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Charity Auction Success - The Importance of Setting the Right Price

Auctions are excellent tools for diversifying funding streams for nonprofit development professionals. The emergence of ubiquitous online access have made online auctions an excellent vehicle for nonprofits and charities to raise funds while engaging stakeholders and other consituencies in their causes. eBay, the leader platform for online auctions also provides a number of offerings for running nonprofit auctions. Running a charity auction on eBay is simple, but getting the most from your efforts involves developing a strategy and understanding the ins and outs of eBay. Luckily eBay provides lots of information on how to be successful using their services.


One of the critical factors in a successful auction is setting the right starting price.

Many new sellers don't realize how important pricing is when it comes to eBay auctions. Many don't even realize that pricing needs to be done. eBay is an auction site after all! But eBay auctions are not quite the same as the auctions you attend in the offline world. In fact, quite a bit of work goes into determining and setting prices.


Essentially, there are only three prices that can be set for an eBay auction: the "buy it now" price, the reserve price, and the starting bid price. Of these three, the starting bid price is the only one that is required for an eBay auction. The reserve price and the buy it now price are optional. The starting bid price is fairly simple - never set it higher than or so - no matter what your item is really worth. This low opening price will get bidders to your auction.


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In addition to eBay, other vendors offer vehicles for nonprofits to run fundraising auctions. CMarket - www.cmarket.com offers services emphasizing the importance of bidders, donors and sponsors, and their respective roles in a successful auction. Their Website is a valuable source of fundraising auction tips.


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Setting low starting bid prices creates the need for a reserve price. A reserve price is the absolute lowest price that you want to get for your item. You may sell the item below the reserve price, but you will not be required to. In other words, if you set your reserve price at 0, and your highest bid is only , you do not have to sell the item to the highest bidder. You can close the auction without any negative feedback or repercussions. Set your reserve price at the absolute lowest price you are willing to sell your item for. Keep what the item is worth, as well as what it cost you in mind.


The buy it now option will allow you to set a price, and buyers can buy the item immediately, without bidding, for that set price. This option can be used for any type of item, and it should be set to match your reserve, give or take a few dollars. This option is great if you have multiple identical items to sell.


Shipping has a price, and potential buyers take this into consideration when they are looking at an auction. If you can see your way clear to offer free shipping, you will find that people are placing more bids. Make sure that your potential buyers realize that you are offering free shipping!


Before setting any prices, you need to determine what the item is really worth. The value of the item in different markets might be quite high. However, you are selling on eBay, and it is a different world altogether! Find out the price that similar items soldfor on eBay before setting any prices. If it is a collectable, or a high ticket item, have the item evaluated to ensure that you aren't going to lose money!


About the Author: Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits a site on Fundraising Auction Tips and also edits HandsNet - a Human Services News site.




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