Options for Sign On parties

Looking for some sage wisdom on a Buy It Now option for a Sign On Party for an elementary school fundraiser.
 
This client has been using Handbid for 2 years, and this next event will be the 3rd year.  They are wondering about a new way to take their sign on parties up a notch.
 
Please let me first explain that all the sign on parties are done on paper. This is a lot of work for the person who in charge of the technology, but it was the 1 component they wanted to preserve from their long-standing event -- since they have made so many other changes (i.e. change of venue, moving the event from Friday to Saturday and adding mobile Bidding). They have 15 different parties; some of them are bid up and some are buy it now. (They know they can create different items for each spot, but they are not sure this is the best option.)
 
Part of the reason for using paper is that some of their top grossing parties are bid up. The most $$ a spot has gone for is $200 and they fight like cats and dogs at the end.
 
The Committee is thinking of offering up 1 or 2 spots for each of the really popular ones as a Buy It Now during the pre-bidding phase.
 
The thought is that they put these spots up for $350 or $400 and see if anyone wants to just swoop it up and not go through the hassle of elbowing everyone on paper.
 
So, my questions are:
 
1. What is Handbid's take on this idea? 
2. If they put it up for $400 and no one buys it, then essentially, are they placing a "value" on the item? BUT, it is HIGHLY convenient to do this, so that is added value, right?
3. If they put 1 spot up for $400 and no one takes it, do they drop it to $350 to see what happens? 
4. If no one buys them, then really they are just back to where they always were.
 
Is there any other theory I am not thinking of?
 
Thanks for your feedback!
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  • Official comment

    Diana, this is a great question and one we often get asked by schools who do signup parties.  

    As you know, in a silent auction, which is considered an open-ascending auction (bids are open and they increase), the convention is one winner. 

    When you have a party where you want the top five (as an example) to win, you run into a few challenges:

    • If each person wins the same prize (a seat at the party), then you run the risk of driving a competition for 5th place.  Sure, some of your "bolder" bidders may not mind being on top, but in a scenario where top 5 win, a larger majority will lurk in 6th and then try to jump into 5th at the last minute. Hardly a strategy for maximizing revenue.

    • Most mobile bidding systems don't do a great job of showing you the leaderboard of who is in the top 5 slots.  Leading your guests to wonder if they are "in" or if they are "out."

    • You could create 5 items, one for each slot, but for a large event, this can be an overwhelming number of items.

    So if creating these auction items are not the best idea, what is?

    You have a few choices but both center around setting the item up as a ForSale item in Handbid. 

    Option 1 - Setup the SIgnup Party at a fixed price with limited quantity of 5 slots 

    Pros - Simple

    Cons - Setting a price that will maximize your revenue can be tricky

    This is easy to do in Handbid. You would create a "ForSale" item and set it to have a limited inventory that was equal to the number of slots you have available. The tricky part will be setting the price.  If you set it too high, you run the risk of not selling all of the slots.  Set it too low and you may leave money on the table. 

    To address these risks, read on for Option 2 (our preferred method). 


    Option 2 - Set up the item as a ForSale item and conduct a "Reverse Auction"

    Pros - Maximizes revenue

    Cons - You have to manage it

    Again, you would setup the item in Handbid just as you would in option 1.  However, you would set the opening price of the item at an aggressive price.  For example, if you would be thrilled to get $200 per sale for $1,000 total, we recommend you start this item (for this option) at $250 or more.  

    Once opened you will conduct a reverse auction.  To do that, you will watch the price and if no one buys at $250, you will lower it by some amount (e.g. $25) and do it again.  So if the item is at $225 now, you wait a bit.  As the price drops, you will attract more and more potential buyers.  At some point, people will start to buy in.  Sure, they could wait, but they run the risk of the item selling out.  

    This is how many reverse auctions work that sell multiples of a single (but scarce) item like frequency spectrum or mineral rights. 

    This method eliminates the risk of leaving money on the table, but it does require a bit of work (but not much).  We feel if you did it this way, you would find your bidders to remain more engaged as well. 

     

    Let us know how it goes! 

     

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