How to set starting bids at a charity auction: the one-third rule

The single most common pricing mistake at volunteer auctions is starting bids too high. It feels respectful to the donor to open a 300 euro voucher at 250. In practice it kills the lot. Here is the rule that works, and why.

The one-third rule

Open each lot at roughly one third of its realistic market value. A dinner voucher worth 150 euros opens at 50. A weekend stay worth 600 opens at 200. A signed shirt with no clear market value opens wherever a casual guest would bid without thinking twice.

Why low starts raise more

An auction lot with zero bids repels bidders. People read an empty lot as either overpriced or unwanted, and they walk past it. A low start almost guarantees an early first bid, and the first bid changes everything: now the lot has social proof, and now there is an owner to outbid. Competition, not the opening price, is what sets the final price. A lot that opens at 50 and gets six bids will nearly always beat a lot that opens at 120 and gets one.

There is also a psychological cost to high openings. Guests at a fundraiser want to feel generous, not cornered. An opening bid that already equals full retail asks them to overpay as their very first act. Most decline quietly.

Set the increments too

Decide minimum raise steps in advance, per lot, and keep them simple. A workable ladder: 5 euro steps up to 100, 10 euro steps to 250, 25 euro steps above that. Increments that are too small make the closing minutes chaotic; too large and cautious bidders drop out one step early.

When to use a reserve

A reserve is a hidden minimum below which the lot will not sell. Use one only when a donor genuinely requires it, for instance an artist who cannot let a piece go under a certain price for professional reasons. Set it at the true floor, tell the auctioneer, and still open the bidding at one third of value. If bidding stalls under the reserve, the auctioneer can say so honestly and invite one more raise.

Three practical exceptions

• Unique emotional lots, like the captain's match-worn shirt at a club, can open even lower. Scarcity will do the work.
• Priceless experiences, like naming rights or a child's class artwork at a school auction, have no market value. Open low and let the room decide.
• Cash-value items like gift cards rarely exceed face value. Open at one third and accept that the ceiling is close to face value.

Write the values down

Next to each starting bid, note the estimated value on the lot description. Guests bid more confidently when they can see the headroom between the current bid and what the thing is worth.

If you use auctiontool.ai for the bidding, you set the starting bid and increment per lot once, and guests' phones enforce them automatically, so nobody has to police the maths on the night. The organiser guide includes a worked pricing example.