What should auctioneers know as the key distinguishing factors between a for-profit or a commercial auction and a nonprofit or a benefit auction? There are three key components that are different. One is the purpose of the auction. Two is the motivation of the buyer. Three is the style of the auction.
Let’s look first at the types of auctions in commercial auctions and compare them with the types of auctions for benefit auctions. Look at the myriad of commercial auction opportunities. There are art auctions, antiques and collectables, real estate – commercial and residential, industrial, manufacturing, and heavy equipment auctions, coins and stamps, industrial property, automobiles, motorcycles, agriculture, livestock and ranch, firearms, bankruptcy, business surplus and liquidations. Those are just a few of the specialties in commercial auctions.
Now you can look at some of the specialties in benefit auctions including animal causes, arts and culture, education, environmental causes, healthcare auctions, hospital auctions, human and social services, groups that serve people with disabilities, international and foreign affairs, professional societies and trade associations, public and societal benefit auctions, religious and faith based, and sports and recreation groups. There are so many specialties within our wonderful industry of auctions.
Let’s go back and look at those main purposes. The main difference is the purpose of the auction. In a commercial auction we are selling, marketing, and promoting goods to buyers who are motivated to purchase at the best price. In a benefit auction the goal is to raise as much money as possible and there are some side benefits to create awareness of the cause, to have fun, create a social event for major donors, and to cultivate guests to involve them in long-term giving. Those are two differences. The purpose and motivation of the buyer.
When you look at the motivation of the buyer at a benefit auction it is to support the organization financially. At a commercial auction a buyer wants to get the most they can for the least amount of money. The job of a benefit auctioneer at a charity auction is to get the buyer to spend the most money to support the organization and feel great about it.
The third difference is the style. This is where it is critical for auctioneers who are moving into the benefit auction realm to know that there is a difference in the benefit auction chant. For example, in terms of speed, the pace of the benefit auction is about two minutes an item. However, in a commercial auction you can sell 100 to 150 lots per hour. The other interesting piece about a benefit auction is that the pre-auction consulting and pre-auction planning plays a critical role in how much funds you can raise and this is actually a whole industry in specialization within the benefit auction field. So those are the three main differences: the purpose, the motivation of the buyer, and the style of the auction.