Live Auctions: How To Raise More With Consignment Packages
Hello, my Fabulous Fundraisers!
Have you ever struggled to get a big, sexy item for your auction?
Maybe a glorious VACATION... Or a once-in-a-lifetime experience that everyone can’t HELP but day-dream about…
Well you’re in LUCK, because today, I am going to share exactly How To Secure Trips Of A Lifetime For Your Live Auction.
It’s not as hard as you might think, but it DOES come with a price.
To offer “ Vacations and Experiences-of-a-Lifetime” for your auction, the first thing I always recommend is to reach out to your donor base and ask what kind of trips or experiences they might be able to donate.
If they happen to have an amazing trip and are willing to donate it... graciously accept, thank them for such a wonderful gift to your organization, and then move on to your next item.
BUT... if you’re having trouble finding the perfect getaway package, there is another way...through CONSIGNMENTS.
As a nonprofit conducting a benefit auction, you can reserve a consignment vacation package for a discounted price to include in your auction, AND you only have to pay IF the package sells on auction night.
Consignment companies are great about letting you sell the package, often MULTIPLE times, and only once it has sold THEN you pay the negotiated rate per package.
If it DOESN’T sell at your event, you’re NOT on the hook.
Now, you DO need to select your consignment packages WISELY so you’re not sacrificing any coveted Live Auction slots and thereby wasting an opportunity to make BIGGER money with alternate items that are more attractive to your audience.
When selecting a consignment package, never forget to take a look at the RESERVE PRICE.
That’s the discounted cost that the non-profit will have to PAY to the consignment company, compared to the ACTUAL value of the package.
We want YOU, the organization, to take home the lion’s share of the profit, knowing it will likely sell for OVER its value.
Let’s say you select a trip to Bali valued at $3,000 with a RESERVE of $1,600.
If sold AT VALUE, the non-profit, would make $1,400, which is great as it’s almost an even split.
And if your bidder is REALLY excited and bids even HIGHER, say $4,000, you end up making $2,400, thanks to the base RESERVE of $1,600.
Make sure that when you list a consignment donation in your catalog, DO NOT list it as “Donated By” as this is NOT a donation made free and clear.
I prefer to use the phrase, “Made Affordable By” and then list the company. This signals to your donors that only a portion of the full sale will be going directly to the non-profit.
I recently had a client sell 4 trips to Italy at $6,000 a piece AND had another trip that was selected for the Golden Ticket.
Because the high bidders were so COMPETITIVE, not only did they cover the cost for the Golden Ticket Trip, they made an astonishing $14,000 that they wouldn’t have made otherwise, and it was the consignment packages that took them up and over their fundraising goals for the evening.
For each package you sell that has a reserve, the GOAL is to choose items that let your organization take home THE LION’S SHARE.
If you sell an item where the reserve is LOWER and the bids are HIGHER, you could turn a nice profit.
Choose an item with a reserve that is HIGHER and bids that are LOWER, and your margin will end up being a poor investment.
This kind of low-margin bidding can also really slow down your momentum on event night.
How do you find the SWEET SPOT with an appropriate Reserve-to-Profit ratio?
First, (unless it’s your inaugural event) take a close look at your bidders’ history to see how similar items have sold in the past.
Once you identify the high range for, say, vacation packages in previous years, you should choose a consignment package where your organization will make the LION’S SHARE of the profit.
If you aren’t likely to make more profit than the consignment company, this is not a good fit for your auction and should be skipped.
A common question I hear is: Will packages with reserves siphon money away from our Special Appeal?
In my experience, many people who come to an auction and competitively bid in the live portion are usually vying for the chance to take an item HOME.
They MAY be willing to spend MUCH more money to get an incredible, once-in-a-lifetime trip, bidding the package up and over the value…
But just because they really want an incredible vacation and don’t get it, doesn’t mean they’ll give you as much in the Special Appeal as they would have spent on a TRIP.
If they were willing to bid $10,000 for a trip to London but aren’t the winning bidder, DO NOT expect them to give you a $10,000 appeal gift.
In general, when compared to their highest bid on a package, folks can be expected to give 10% OR LESS for their appeal gift.
If you ask me, I say get that big, sexy consignment package WITH the reserve, because even though you’ll pay a percentage back to the consignment company, they’re making this item super affordable so you can still maximize your revenue.
It’s always true, you have to spend money to make money... so choose one or MAYBE two consignment packages in your auction and see how it works with your audience.
And make sure the rest of your items are 100% free of RESERVES.
Are you ready to start shopping amazing vacations for your next fundraiser?
There are many great companies who offer consignment packages, and we’ve put links in the description below to several of our favorite consignment partners.
So start filling your shopping cart with spectacular vacations and packages, and be sure to tell them Kelly Russell sent you!