Did you attend my teleclass on Best Practices in Mobile Bidding for your Silent Auction?
If so, you already heard one of my issues with some online auction and handheld bidding vendors (a variation is also called mobile bidding or electronic bidding).
It comes down to functionality.
I’m a fan of a feature called “extended bidding” which — as I type this — few vendors seem to offer in online auction or handheld bidding products.
What is extended bidding?
If a bid is placed on an item in the final minutes (for sake of example, let’s say five minutes) of the auction, the bidding on that item will be extended for an additional five minutes. Bidding concludes when no new bid has been placed within a five minute time frame.
Other items in the auction will close as advertised, but the most heavily contested items will continue to accept bids, pushing the sale price higher and higher.
In contrast, some nonprofit auction vendors run their bidding platforms similar to online sites like eBay. If an auction is scheduled to end at 8 PM, it ends at 8 PM. Bidders place their bids, hoping to be the last bid accepted by the system before the auction closes at 8 PM.
But that’s not really an auction. It’s a game about timing, which rewards the last bidder before a specific cut-off time. Even though the runner-up bidder might have bid again, the system doesn’t allow extensions.
In contrast, a true auction encourages bidders to bid back-and-forth, increasing the bid until only one is willing to pay the price.
Some items in a nonprofit auction will always draw last minute bids. It might be a reserved parking space on the school’s campus, an exceptional wine lot, or a heavenly trip. If you could extend the bidding on those popular items, you could raise a few hundred to a few thousand dollars more.
How do I know? Because we see this often happen in our traditional “manual” silent auction closings.
In short, if you’re going to use technology, use the system that ensures you’ll raise the most. Find a vendor that includes extended bidding as part of its offering.
P.S. Extended bidding was one of many concepts taught in the Best Practices in Mobile Bidding for Nonprofit Silent Auction teleclass.
Did you miss it?
Learn of new ones by joining my newsletter list here.
Excellent feedback, excellent idea.
I believe that there is no need to extend the bidding if you have a max bid feature. No matter when the bid ends, the person willing to make the highest bid will win the item! Another issue with online auctions is that for small organizations, it is a hardship to pay money upfront to register and begin the auction. Fortunately, we have an auction site that allows any organization to get their auctions online and run them without any upfront costs.
Robyn, you are right in that a maximum bid feature is useful. It’s a useful bidder tool, but not necessarily a useful charity tool. Let me explain why by offering some insight about how live auctions work.
In a live auction, it’s not unusual for a bidder to bid *above* their intended maximum bid. Keep in mind that a live auction bidder doesn’t record his maximum bid anywhere. It’s just a number he has set in his mind. Yet it’s not uncommon for a bidder to approach me after the auction to say, “I paid more than I planned to pay for that trip.” (In other words, he paid more than his planned maximum bid.)
Why do these bidders bid over their planned budget?
Because reason flies out the window in the heat of the moment.
If I offered max bid options in a live auction, it would kill bidding. It would automatically force my bidder to stick to his intended budget.
That’s great for him; bad for the charity.
The best scenario is to offer BOTH max bidding (as a convenience to the bidder) AND extended bidding (to help the charity).
Let’s assume Bidder #25 puts a max bid of $1000 on an item … maybe a surfboard. Meanwhile, Bidder #43 puts a max bid of $1100 on the surfboard.
If extended bidding is offered, at 8 PM when the auction is scheduled to close, Bidder #25 would receive an alert. He’d be told that his max bid has been reached, he’s NOT the high bidder, the high bid is now $1100, and he has 5 more minutes to bid on this item because bidding has been extended to allow him time to reconsider his previous max bid.
In this situation, don’t be surprised when Bidder #25 overrides his previous max bid … and bids again.
Think about it … before bidding started, his max bid was $1000. NOW, he’s prepared to bid more. It’s auction fever!
So although max bid is a nice tool, it doesn’t replace extended bidding. They are different tools for different problems.
In the beginning, we had the same point of view as Robyn. If everyone had entered their max bid, there would be no need for extended bidding. However, practice trumps theory. What we have observed is exactly what Sherry describes: people up their “max” at the end when they find themselves outbid. Perhaps its the alcohol or competition that pushes logic out the window; or, perhaps they never put in their max in the first place. Regardless, extended bidding is needed to address the issue. So, we were wrong and added the feature. We write about that experience here in our latest blog post – give it a read!
http://blog.handbid.com/handbid-now-has-extended-bidding-there-happy
Thanks for the insight, Jeff! Interesting to watch how bidder psychology plays out, isn’t it?
It is interesting, fun, and essential. We are very curious to see how extended bidding plays out in future handbid auctions.