We run an online auction annually, and the first two years, we set the starting bids at 25% of the value of the item. However, last year we started all items at $1. (Even the stuff that was worth over $1,000!) Let me tell you, it got us a HUGE amount of attention and interest!! We did better last year than we had in any previous year, so I'm keeping that up going forward. It got people talking, I would hear people in the hallways and cubicles saying "oh my god, i'm getting an iPad for $10!" Lol, even though there were 10 days left on the auction, it still got people interested and bidding.
I got the idea because it's a common strategy with eBay auctions - start the bid really crazy low to get people bidding.
I like to set an item at a third of the 'price' or value. You don't want to set it too low but you also run a risk of setting it too high - it discourages multiple bids or participants (more people looking generates more interest). Generally more bids drives up an item to the higher price anyway.
We set minimum bids at 40% unless we think the value is out of line (high or low). I emphasize with my team that we don't want people to get a great deal - it's a fundraiser. I figure if they pay full price, they still are getting a discount because they are not paying tax.
We incent people to pay full price with separate prizes. If an item makes full value or more, then the winning bidder's name goes into a drawing for the supplemental prizes.
Be careful when you talk about people getting a deal. You're not holding a garage sale and you don't want them to start thinking that way, because it takes years to change that perception. We know that from painful experience at our school.
How do you go about setting starting bids? I don't want to give things away buy want people to get a deal since most of what we got was free. 25% of the value? 50%
