The Penny Auction

We would just like to announce that we will soon be releasing a very valuable resource to all those interested in penny auctions online. This will take the form of a substantial e-book with strategies and tips! This great package will provide you with easy access to all the information you need to make good bidding choices when using penny auction websites.

These guides will be available for a low fee - to reflect the amount of work that has gone into them! We also hope to setup an affiliate program for them, allowing all of those interested in the subject to both help others gain knowledge and also help themselves!

More information to follow in the next few days!

written by admin

Contrary to popular belief, it is most likely that each auction is not a ‘gamble’ for the website. Whilst they may ‘lose money’ on some, this is not actually where most of their profit is made. Instead of examining the number of bids placed on a single item, people should instead examine the way bids are pre-sold on penny auction websites.

Thats right, penny auctions already have your money. However, it must be noted that this is assuming that most are bought before hand rather than placed one at a time. This pre-buying of bids is much more widespread due to a number of factors. A) On some sites, it is the only way to get bids - for example in a minimum pack of 10. B) Buying bids for use in auctions in this way allows for bulk discounts and so makes it ‘cheaper’ for most users on the site. With each bid now potentially costing around 75p instead of £1.50 or there abouts.

Therefore, the penny auction websites already know how much money they have; that vast majority of bids have already been placed as such before an item is actually bid on. In many ways it can just be seen as users apportioning their ‘points’ onto different auctions as they see fit. To this end, the penny auction website operators should always be able to keep afloat as they already know how much money they have, the average ‘extra’ that will be spent by single bidders at the maximum rate without buying a bid pack (if the website allows it) and therefore the % they need to spend on products to make their site look glamourous with desirable high end goods, and still retain a healthy profit margin and bottom line.

We hope this has helped people to understand how these sites actually make money, rather than thinking that these sites ‘gamble’ on a having a few good auctions! Keep reading for more great information and further posts about how to beat the competition on penny auctions and actually get some good deals online!

written by admin \\ tags: bid packs, gamble, penny auctions

A common question seems to be popping up on blogs and forums all over the net concerning penny auctions. Are they a scam?

The short answer. No. - Well I am sure some are, but thats the same for all types of web business, however, the main penny auction websites are probably not scams.

Is penny auction gambling? Again, not really. If you consider these types of systems gambling, then you may as well consider all types of auctions gambling. After all, you don’t know much about the other people bidding, how much they are will to bid / spend to get the item or whether the bid you put in will be the final / highest. Real world auctions are even more like penny auctions -as the ‘timer’ as such is reset each time a bid is placed. This is much like an auctioneer shouting for more bids - the ‘waiting for last bids’ timer can also be seen as the auctioneer shouting ‘going, going, gone’ before selling the item.

Another way in which penny auctions are actually similar to real auctions - but still an area people are concerned over is that of previous bid history. In a real world environment, it is very unlikely that you will no *anything* about the other bidders looking to buy the item. If you walk in half way through, you will also not know the entire bid history for that particular item. In many respects, it is actually easier to get data on other users / competition when using a website. Just note down the usernames / times / prices for each item etc. Why are people complaining? Because this is a lot of effort. Simple. Yes, you would have to work at it, and do a significant amount of data analysis to get suitable material, however it can certainly be worth it.

In essence, you will get the most out of penny auction style websites if you treat it professionally, develop a game plan and do a significant amount of research into the other bidders. Also, remember to keep reading for our next article about a common misconception of where these sites actually make their money and how the whole ’selling bids’ idea really works!

written by admin

Different types of auction user.

So, you’re ready to enter the world of online penny auctions? At least you think you are.  To make sure you are as prepared as possible (also for a bit of fun), take a look at these penny auction (and normal auction) bidder profiles - see what personality type you match up with the most!

The amateur
Yawn… a noobie to the world of online penny auctions, the amateur bidder doesn’t really pay a great deal of attention to the auction, his or her opponents, the item, time, bid history etc etc.  In short, this is where a lot of people start out in their very first auction. Can they be successful? In a lot of normal auctions, the answer is yes - as they are usually bidding on a niche product that not many people want.  Now thats fine, and it works for them.  But in a penny auction for a popular item at 7pm on a rainy Sunday? No chance.

Bidder power rating: 1/10.

The sniper
Ah the infamous sniper mentality, anybody that has read anything about online penny auctions will have heard about this type of person.  But they don’t carry rifles, instead their weapons are a mouse and keyboard and a desire to ruin your auction bid right at the last second.  By only waiting right until the last moment to bid, they aim to keep the bid price low and avoid a bid war over an item by catching any other competitors off guard.   Just as your going to make a cup of tea, thinking your desired purchase is secure and that you have entered the winning bid with only 2 minutes left to go; they pounce. They beat you by the lowest amount, often 1 pence. They truly are the destroyers of dreams on online penny auctions!

Bidder power rating: 4/10 - Whilst they be fast, you can also try and beat them at their own game!

Penny Auction auto-sniper
A more advanced, perhaps dubious version of the sniper.  The auto sniper use the latest computer programs to beat you to the last click.  Some even go so far as to sync up with the server times/ clocks and interface directly with the webpage on the penny auction website.  Just dial in the auction, max amount and let the computer do the rest.  With incredible reaction speeds, these bidders can literally wait until the last second to bid on an auction site or penny auction.  Although, make sure you play responsibly, as there is some talk of treating these websites like gambling sites! See this BBC article concerning the latest news and opinions from experts about the subject

Bidder power-rating: 6/10.  Things are starting to heat up a bit with the whole auto clicking programs!

The penny auction big spender.

They came, they saw, they spent.  The big spender isn’t afraid to outbid, and keep on going.  They seem to be willing to take a price for an item thats perhaps near retail.  Maybe they are not even in it for the item, but more the thrill of bidding in an online auction, with the excitement and anticipation that they bring; especially the last 15 or so seconds of a penny auction with a timer reset!  However, they can be beaten often by the sniper technique, thinking they have scared most of the competition away can leave them complacent, thinking that the auction item is theirs.  Time to prove them wrong!

Bidder power-rating: 5/10 - Can be a higher or lower score, all depends on how much cash ramping you are prepared to do and how good your ‘bullying’ tactics are in an online penny auction.

The Niche Maestro
These guys know their topics, products and niches.  These are people that will pick one particular area or product on an auction website and plan to dominate it.  In order to do this successfully, you must not only know about the product, variations of it and how much it is worth, but also know about the other bidders.  They say that knowledge is power, and this is certainly true when trying to dominate a niche in an on-line penny auction.

They key is know when your opponents will stop bidding - this kind of information can often be obtained through careful analysis of past auctions on similar items and prices paid etc.  Try and judge whether they get into bidding wars and stay in them, or give up easily.  All these types of variables can affect your strategy when bidding for an item; think, do you have success bidding early or late? Do you have enough capital for a bidding war? What is the average difference between the ‘real’ value of the item and the average online penny auction price.

One thing to consider in any kind of auciton, penny auction or the regular ebay type is whether you can you make any money by reselling the item? Is a particular item listed for sale in an auction actually a ‘rare’ or sought after product that many people want, but the seller does not know its true value.   (Although this is often not so applicable on penny auction websites as most of the products available are main stream with a cost already set by a major retailre.) If this is the case, think about the other bidders that may also realise this.  If so, have you seen them bid before? What are their bid histories and auction listings like.  Bear in mind that the more specific the niche that you are targeting, the easier it will be for you to consistently achieve a high rate of putting in winning bids, also knowing the ‘ceiling bids’ on penny auctions.  Try to get a feel for where the ‘lowest’ average winning bid is for an item.

It can be a good idea to put all this data into a spreadsheet program like excel to make it easier to manipulate.  For example, producing bar charts of item prices over time, has the average price increased? Or decreased? How popular are the items  on a penny auction? Is it possible to ‘dominate’ a niche almost entirely, by buying as much of the items that are for sale as possible and then re-selling them for an increased (but still realistic price) online.

Another tactic to use when you know a large amount about a niche is ’spread selling’.  This is where you research for / look for the same item, that is listed either on multiple auction websites or multiple times on the same website (although it works better with the first example).  If you see a substantial difference between the final bid prices of two similar items on different sites (eg. on may be on a penny auction site), it may be worth seeing if there are any more available at the cheaper price, buying them and then re-listing them at a higher price on a different online auction website.  Or you could buy them from a an online penny auction and then list them on a normal auction website such as ebay.

Power rating: 10/10

written by admin