The Penny Auction

In this post on how to run your own penny auctions , we will look at site and front page design / product placement for this. As your penny auction website is new, you will obviously run into problems of users thinking about wether or not to trust your website / service. After all, you could have terrible customer support, and a very strict set of terms and conditions that whilst legal may not be all that ethical when it comes to the customers experience. Therefore, you need to make the visitor feel as comfortable as possible; youu will need to use tactics and think strategically about this. As such, you need to quickly explain to the potential bidder what the whole penny auction system is about, whilst also making sure it looks as serious and above board as possible. As such, it may be an idea to tone the use of really bright colours and exploding or tacky graphics on your penny auction website. Instead, perhaps go with a clean, sophisticated contemporary look. Afterall, this is a place where you want users to spend money and then return again again even if they don’t win any of the products that they bid on. Start thinking high-end credit cards, sports car manufactureres, 5 star hotels,, that kind of idea.

However, you still want to let the penny auctions visiters know that the clock is ticking and time may be running out on any of the great items that they see. So you need to highlight, on the front page the items , their current price (which is obviosuly cheap / great) and how there are only a few seconds left on the countdown timer on the penny auction. But this must be done in a ’soft’ way, perhaps, rather than large garish bid now signs. However, this is just one opinion on the tactics you can use when creating your penny auction own site, so they should be modified depending on how you feel and wether you are targetting a specific demographic and how much capital you can use when investing in the site and creating different designs / themes.

Other interesting articles:
Losing Weight… Yeah Right

written by admin \\ tags: design, penny auction, run your own, tactics

In this post on how to run your own Penny Auction, we will be looking at why all the systems use bid packs - and how they can be used to make your penny auction website the best it can be and increase its revenue to a maximum.

By using bid packs on your website, you have now gained two advantages - compared to if you didn’t use them. Firstly, there is not guesswork about what your cash income will be, and therefore a greatly reduced risk concerning the amount you can spend on prizes. This is because in affect, the bids have already used by the bidder! They are now merely ‘allocating’ their bids on which ever item they would like. Whereby the number they allocate will increase the likelyhood that they will win the item being auctioned off. Although timing, bidding ‘personalities’, time and the current price of the item are all part of the equation as well. Which brings us onto another penny auctions strategy. Never bid on items already under progress. In fact, the first time you use these types of websites, it may be advisable to not bid at all. Instead, just sit, watch and take not. In many respects, Penny Auctions are simmilar to Poker in many respects. Whilst poker may intially seem very much like a game of pure chance, in reality it is not. There is a great deal of skill involved in becoming a good player. In many respects, you are playing the people not the cards. Online is the same. Sit, wait and look at how people place their bids. Do they wait till 0 seconds left? Do they bid straight after you? How agressive are they? It is alll about getting inside their head and looking at the penny auction from their perspective. How badly do they want the item, what are they willing to do to get the item on the penny auction website?

Once you begin to understand your opponents, you will begin to understand how to maximise your efficiency and use tactics to win the products that you desire from the penny auction website.

written by admin \\ tags: bid packs, penny auction, strategy, win

The next thing to consider when thinking about creating a penny auction is the types of products that you are going to offer for people to bid on and win. You need to think strategically about this.

The most popular penny auction items / products to consider are generally high end technology gadegts and consumer goods that are probably outside of the everyday budget of most people that will be using your website. However, you also want to make sure that these high end goods are well known and desired. For example, I am sure there are some very expensive and advanced electric fire places out there - but that doesn’t mean people will want to bid on one in an auction.

Instead, in your penny auction, you would want to concentrate on items such as Plasma T.V’s, laptop computers and the latest games consoles. Almost really expensive Christmas type gifts. There is a good reason for this. They are aspirational products that people may have used before; this direct experience with what you are offering on your online penny auction website is key. They know that these items are good, fun but, however, are a luxury which can rarely be bought without much thought and consultation. Therefore if people think that they can have these for free, they will take the oppertunity. In short, if it would appear that a small financial input, with some risk carries a potentially large payout then this is attractive - especially when the product they are bidding on is well known and desireable.

This is what penny auction studies experts call the endowment affect. Once the user has bid on an item, it is in their nature to keep bidding to make their previous bids worth it. Think of averaging down in a falling stock market, so that you hold more stock at a proportionately lower price than you did before, this is the same mentality that can be applied to the tactics of a penny auction website. The end result being that people will go past the amount they may initally wanted to have spent in the penny auction just because they have already spent so much.

Stay tuned for a look at the concept of bid packs and how this will help your penny auction website to remove the ‘real’ money aspect from the user experience and so encourage more bidding on your website.

written by admin

Run your own Penny Auctions: Part 2

In this second of a series of posts about how to setup and run your own penny auction, we will be examining the potential for gaining free marketing and driving traffic to your website.

Social networking is the latest buzz in the Web 2.0 world nowadays and looks set to stay around for some time to come; it is a great idea to capitalize on this. Many Penny Auctions already do, so you’ll have to as well. If you have a lot of ‘friends’ on Facebook or Myspace, why not create a group telling them about the new website you have set up? Perhaps offer them cheaper bid prices if they are among the first X number of people to register with your website. This brings us onto another point to consider when setting up a Penny Auctions website. The critical profit mass. That is the number of people you need to be ready and waiting when you activate the site. After all, if there is only one person that knows about your offer and is waiting, they could potentially win all the prizes for hardly any bids purchased. If this cycle continued, you would probably run out of start up capital very quickly. The solution? Create a buzz.

Run your own Penny Auction: Creating a Buzz

Letting people know about your venture is vital before you launch. The main methods for doing this can be divided into two categories, online and offline marketing. We will be looking at the latter method in another post. When considering online marketing, you also need to choose between traditional ad driven marketing and the newer concept of ‘viral’ marketing. The former will often produce more solid, predictable results at a price. Whilst the latter, is basically free but will usually either fail or become very successful. (99% are probably of minimal affect). Stay tuned for the next Penny Auction post where we look at viral marketing in greater depth and study its implications when thinking about running your own Penny Auctions.

written by admin \\ tags: advertising, marketing, penny auction, penny auctions, run your own, social networking, viral

Penny Auctions have generated a great deal of interest in the last year, and with this many people have been asking about how to create and run a Penny Auction website. It’s time to develop to stop being the bidder and start being the auctioneer!

In this blog, we will aim to help you devise a Penny Auctions strategy, a tactical look at what you need to setup your own version.

Run your own penny auction: Money!

Before starting any kind of business venture, it is always sensible to consider the risk and reward involved. Creating a website such as this is no different; in short, it takes money to make money. Whilst the internet has given a platform for penniless college guys to make millions, these people remain in the minority. To run your own penny auction will require initial setup money, and the amount you have available may well determine how successful you will be.

The first thing to consider is the level of competition you will face in the online marketplace. In the UK, there are roughly 5 or so ‘main’ penny auction websites. Of which the largest two are the biggest by far. These companies have significant ad budgets that are probably much higher than yours. The reason for this large advertising budget is simply to attract new customers. Which = more money = more ad budget = more customers etc etc. Another thing to consider is why would people leave their current penny auction website, where they may have developed a specific strategy / invested time to come to yours. Assume for the minute that the items being bid on are the same (usually the latest must have technical products. eg Nintendo Wii’s and Plasma TV’s) what does the website that you run have that is special? The simple answer? Lower priced bids.

The real answer? The simple answer is not the way to go! As a startup you will need a higher profit margin, and lowering the prices of the bids whilst retaining the same number + level of products as your competitors is a problem. Therefore, levels of growth will be limited unless you have substantial initial investment for advertising and the ability to operate on lower bid prices that are of good value to the end user. Stay tuned for the next post about how to run your own penny auction website where types of free marketing will be examined and we will try to develop a good strategy to use.

written by admin \\ tags: advertising, create, penny auction, run your own, start, strategy