting bids.

Step 4: Set the starting bid percentage

Once you know the FMV, you can calculate the starting bid. A good rule of thumb is to set the bid between 30% and 50% of the item's FMV. This range encourages bidders to get involved without making the entry point seem too high.

Silent auction starting bid percentage

One of the most common questions when determining a starting bid is, "How much should I start with?" Typically, auction organizers set the starting bid between 30% and 50% of the fair market value. But this isn’t a hard rule—it’s more of a guideline that helps create a balance between drawing in bidders and protecting the item’s value.

For example, if you have a spa package valued at $200, a starting bid of 30% would be $60, while 50% would be $100. That range gives you flexibility depending on the item and the type of audience attending. Items that are unique or in high demand can start closer to 50% of the FMV, while more common items can start lower to get more bidders interested early.

Desirability and exclusivity

Items that are highly sought after or exclusive—like a weekend stay at a private villa or a signed sports jersey—can often start at a higher percentage of the FMV, closer to 50%. These items generate excitement, and people are willing to pay more for something they can’t easily find elsewhere.

Donated vs. purchased items

If the item was donated, you have more flexibility to start the bid lower since you’re not losing money if it sells for less. On the other hand, if you purchased the item, setting the starting bid high enough to cover your cost is crucial. For example, if you bought a vacation package for $2,000, you wouldn’t want to start bidding below that price. The goal is to find that sweet spot where the starting bid draws attention but doesn’t scare off potential bidders. 

Varying the percentage by item type

Different items may require different approaches. Experiences like vacations or event tickets tend to do better with a lower starting bid, as they often trigger an emotional response that can drive up the price. On the other hand, high-end or luxury goods might start closer to the 50% mark because bidders are likely aware of their value and willing to pay more. You should also consider all of these factors before deciding to include the estimated value of an item in your auction catalog. Depending on the item, the audience, and your goals, you may find it better to publish the estimated value or leave it a secret to drive bids. 

Examples of starting bid percentages

• A restaurant gift card valued at $100 could have a starting bid of $30 (30%).
• A sports memorabilia item valued at $500 could start at $150 (30%) or $250 (50%) depending on its uniqueness.
• A one-of-a-kind artwork might start closer to 50%, especially if the audience includes art enthusiasts.

Adjusting the percentage based on the item's appeal and the crowd will help your silent auction starting bid percentage set the stage for competitive bidding and maximize your fundraising potential.

The role of bid increments

While starting bids get the auction rolling, bid increments keep momentum. A bid increment is the minimum amount each new bid must increase. For example, if the current bid is $100 and the increment is $25, the next bid must be at least $125.

Why bid increments matter

Bid increments can impact the overall outcome of your auction. Set them too high, and you may discourage smaller bids, slowing the auction’s pace. Set them too low, and the auction might drag on, reducing excitement. Finding the right balance is key to keeping bidders engaged and competitive.

Best practices for setting bid increments

A good rule of thumb is to set bid increments between 5% and 10% of the starting bid. For example, if your starting bid is $100, you might set an increment of $10. However, you can increase the percentage for higher-priced items. An item with a starting bid of $1,000 might have an increment of $50 to $100. The idea is to make the increments large enough to make a noticeable difference but not so large that bidders hesitate to jump in.

Examples of how increments affect final sale prices

Let’s say you set a starting bid for a designer watch at $300, with a $25 bid increment. This bidding increment allows for a more gradual build-up, encouraging more bids. As each person bids slightly higher, the total can quickly add up. On the other hand, if the bid increment were $100, fewer people might participate, and you could miss out on driving up the final sale price. Keeping increments reasonable encourages more people to stay involved and keep the competition alive.

The psychological triggers of starting bids

Bidding in an auction goes beyond mere numbers—it’s about emotions. Understanding the psychology behind starting bids can help you set them in a way that maximizes participation and final prices.

The power of a low starting bid

Setting a low starting bid can create a sense of accessibility and encourage more people to start bidding. Even if someone wasn’t initially interested in an item, seeing a low starting bid might tempt them to jump in, especially if it feels like a great deal. Once they’ve placed that first bid, they become emotionally invested. This emotional investment makes it harder for them to back out as the price increases. Bidders often think, “Well, I’ve already paid $100. I might as well keep going.”

Real-world example: lower bids drive higher engagement

One well-known study from Northwestern University’s Kellogg School of Management found that auctions with lower starting bids tend to have higher final sale prices. Why? Because more people get involved early on, and the excitement of the bidding process drives prices up. Even if a bidder starts small, their competitive nature can push them to bid beyond what they initially intended to spend.

Bidders get caught up in the experience

The experience of the auction is where the magic of auctions happens. A bidder who only planned to spend $50 might get caught in a bidding war and end up paying $200 for an item. The emotional rollercoaster of winning and losing bids adds to the intensity, often resulting in higher final prices. By setting the starting bid low, you invite more people to join in, and once they’re in, they’re likely to keep going.

Strategies for setting up your auction items for success

Setting up your auction items does not mean listing them and hoping for the best. Whether your auction is in-person or online, you’ll want to take a thoughtful approach to help your items catch attention and attract bids.

Clear descriptions are key

Getting the highest return on your auction item starts with setting up your auction catalog. The way you describe your auction items can make a big difference. A clear, concise, and enticing description helps bidders understand the item's value. Include important details like size, condition, brand, or any unique qualities the item has. Include any interesting stories behind items, especially if they are unique or personalized. For example, the details behind the inspiration for a piece of art can draw bidders in and encourage a greater emotional attachment. 

High-quality images make a big impact

Images can speak louder than words, especially for online auctions. Provide professional, high-resolution photos of each item from different angles. Consider including images of the location or accommodations for experiential items like vacation packages to make the offer more attractive. High-quality visuals can give bidders a better sense of the item’s value and draw them into bidding.

Tell a story about the item

Bidders are more likely to engage with items with a story behind them. Instead of just listing a sports jersey as “signed by a famous player,” you might say, “Own a piece of history with this jersey signed by [player] during their record-breaking season.” Creating a narrative around your auction items makes them more appealing and personal. People are more inclined to bid on items with a unique story or emotional connection.

Creating a competitive bidding environment

Fostering a sense of competition is a key part of bolstering the success of your auction. When bidders feel like they’re competing for a limited opportunity, they’re more likely to raise their bids—and that’s exactly what you want.

Set up enticing themes or packages

One way to encourage competitive bidding is by offering themed packages. For instance, instead of auctioning off a dinner for two and a show as separate items, bundle them together for a "Night on the Town" package. These curated experiences tend to draw more interest, offering a complete experience rather than individual items. Similarly, items in a themed collection, like a "Home Spa Day" with luxury bath products, are more appealing than standalone items.

Utilize outbid notifications and live updates

Bidders are more likely to stay engaged if they know they’ve been outbid. Silent Auction Pro’s powerful features include automatic outbid notifications via text or email, keeping the competition alive throughout your event. Real-time updates let bidders know the highest bid, which can spur them to jump back in. Keeping bidders in the loop is key to driving higher bids, whether online or at an in-person event.

Leverage leaderboards and countdowns

Showing a live leaderboard of the highest bidders for online auctions can spark a competitive spirit. Bidders want to see their name at the top, and seeing others outbid them adds fuel to the fire. A countdown timer for closing bids also creates urgency, pushing bidders to act fast before they miss their chance. This combination of competition and urgency can drive bids up quickly.

Common mistakes to avoid when setting starting bids

Even experienced auction organizers can fall into common traps when setting starting bids. Avoiding these mistakes can make all the difference in the success of your event.

Mistake #1: Setting the starting bid too high

One of the biggest errors is setting the starting bid too high, which can discourage potential bidders from even participating. While you may want to get as much money as possible for an item, starting too high can make it less accessible. The solution? Use the 30-50% rule for fair market value to find a sweet spot. That makes the bid feel reasonable while giving your auction room to grow.

Mistake #2: Overpricing less desirable items

Not every item in your auction will be equally attractive to bidders, and that’s okay. However, setting the same starting bid for every item can backfire. Less desirable items—like a niche product or something with limited appeal—should start lower to entice more bidders. Adapt your starting bids to match the expected interest in each item.

Mistake #3: Setting bid increments too high

Setting large bid increments might seem like a way to speed up bidding, but it can actually have the opposite effect. Bidders may hesitate to place a bid if the jump between increments feels too steep. The best solution is to keep increments low, around 5-10% of the starting bid. This approach allows for more frequent bids and keeps the energy high throughout the auction.

Leveraging Silent Auction Pro tools for success

Silent Auction Pro provides a range of tools to help you easily manage your auction, from setting starting bids to tracking progress throughout your event.

Efficient bid management

With Silent Auction Pro, you can easily set and adjust starting bids for individual items or apply changes across multiple items in just a few clicks, even after bidding has started. This flexibility lets you tweak bids on the fly, ensuring that your auction stays competitive. The system also helps you track bid increments, avoiding the common pitfall of setting them too high or too low.

Real-time updates and notifications

One of Silent Auction Pro's standout features is its real-time notifications. Bidders receive outbid alerts via text or email, keeping them engaged without any extra effort on your part. You can also use live leaderboards and progress updates to show everyone how the auction is going, building excitement as the event unfolds. These tools are particularly useful for online and hybrid auctions where it’s easy for bidders to get distracted.

Comprehensive event management

Beyond bidding, Silent Auction Pro helps with the full scope of auction planning. You can create custom landing pages, manage ticket sales, track donations, and generate detailed reports both during and after the event. Whether handling registration or processing payments, the software is designed to simplify the entire process, allowing you to focus on what really matters—raising funds for your cause.

Making the most of your fundraising efforts

Setting the right starting bids is a game-changer when maximizing the success of your silent auction. The key is finding that balance where bidders feel comfortable joining in, but the price has room to grow as the competition heats up. This balance often requires a bit of flexibility. Don’t be afraid to test different strategies depending on the type of event, the audience, or even the items themselves. Each auction is unique, and small adjustments in starting bids or bid increments can lead to significantly higher returns.

It’s also important to track what works and what doesn’t. Pay attention to how your bidders respond to certain starting bids and use that information to fine-tune your approach for future events. Silent Auction Pro’s tools make adjusting starting bids in real time easy, tracking bidding activity, and reviewing detailed reports after the event. You can learn from each auction and continuously improve your fundraising results.

A well-planned strategy is at the heart of every successful auction, and setting the right starting bids is one of the most important pieces of that puzzle. Remember, it’s not about perfection but finding what works best for your event and your audience. With tools like Silent Auction Pro, you can easily adapt your strategy, track results, and make real-time adjustments that keep your auction running smoothly. Whether organizing an auction for the first time or looking to improve an existing event, you have everything you need to set yourself up for success.

If you’re ready to upgrade your fundraising efforts and make the most out of your silent auction, Silent Auction Pro is here to help. Our easy-to-use software and personalized support allow you to manage starting bids, track your auction’s progress, and engage bidders with real-time updates. You can focus on raising money without getting bogged down in the details. Ready to see how it works? Request a free demo today and find out how we can make your next auction a success.