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

A rowing club auctioned the same donated holiday week two years running. The first year the secretary priced it carefully. The house was worth about 600 euros for the week, so she opened it at 400, which felt like a fair, dignified number that respected the donor. One person bid. It sold for 420.

The second year, with a different volunteer holding the list, the identical week opened at 200. Nine bids. It closed at 780. Nothing about the house had changed. The only thing that changed was where the ladder started.

The one-third rule

Open each lot at roughly a third of its realistic market value. A dinner voucher worth 150 euros opens at 50. A weekend stay worth 600 opens at 200. A crate of beer worth 45 opens at 15. Round to something clean; nobody opens a lot at 47 euros.

"Realistic market value" is doing work in that sentence. It is what a stranger would pay for the thing this month, not the retail price on the box and not what the donor says it is worth. If a restaurant hands you a voucher marked 200 euros for a tasting menu that is quietly available at 140 on a Wednesday, your value is 140 and your opening bid is around 45.

Why a low start ends higher

A lot with no bids repels bidders. People read an empty sheet as either overpriced or unwanted, and they walk past. A low opening almost guarantees a first bid within the first twenty minutes, and the first bid changes the lot completely: now there is social proof, and now there is somebody to beat.

Competition sets the final price, not the opening number. In practice a lot needs somewhere between four and eight bids to reach its value, and each bid has to feel small to the person making it. A lot opening at 50 that attracts seven bids will nearly always beat a lot opening at 120 that attracts one.

There is a second effect that is easy to miss. 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 of the evening. Most people decline quietly rather than argue with a card on a table.

What the donor will say, and what to say back

Somebody will object. Usually it is the donor of the most valuable lot, and usually the objection arrives two days before the evening: opening my 600 euro week at 200 looks like you think it is worth 200.

The honest answer is that the opening bid is not a valuation, it is a starting gun, and that the printed estimated value sitting next to it is the valuation. Show them last year's sheet if you have one. If you do not, offer the compromise that costs you nothing: print "Value: 600 euros" in the same size type as the opening bid. Donors object to looking cheap, not to arithmetic.

The increment ladder

Decide the minimum raise per lot in advance and keep it simple. A ladder that works in most halls: 5 euro steps up to 100, 10 euro steps to 250, 25 euro steps to 1,000, 50 euro steps above that.

Both errors cost money. Increments that are too small turn the closing minutes into a crawl, with two people trading 5 euros at a time on a 900 euro lot while the room loses interest. Increments that are too large push cautious bidders out one step early: someone willing to go to 340 simply stops at 300 because the next rung is 350. If you are unsure, err small in the middle band and large at the top.

When a third is the wrong fraction

• Cash-value items. Gift cards and vouchers with a printed amount rarely pass about 70 per cent of face value, because the room can check in four seconds. Open at a third, expect the ceiling, and do not put three of them next to each other.
• Lots with no market at all. Naming rights, a class artwork at a school auction, the captain's match-worn shirt. There is nothing to take a third of. Open at whatever a casual guest would bid without thinking twice, usually 20 to 50 euros, and let scarcity do the rest.
• Artists' work. An artist selling below their gallery price in public has a problem next month. At art evenings, agree the floor with the artist first, then open a third above that floor rather than a third of the retail price.
• Live lots in a small room. With forty people in front of you, a third of value can be too far down to climb in ninety seconds. Open closer to half and let the auctioneer take bigger steps.

Reserves, and the honest way to use one

A reserve is a hidden minimum below which the lot does not sell. Use one only where a donor genuinely needs it. Set it at the true floor, tell the auctioneer, and still open the bidding at a third of value: the reserve protects the donor, the low opening still recruits bidders.

If bidding stalls under the reserve, say so out loud. "We are close, but this one has a floor and we are not there yet" invites one more raise far more often than silence does. What you must not do is let a lot sit unsold with nobody understanding why.

When the low start still does not work

Occasionally a lot opens at a third and nothing happens for an hour. That is information, not a disaster. Three moves, in order. Walk somebody to it and describe it; roughly a fifth of dead lots are simply lots nobody has read. Then bundle it with a neighbour and reopen at the combined third. Then, if it is still silent forty minutes before the close, sell it flat at the opening price to the first person who wants it and move on. A lot that raises 40 euros beats a lot that raises nothing and sits in a cupboard until March.

Set it once, then leave it alone

Write the estimated value next to every opening bid. Guests bid more confidently when they can see the headroom between where the bidding is and what the thing is worth, and that gap is the only argument the card gets to make.

Set the opening bid and the increment per lot when you build the catalogue, not on the night. How the bidding runs matters here: if the steps are enforced automatically, no volunteer has to police the maths at half past ten with a queue at the bar. Rehearse the ladder by bidding against yourself from two phones before anyone sees it, since what it costs does not change while you test. The organiser's guide has a worked example with real numbers.