Auctions are an important fundraising tool for nonprofits and small businesses of all shapes and sizes. Silent and live auctions have become a mainstream channel for nonprofits and small businesses to meeting their funding goals. Small businesses throughout the country who traditionally used these fundraising events were challenged by the COVID-19 pandemic. These campaigns typically help fund programs that take place throughout the year. With the cancellation of in-person events, many businesses and nonprofits pivoted and took these auctions online. However, running an online auction isn’t the same as an in-person event. If you’re making the switch to online auctions, read on to find out how to start, set up, and run one in 10 steps.
What is an Online Auction?
An online auction is one that happens on the Internet. These virtual auctions have sellers that sell a product or service to buyers who bid the highest price.
The best-known example of an online auction is eBay. The website is a virtual auction marketplace that brings together buyers and sellers from around the world. It’s among the most trafficked sites on the Internet.
The success of the eBay model is proof that online auctions can also be effective for nonprofits and small businesses. All you need to know is how to set up an online auction yourself. This may seem scarier than it is. However, there are online auction software out there that can help you do this.
Why setting up an online auction can bring in new leads
Live and silent auctions have been the bread and butter of traditional fundraising for nonprofits and small businesses. But online auctions open up another opportunity for nonprofits to meet their fundraising goals. It’s not just an alternative to in-person events due to unforeseen events like the COVID-19 pandemic.
One of the key benefits of setting up an online auction is that you have a wider reach of participants. Starting an online auction allows anyone who is inside or outside of your target community to make bids.
That means that bidders who live in different cities, states, or even countries can participate. This allows you to reach people who would otherwise be unlikely to attend due to geographic constraints.
Social media, digital marketing, and PR efforts can be expanded to cast a wider net of potential participants. With more people bidding, there is a greater chance of more items being sold and at higher prices due to competition.
How to Set Up an Online Auction
If you’re ready to set up and start hosting your first online auction, it can be intimidating to make the transition from in-person events. Follow these steps below to learn how to do an online auction fundraiser and you’ll be glad you made the shift.
1. Choose how you’ll host your online auction
The first thing you’ll have to decide when you decide to host a virtual auction is how you’ll do it. Use an auction management platform that will help you host your event, whether it’s in-person, virtual, or hybrid.
For an online auction, you’ll need a platform that can set up an auction website, post items online, enable mobile bidding, accept electronic payments, and direct donations. This auction software must be very secure since it handles sensitive information.
2. Check your inventory
The next step is to review all the items that you want to include in the online auction. Take inventory of all items. If you have certain experiences such as travel that aren’t currently available due to the pandemic, you may hold those items to use for an event later in the year or use it in the following year.
3. Set starting bid amounts
Now that you have determined what items you wish to sell for the online auction, you can start pricing them. With virtual auctions, you’ll generally want to set the starting bid at 35 percent of its value.
Ideally, you’ll want to get between 80 and 100 percent of the market value of each item. You should expect to receive anywhere from 12 to 16 bids for each time.
So if you have an item that has a market value of $100, you’d probably start the bid at $35. Incremental bids could be set at $5. Then, for example, if you receive 16 bids for the item, you will reach $115.
4. Use clear photos
Pictures are worth a thousand words. When you’re running an online auction, images are even more important. Keep in mind that your bidders will be looking at your items on their tablets, phone, laptop, etc.
Have at least three images for every item. Use stock photos that relate directly to the time or logos when an image isn’t available.
Your images should be in the appropriate setting and have good lighting. Be sure to capture anything that’s special about the item in an image when it’s applicable too.
5. Determine the rules of your event
An online auction opens the door to more questions from online bidders in terms of how they can secure their items and what shipping looks like. Make sure that you have set clear guidelines around these situations so that it’s clear how winners can take possession of their items.
6. Begin promoting your online auction
When you’re hosting an online auction, communication is key. Use your available digital channels like email and social media to promote your event.
Leverage key milestones like when you have finished posting your items online to promote the event and tease potential bidders about what’s going to become available.
7. Consider extending the auction
With an online auction, you’re not restricted to holding your event for a few hours on a certain day. So you can take advantage of this opportunity to hold a longer event and open your auction for several days. This also gives you the opportunity to promote your event through social media posts and emails for a longer time period.
8. Keep bidders engaged
Your bidder’s attention can be drawn away from you more easily online. So you must work a little harder to hold their interest. Consider doing special promotions like giving away certain items to anyone that shares a picture with a certain hashtag on social media.
9. Add an option for direct donations
Asking for donations as a non-profit is a must in every situation. Online auctions are no exception. Set up an item in your auction or dedicate a category of donation items that your organization needs to further its purpose.
Make every ask for donations, compelling and clear. For example, sharing a story or video that shows ways that they can support the cause will show each donor that there are ways they can still help.
10. Begin planning your next online auction!
Now you know where to start with your online auction. Once you’ve gotten your first one out of the way, you’ll have a better idea of how to run your next one. So take all the lessons you learn and get ready to apply them to your next online fundraising event!
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