An online auction is essentially a digital silent auction where buyers bid on products and services. With nonprofits, often products and services are donated by businesses, volunteers or the general public who support your cause. The nice thing about running an online auction is that payment and receipting can be easily done for you using software such as ours at Circle Fund. Another great benefit when running online auctions is that they can support and enhance a live event by generating interest and excitement in more popular and expensive items to help drive up donations. Our software also allows you to download product and bid information for printing and taking into a live event. Here are 6 steps to get your auction online quickly;
Step 1: Source Items
This is where you need to leverage local businesses, your board, volunteers, friends and neighbours. Get them to offer up quality items that are at least $100 in value and ideally are new or lightly used. Used items are more difficult to sell, and it’s best to have a policy against items like clothing or bulky low value and heavy items such as washers or furniture. Local artists may offer items, but just be aware that if your audience is small, moving arts and crafts can be difficult since art has a narrow appeal.
If you are a registered non-profit, just be aware that you normally can not offer tax receipts for services, only products. The exception to that rule is if the person who donates a gift card or certificate purchased it from the issuer and then donates it to a registered charity. Once purchased, the gift card or certificate is considered to be property and, if donated to a charity, is eligible for a tax receipt. Also, if the person who performs a service gets paid by the nonprofit, they can then donate the payment back to the registered charity for a tax receipt.
Step 2: Set Pricing Wisely
It’s best to set the starting bid on most items at around not more than 30% of their expected market value. It’s also generally a good idea to set a minimum bid increment of around 5% to 10% of the market value of the item. You really want items to sell, and not have to return them to the donors. Also, the more bidders involved, means more excitement, and also more potential donor leads for follow-up after your auction. In Circle Fund, we allow admins to download a CSV of bidders in the Fundraising / Prospects area of the Dashboard.
Step 3: Show Quality Images and Description
If a picture says a thousand words, in an auction it says a million. Upload at least 3 or 4 high quality images of your item. Ideally use a light or white-background to prevent distraction from your product (most photo editors will have a “magic wand” feature to let you select and delete backgrounds). Research on auctions has proven that interest goes up significantly if 3 or more images are shown, especially from different angles of a product. Be sure also to include a detailed description which notes any use instructions and if it is brand new or used. If your item is used, indicate how many years old it is, make & model number etc so that bidders can google more information. Be sure to also point out the unique benefits of your product or service. Gift certificates from restaurants or local retailers are often popular, and can be eligible for tax receipts, so be sure to indicate any limitations on usage, and an expiry date.
Step 4: Get Bidders Signed Up
Now it’s time to sign up bidders, even ahead of the start of the auction if possible. E-mail out to your board, volunteers and past donors to let them know the timing of the auction. Normally you want to keep the online auction window not more than one to two week to ensure lots of interest is generated and momentum is gained.
Step 5: Accept Payments
When using Circle Fund’s auction service, all winning bidders will receipt an email with a link to pay by credit card. For those who want to pay by cash or cheque and have other pickup or shipping requirements, a contact email, name and phone number wil need to be provided.
Step 6: Follow Up
It’s a good practise to thank your donors and be sure that they received their tax receipts if their items sold. Also Circle Fund makes it easy for you to followup with bidders by syncing with MailChimp or downloading emails and contact information for thanking them for their participation, and even doing a soft upsell to get them to consider a donation.
Circle Fund offers auctions where you can upload your item details, pricing, images and starting bid. You can also select to have a “Buy Now” price set without an auction end-date, so that you can operate an e-commerce enabled store. See the screenshot images below or click here to view a live demo version of an auction page that you can set up.