One of the most effective ways to turbo-charge your auction proceeds is to sell a consignment item more than once. This comes about because most consignment items have greater availability than the one unit. For example, if the consignment trip is a trip to Paris, there is no real limit on the number of people that can go on the trip. Even if there are tickets involved like a trip to the Country Music Awards, typically BlueTree can get more than one set. How this is implemented in a charity auction environment to increase fundraising proceeds can be a confusing topic but here is how it works:
A travel experience item has a consignment price of $2,000. During the auction there are three bidders that bid the item up like this:
- Bidder A: $3,800
- Bidder B: $3,900
- Bidder C (the winner): $4,000
So, the winning bidder is Bidder C with the bid of $4,000. In an auction without multiple winners, the winning bid is the only winner and the charity would have a net revenue of $2,000 (the winning bid of $4,000 less the consignment price of $2,000). That is great but there is one issue: there are two other bidders willing to pay $3,900 and $3,800 respectively. They have the potential to provide more funds to organization, and the bidders have an unmet demand to buy what is being auctioned—they want to go on the trip!
What if you did this: Approach Bidder A and ask “are you still interested in the item at $3,800?” If they say yes, ask Bidder B, “would you be interested in the item at $3,800? (which is less than their maximum bid)” Then you would ask Bidder C, “if we reduce your purchase price to $3,800, would you be ok in our offering the item to the other bidders too we can raise more money?”
If Bidder C agrees, then sell the trip to all three bidders for $3,800. Now instead of bringing in $2,000 to your organization for the auctioning of the item once, you are now bringing in 3 x $1,800 or $5,400. This is the advantage of selling an item “multiple times” at a charity auction. Of course, there is no particular reason why we gave an example of the top three bidders. It could have just as easily been the two or four or five bidders. This works just as well in a silent auction or a live auction with an auctioneer.
Here are some considerations for selling something multiple times:
- The winning bid must be sufficiently above the consignment price to make this worthwhile. In the same scenario, if the consignment price is $2,000 and the three final bids are $2,400, $2,300 and $2,200 the difference between having one winning bidder at $400 in profit vs. three bidders at 3 x $200 might not be worth the effort.
- If every item or too many items are offered this way, the bidders will be conditioned to assuming that all items or all items of a certain type will be offered multiple times so there will be less emphasis on winning the auction. People may jockey for third position instead of trying to be the top bidder. This could lead to lower bids. In our experience, only those items bid significantly above their consignment price and those items that are the “signature” items of the auction (the most interesting ones) should be eligible for being sold multiple times.
- When having a live auction, it is a best practice to determine in advance which items and at what final bid must be exceeded for an item to be sold more than once. BlueTree Marketing can help you with this. In fact, quite recently, we were on a conference call between the auction committee, the auctioneer and ourselves strategizing on which items and what target bid levels should be employed for selling items more than once.
Selling items more than once at a charity auction can be a very effective technique to multiply your organization’s fundraising.