Episode 33: Online Auction Basics

Auctions

Sep 12

Online, mobile, or virtual auction. No matter the name, they all mean the same thing; an auction conducted over the Internet where people can bid through a website or mobile device. Not paper sheet bidding.

In this episode I share:

The benefits of an online auction
What to look for in a platform
How to structure your planning timeline for an online auction
Suggestions for dividing the work amongst your auction team
Tips for adding items to your auction site

TRANSCRIPT + LISTENER ACTION ITEM

Today's episode is part two in a five-part series on auctions. If you missed part one, I suggest going back and listening to it. It's called preparing to host an auction. You don't want to skip those very important prep steps.

Today we're going to talk about online auction basics; the benefits of online auctions, what to look for in an auction platform, I'm going to give you some tips for how you can divide up the work amongst your auction committee and explain how your timeline will differ compared to a traditional auction with bid sheets. And finally, I'll walk you through the basics of uploading items to the auction site.

Sometimes auction terminology can be a little confusing, so I want to make sure we're on the same page. An online auction is an auction that is hosted on the internet and is accessed using internet connected devices. That can be a mobile phone, an iPad, or a desktop or a laptop computer. Online auctions can sometimes be called mobile auctions.

The big difference between online and mobile auction platforms is whether they are web-based or app-based. Web-based platforms work through a web browser such as Google Chrome, Safari, or Firefox. App-based platforms run everything through a downloadable app. So, while you can use online and mobile auctions, somewhat interchangeably, if you want to get picky. It's typically an app-based platform that will be called a mobile auction, and an online auction is a more generic term that encompasses all of it. I wouldn't worry too much about what you're calling it, as long as you're looking for the features that you need in the platform, which we're going to talk about in a little bit.

The terms online and mobile auction have pretty much come to mean any auction that doesn't use bid sheets. There are many benefits to hosting an online auction compared to a traditional auction with bid sheets. I'm going to give you the top five benefits.

Top Five Benefits of an Online Auction

1. Reach

The biggest benefit to hosting an online auction is the potential to expand your reach. If your auction is part of a larger event, such as a gala, you're not limited to the people you can fit in a room, those people who want to or can afford to buy the tickets to your event. Galas aren't for everyone, but there are people who may want to support your organization from their couch, in their PJs, rather than getting dressed up and going out.

Even if you're a very localized, small nonprofit, you likely have people outside your immediate area that want to or could support you. An online auction is an easy way for them to do that. All you need to do is send a link to those people. Or, if you really want to expand your reach, you can post the auction link on social media and you've just increased your potential bidding pool exponentially.

2. Money.

With expanded reach comes the potential to raise more funds. It's no guarantee, but the potential is there. Another way that online auctions help you raise more money is outbid notifications. When a bidder gets immediate notification they've been outbid, it increases competitive bidding. On average, online auctions raise 30 to 40% more than paper bidding. If you require credit cards for someone to bid, you don't have to chase people down to pay for their items. You simply run their card at the end of the auction. So, there's fewer lost to sales to people who bid, but don't pay for their item.

3. Guest experience.

If your auction is part of a larger event, such as a gala, guests don't have to stand near an item they want when the auction is about to close, just so that they can pounce on that bid sheet to be the last bidder. They can mingle and enjoy themselves at your event and only worry about the auction if or when they've been outbid.

Guests can also set a max bid for an item. They set a maximum dollar amount that they're willing to pay for that item. If that guest gets outbid, the system will keep bidding for them up to that maximum dollar amount. If the auction site is set up properly, it makes the entire process from start to finish really seamless for guests.

4. Less staffing.

When you host a traditional auction with paper bid sheets, you have to have lots of volunteers or staff on hand to grab those bid sheets right at the close of the auction. I've witnessed many guests quickly add their bids to the sheets after the final call saying that the auction is closed because a staff member or volunteer didn't get to the bid sheet right at the close. It can make for a very tense and uncomfortable situation. You also have to have a lot of staff on hand to answer the question, “Did I win anything?” Over and over and over again. With an online auction, the winning bidder gets notified. So instead of having the 200 people in your venue come up to your auction checkout table to find out if they've won anything, you only have the winners coming up because they know they've won. They got a notification. And again, if you require credit cards, it makes that checkout process so much easier and requires fewer volunteers to staff the checkout table.

5. Data

An online auction platform puts all kinds of data at your fingertips. You don't need to go back through your bid sheets to determine what your most popular items were, who the top bidders were, or what the ratio of your final bids compared to the fair market values were and so on. You should easily be able to determine who your top bidders were and what your most popular items were, so that you know what type of items to solicit for your next auction, and you can invite those top bidders back.

What to look for in an auction platform

There are as many auction platforms as there are budgets from free to thousands of dollars with varying features and benefits.

Some platforms have annual fees and others offer plans where you only pay for the timeframe that you're using the platform. No matter what auction platform you select, here are some things to look for.

1. You want ease of use. You want a platform that's easy to use for both staff and bidders. The site should be easy to set up and navigate on the back end and easy for bidders to bid and use.

You also want to look for an attractive interface. There are some ugly auction platforms out there. You want the photos of your auction items to stand out and be attractive to bidders. Some platforms try to put way too much stuff on a single page, and it gets really cluttered. The more clean the platform interface, and the higher quality the photos that you can put on the platform, the better.

2. Support and reporting. As I mentioned, access to data is one of the key benefits of having an online auction. You want a platform that can give you some basic metrics really easily, with the option to download more detailed reports.

Ideally, you want a platform that works seamlessly with your donor database. If you can't get that, you should at least be able to export a .csv file and upload it to your donor database. Typically, the more expensive the platform, the more help you'll receive setting up the site, maintaining it, and closing out the auction.

You want to make sure that whatever platform you choose has the support level that you need. If you're short on time or staff, it may be more beneficial to pay a little bit more for the platform that has dedicated customer service to help you get it up and running. With that said, there's no platform that's going to do absolutely everything for you.You still need to put in some of the work. And the more you use the platform, the easier it's going to become to navigate and to understand. So whenever possible, give yourself lots of time before the auction to play around with the site and get it set up and ready to go. But make sure that you're getting the support that you need, that you pick a platform that has the support you need.

3. Lastly, number four, you want to look for outbid notifications. I don't know of a single platform that doesn't have outbid notifications, but there's one big difference to watch out for. Some platforms offer text notifications when a user has been outbid. Some only offer email notification.

With email notifications, unless you have your phone set up to alert you when you have a new email, you have to open the email app on your phone and go through your email and check it. With text messages, you just need to look at your phone. It's right there.

I have an Apple watch so, when I get a text, I get a notification on my watch, I get a little buzz. That lets me know I have a text message. I don't have that same type of notification set up for email because my watch would be buzzing all day long. If it's within your budget, I highly recommend getting an auction platform that has text outbid notifications.

Those are the features you should look for in a platform. For your venue. If your online auction is part of a larger event, such as a gala, make sure your venue has fast and reliable internet. They need enough bandwidth to handle the number of guests who are going to be bidding all at the same time, especially at auction close. You may want to rent a dedicated hotspot just for your auction.

Event Planning Timeline for an Online Auction

When planning an online auction, your timeline is going to look a little bit different compared to planning a bid sheet auction. That's because you're going to do a lot of the work upfront, which is going to save you a bunch of time. When it comes to setting up and closing out the auction, you'll want to have a hard deadline for accepting auction donations.

The deadline needs to be one to two weeks prior to the opening of your auction. That gives you time to bundle auction items, as necessary, take photos and upload everything to the auction site.

You can add items as you receive them. However, as I mentioned in episode 32_Preparing to host an auction, you'll likely receive items that aren't suitable as standalone auction items. There will be donations that you'll want to bundle into larger packages.

I find it easiest to set a deadline and do all the bundling and the photo shoot at once. It makes it especially easy if you have a team doing it, which is what I want to talk about next…How to divide up your online auction tasks among your auction team.

Dividing up auction work with your team

An auction, no matter what size is a lot of work. To break things down, it's best to think of your auction tasks in terms of pre-auction, day of the auction, and post auction.

A great way to grow engagement with your organization is to have volunteers work on your auction. It's often a task that many people have either done before or want to do, aside from asking for donations, which I cover in episode 32. And the more people you have working on your auction, the lighter the workload is for everybody.

Pre-auction tasks for your team include asking for donations, again not everybody's favorite. It also includes picking up items, organizing and bundling, categorizing, photo shoot, and uploading items to the auction site. So, as you can see, there's lots to do there that doesn't involve asking for donations.

Day of auction tasks include loading in and setting up your auction, merchandising items to make them appealing to bidders, being available at the event to answer questions about items or answer questions about the bidding software, checkout auction runners, who bring items to the checkout people and closing out and tearing down the auction. Post-event auction tasks are sending thank you letters to donors if you haven't already sent them, getting the items that weren't picked up the night of the event to the winning bidders, whether that's mailing them, delivering them, or arranging with the winning bidder to come and pick up their item. It also involves compiling reports from the auction software and putting that information together for a recap document.

A recap document should be created after every event, whether your auction is part of a larger event, such as a gala, or if it's just a standalone fundraising activity. You should have a recap. The recap highlights what went well, the challenges you faced, and any recommendations for future. It's a way to learn and grow your event. It's all the lessons learned about the event in one concise document. If you need more information about creating a recap document, go to thatsoundslikeaplan.net/episodes/22

Adding items to your auction site

One of the biggest tasks when hosting an online auction is adding the items to your auction site. For lower cost platforms, you're typically entering items one at a time. Some higher end platforms allow you to do a bulk upload from a spreadsheet. The auction platform will typically provide you a spreadsheet template, and as long as the column headers on your spreadsheet match exactly the headers on the template you can bulk upload your items, including photos.

Now, unless you have over a hundred items, adding items can be kind of fun and it's a great task for one or two of your team members. So, you don't really need to do a bulk upload unless you have a particularly large auction.

When adding items to the site, typically you'll add an item name, a description, the fair market value, the starting bid, you'll set the bid increments and a buy it now price. If you're allowing that option. You'll also add a donor name and possibly their logo, if that donor's a business, and then any restrictions for that auction item. Some platforms have a field for restrictions on others you have to be sure to include those restrictions in your item description.

The key when writing and adding descriptions to your auction site is to ensure that the formatting is the same, including the font type and size. It sounds like it's a super picky thing, but I have seen sites where the descriptions have different fonts and sizes and wording, and it just, it looks messy. So make sure you decide on your preferred style in advance.

Setting starting bids, bid increments & buy-it-now pricing

I have a guideline for setting starting bids, bid increments, and buy-it-now pricing. For the starting bid, I typically use 30 to 40% of the fair market value of the item. For bid increments, I use 10% of the fair market value and 150 to 300% of the value of the item for the buy it now price.

For example, for a $100 item the bidding would start at 30 to $40, have a bid increment of $10, and the buy it now price would be anywhere between $150 to $300, depending on how popular the item will be. If it's an extremely popular item, I would not have a buy it now option at all, and just let the bidding go as high as possible.

Most platforms will have the option to list items as “priceless”. I would use this option very sparingly, if at all. A priceless item would be, for example, a pair of sold-out Taylor Swift concert tickets. While those tickets might have a fair market or face value of, say, $500 because the concert is sold out and you likely can't get tickets anywhere, you're going to be able to get far more than $500 for those tickets. In that instance, I'd probably start the bidding at the fair market value of those items and mark the item as priceless.

Please keep in mind that the formulas for coming up with starting bid, bid increments, and buy-it-now pricing are just a guideline. You'll have to use your best judgment and maybe even do some research or talk to other team members when setting those levels.

I want to mention one more thing about setting those values and bid increments. I always use a round number. So if you're taking 10% of an item to get the fair market value, make sure it's an even, round number.

Uploading items to your auction site

When uploading items to your site, you'll obviously need a nice high resolution image like we talked about. Depending on the platform, you can upload one or multiple images.

This is why I recommend doing a photo shoot with all your auction items, so you have all your images in one place and ready to go when you want to upload items to your site. It makes it like an assembly line, right? You can just get into a rhythm and get everything uploaded quickly if you have things where you need them, ready to go at the time.

You'll have to decide in advance if you're going to number your auction items and categorize them. Some platforms have pre-made categories that you can choose from or create your own.

I recommend numbering your items because it leaves less room for error at the end of the auction. For categories you can use your judgment, but numbering, I would say do for sure, because sometimes you're going to have two very similar packages and you want to make sure that the winning bidder is getting the correct package and an easy way to do that is to number your items.

Some platforms will have a field to number your items. With others, you'll have to include the number in the name of your auction item. If it's a large enough auction, 50 or more items, I will use names and categories together.

For instance, Premier Items, which are the most popular ones, I'm going to put those in the 100s. They're going to be numbered 100 to 199. The 200s are going to be food and beverage items. The 300s will be electronics. You get the idea.

Listener Action Item

1. Download my list of auction platforms I recommend for small nonprofits.

2. You also want to start recruiting your auction team, if you haven't already done so. If you already have a couple of people on board, talk them through pre-auction, day of auction and post-auction tasks to see which of those tasks appeal to them, and then recruit team members to fill in the rest.

3. Once you've found a platform that fits your needs, including your budget, start learning how to use that software. You don't want to wait until close to the time of your auction to try to figure out the platform. You want to learn it as much as you can, as early as you can. If you're the chairperson of the auction, I recommend that you are the one to learn that platform. You can ask some of your team members to help you with the software, but there should be one expert on that platform who can then teach the rest of the team how to use it. And I recommend that that expert is the auction chair

Coming up in the rest of the auction series…

Part 3: Day of Auction Details. We talk about preparation for the day of the auction, how to set it up and to create a process for checking out guests easily and seamlessly

Part 4: Post-Auction Duties

Part 5 : Should I have a live auction? I'm going to talk about the purpose of a live auction, how to find items for your live auction, how to work with an auctioneer, and much, much more.

Get started researching, selecting, and learning to use your online auction platform.

Don't forget to share this episode with three of your friends or colleagues in the nonprofit industry.

Now that sounds like a plan. I'll see you next time.