How to BIN right.
Harnessing the enduring power of the Buy-It-Now button.
Written by S. Ian Martin, Junior Data Scientist
Silent auctions raise money. Silent auctions that use the Buy-It-Now button, make more money*. There are a lot of reasons for this, with academic names like ‘selection effect”, and the “revenue-equivalence theorem”. But I’m going to skip past all that difficult squeezing and get right to the lemonade. In GiveGrove, we make it easy with a simple toggle called “Set Buyout Price” for your silent auction items. In fundraising lingo, it’s often called a Buy-It-Now (BIN) price, and trust us—it can be a game changer for boosting your auction’s earnings.
Setting a Buy-It-Now (BIN) price works because it creates a sense of urgency among potential bidders who have imperfect information. When we set a BIN price correctly, we translate that sense of urgency into real dollars.
*Caveat: You can BIN wrong: Harnessing the power of the BIN button isn’t simply lighting it up for every item we place on the block. Do that, and you are liable to kneecap your silent auction from the get-go. BIN right however, and you’re very likely to overperform your auction goals. So, below are our do’s and don’t for successful BIN offerings at your next auction.
How to BIN right:
Do:
● Know the fair market value (FMV) of each of your items. This is critical. Your BIN price should be no less than 150% of that number. If you feel that the item is likely to be popular with your donors, consider bumping that number up to as much as 200%.
● Grow a sense of urgency amongst your donors by proactively letting them know ahead of and during your auction that certain items at the auction also have a BIN option available.
Don’t:
● Use the BIN button for items whose FMV you cannot accurately assess. Think
autographed baseball cards and artwork. Avoid the risk of underpricing the item and allow the market to do the work for you.
● Use BIN pricing for marquee items, items that have high emotional appeal, are one-of-a-kind, or have started bidding wars in the past. High value donors don’t like to see a coveted item snatched away by a BIN purchase, and marquee items vanishing before an auction even gets going can short circuit an entire event.
One more thing before I wrap up: Some donors would just rather BIN than bid. Giving your donors more choice when they want to support your org is nearly always a win-win. Consider using GiveGrove’s Buy It Now button during your next auction and see how much more you can raise.
GiveGrove makes events and auctions for fundraising easy. Check us out at GiveGrove.com or email info@givegrove.com for more info. Click here to sign up for our mailing list.
