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We thought that now we are in the run up to the Christmas fundraising season that it would be worth looking at the benefits of running an online auction solution to preview the lots you have on sale at the ball or event.

The benefits of auction previews.

It’s worth considering some of these key benefits when you are weighing up the marketing of the event to your core following:

1. It provides a central point of marketing for the lots on sale
2. It gives bidders time to understand what is for sale and increases their engagement with the sale items
3. It increases competition in the items for sale as more people can make a purchasing choice earlier in the cycle rather than just on the night
4. Auction theory suggests that the more information you provide a bidder the more likely they to want to bid on that item. A website provides you with more scope that say a printed catalogue.
5. You are able to provide up to date detailed information about the lots which encourages stronger bidding for the items as bidders are comfortable with what is for sale. They will make an early emotional bond with the items and become more motivated to win the item
6. Potential bidders can pass on the lot details to other people and therefore promote the event and the items to a wider field. Therefore bidders can help promote your site to others

We have run a few of these this year already and already have some lined up for auction in November and in to the New Year.

• Magic of Persia – an art auction fundraising auction preview site
• National Trust for Scotland – the President’s Ball auction preview

As you can see from the above there are benefits to running this kind of solution for you event and we enable you to keep your donators up to date with the items for sale on the night.

As we have started to roll out our auction platform for use in a range of different use we have put together some useful documents to help fundraisers run the auction previews more smoothly. We also thought it would be useful to publish them here as it should help people get a better idea of what our charity preview auctions package can offer. We are finding that quite often fundraising teams are coming to us to help them provide an auction preview prior to a fundraising event, such as  a live auction or as a part of a silent auction.

Uploading lots to the auction system

The first thing people always want to know is, “how can they add lots to the system?” This document, Uploading lots to our auction system, explains the process in detail, from logging in to the site, finding the admin system and then locating the lot management page. From there the document goes on to explain how to add pictures & descriptions for the lots, along with explaining how to deal with common auction related items such as reserves, opening bids and increments.

Managing the end of an auction preview

Once the auction or auction preview draws to a close it is important to be on top of who is winning. The Auction Preview Checklist provides a rundown on the following:

• how to find the winning bidders and export them to the an Excel spreadsheet for later use at the event – often these are given to the event co-ordinator or the auctioneer themselves.
• work out if there are any maximum bids that needs to be carried over to the room at the event.
• Get hold of any pledges made to the charity during the course of the preview.
• how to locate and download the bidders to so that you can stay in touch with these bidders after the auction has finished.
• Tracking your website activity through Google Analytics.

Hopefully you will find these documents useful in understanding how to mange both the start and end of an fundraising preview. By providing these sites as part of an overall fundraising event it provides event organisers with a central marketing point for the lots and it gives bidders some detailed background about the items for sale on the night.

One of the things clients ask us when they are considering using our auction software, is how are they going to integrate their existing website with our auction platform. Matching the branding is something we have been able to do from the start, so we have been putting some thoughts together on how to further integrate with external sites. Typically this is done by providing something called an API – which is basically a two way feed. Most web developers know how to work with these so it means we can work with them to provide you with a fully integrated solution.

The following summarizes what our feed will give you:

• Provide a feed (GET) of lots from our auction platform to your existing website
• Provide a means with which your own website can send (POST) items for sale to your new auction website
• Provide remote updates (PUT) of lots for sale from your website
• Provide for the deletion (DELETE) of the lots from a remote website
• Provide a single sign-on for both sites

One simple way to use this to provides a list of lots to your website giving your web developers the information they need to display your lots, on our system, on your website. This is something we have done on the British Airways Highlife magazine postcard auction website.

We have also taken this a step further a provided a way to remotely add and update lots on our auction system from a clients own website. So, say for example one of our clients has a existing database of items for sale on their website, there is no point in manually duplicating this list on our platform as well. So what happens is, the the existing site can be modified to send over sale items to our auction platform so that users can bid on them there.

If updates need to be made then they can be made as well. Often third party site have an existing product admin screen and it makes sense to provide one place for them to be managed. We can integrate with that as well.

This is great, but it gets really interesting when you start to think of other possibilities. From there it means it is easier to then integrate the auction system with desktop or mobile apps for the iPhone, iPad or Android phones. This means that potentially auction management software in an auctioneer’s office can be adapted to send and manage lots on our auction platform, thus streamlining the sales and marketing process.

By making use of these advanced features along with providing a single sign-on for users,  it means your existing website can be fully integrated with our auction platform. This provides a seamless experience for bidders and negates any worries your may have about running many different website.

We’ve worked with Cedar Communications and British Airways to help them revive the use of the holiday Postcard with the creation of their Postcard auction charity website as a part of their Save the Postcard Campaign.

The auction has been set up to raise funds for Comic Relief whilst reminding people of alternative ways of staying in touch with their friends and family whilst away on holiday.

The auction features postcards designed by many celebrities including Tracey Emin and child writer Axel Scheffler.

There are 40 lots for sale on the auction site and whilst these exist on our specially branded auction platform we have hooked up a feed of lots that are being displayed on a specially designed landing page on the BAHighlife magazine website. These means the current bidding for the entire auction is available on the main website. The bidders can them seamlessly bid on the items on on the auction site itself, which has been branded to match the overall British Airways Highlife branding.

One of the current trend on the auction sector has been the emergence of penny auction websites. These are mostly consumer facing websites offering the consumer a chance to buy retail goods at knockdown prices.

On the face of it this looks like a good way for the consumer to get ‘one over’ on the retailers. Especially in current economic times. Customers of the world unite!  Many items are sold below retail for a few pennies or a few pounds. The user takes part by first purchasing blocks of bids which can be used at will. Typically bids are purchased for around $1.00 each in a blocks of 30 upwards. Everytime a bid is made the sale price increases by a peppercorn amount $0.15 or similar value (hence the name penny auction) and the auction is extended by 30 or 40 seconds.

Certainly investors have seen an opportunity. Swoopo attracted $10m in venture capital funding during April 2009. There is no dispute, from the investor point of view, this is a cash cow. For every item sold below retail value, the auctioneer is making many times the retail price through selling the right to bid on that item.

It’s genius. Everyone’s a winner, surely? The consumer buys an item for pennies and the auction site pays for the lots through the sale of the bids themselves. In some cases the auction sites openly declare they do not hold the item in stock. The perfect business model. 

However, scratch the surface and different picture emerges. The consumer has complete control over what they spend and they are free to bid when they want, if at all. They don’t have to bid more than once if they don’t want to. The problem is once the user has purchased bids they are committed. Once they have bid and then been outbid they are further committed. In the traditional forward auction the bidder can speculate on items at no financial cost, whilst making no commitment to purchase unless they are highest bidder. A fair deal. In the penny auction, the user has given over to more than idle speculation to take part. The more they bid, the more the user invests and the more they want to see a return on their investment.

This is of course the key to the success of this business model. As bidding progresses the more the bidder will want to win. As the current bid, along with the cost of bidding approaches the retail value of the item, the need to win will become more urgent. It is something of a vicious circle and there can only be one winner.

This feature is something that has pricked the attention of the gambling experts, at Nottingham Trent University who suggests penny auctions should come under the control of the gambling commission. One analyst suggests it is only a matter of time before action will need to be taken. The risk to the shopper has not gone unnoticed in other sectors of the media and consumers have also started to see the risk of taking part in these auctions. Analysts and consumer groups have also taken time to demonstrate why the consumers are not necessarily getting the bargain they sought. 

Perhaps we are being unfair. The assertion by penny auction site MadBid.com is that, “This is definitely a game of skill, and would not fall under any circumstances under the definition of gambling.” This is true of course. Randomness is being created by the other users on the site and there is no reason, especially in the case of a low interest auction, that there may only be one bidder completely able to take his moment and pick up a bargain. The bidder has to make a judgement and time his bid at the right moment. 

This whole model has caused much discussion internally. One of the main issues we have is that of user experience. To us it seems less than transparent for the user. We are always particularly careful to make sure the user has a good experience on our (auction) websites. We work with not-for-profit and fundraising companies, as well as in the private sector. Our clients are able to generate revenue through an easy to use site attracting many bidders whilst bidders are able to compete on a level playing field. There is an implicit trust between buyer and seller. The platform needs to convey that trust. 

Penny auctions to us, appear to be heavily loaded in favour of the seller. Whilst commercial enterprise exists to generate profit, it has to be an equitable deal for the consumer too.