Penny auctions, also called bidding fee auctions, are all-pay auctions where bidders pay non-refundable fees to place incremental bids. As the term suggests, these bids are in pennies (and U.S. cents in the United States). Auctioneers make money through the payment for the bid that wins and through the non-refundable fees. Some of the most popular items on sale in penny auction sites are electronics like iPads, shopping gift cards, jewelry, and fashion items like designer bags.
The History of Penny Auctions
The term ‘penny auction’ has its roots in The Great Depression. Many farmers in the U.S. were unable to repay their farm mortgages and were being foreclosed upon. Banks would get the foreclosed properties and sell them in auctions. The bids would be so low that other farmers would get the farms for pennies. After the auction, the bidders would return the land to its original owner.
The Different Types of Penny Auctions
There are different types of penny auctions, all requiring different strategies. The types of different auctions include:
Cent Auctions: With these auctions, the price rises by one cent/penny each time someone places a bid. The timer adds between 10 and 20 seconds after every bid. Last bidder wins that item if the clock reaches 0 and ends.
Reserve Penny Auctions: These do not have a clock and you must place multiple credits to win the auction, sometimes you can win with just 1 bid, usually these have an auction range that is 5% of the value of the price, the auction ends win the last person hits the reserve price, one of the #1 sites that is pioneering this model is PennyGrab.com
Beginner Auctions: Most online auctions often feature beginner auctions. Here, people who have not won anything yet, get to bid amongst themselves. Winners can no longer be part of such auctions. Open auctions: These are auctions that are open to all members.
Fixed Price Auctions: In these online auctions, the winner of the bid has to pay the price displayed in heading as well as delivery charges. 100% off auctions: Many auction sites have 100% off auctions whereby the winner only needs to pay shipping charges. These auctions are done for promotional purposes/to reward active bidders.
View Price Auctions: In these auctions, the current auction price is hidden and you will have to pay a fee for each view.
Reverse Auctions: Reverse auction sites start at prices close to the retail prices (MSRP) of the items being sold. The price drops with each bid. You have the option of buying the item at the current price.
Lowest Unique Bid Auctions: In these auctions, the winner is the bidder who has the lowest unique bid.
Seat Auctions: A seat auction requires that you buy a ‘seat’ in the action before the bidding begins. These auctions are mostly used for large prizes like real estate and cars.
How do Penny Auctions Work?
It is important that you understand how to use penny auctions. You get to determine the product to bid for. You will have to buy a non-refundable fee (or ‘credit pack’) to take part in a penny auction. You can buy as many credit packs as you wish for future auctions. Each bid you place costs you a credit pack. The price of the item usually starts at zero. With each bid you place, the price of the item increases by a pence or one U.S. cent, depending on the country. The bidding stops when time elapses on a current bid price. Some auction sites indicate the elapsing time while others have ‘hidden random reserve’ prices. Advantages of Bidding on Penny Auction Sites You should place bids on penny auction sites since you stand to make good money. In most cases, products go for about 10% of their retail value. The price of ‘credit packs’ is very low, meaning you will not lose much money even if you do not win the bid. Penny auctions follow an entertainment shopping model, meaning you will have a lot of fun while bidding. There are many items to choose from, meaning there is no risk of ending up with an item you will not use. The fact that you will be shopping online is advantageous in that you get unparalleled convenience since you can shop whenever you want, wherever you are, you save on transport, and your anonymity is protected.
Penny Auctions and What You Should Expect
With the emergence of Penny Auction websites and so many new participants into this ever growing field, it’s wise to know what to look for AND what items that have the highest potential for you to win are.
When Bidding on Penny Auctions, everyone has their favorite things. From electronics to toys to gift cards… you can be sure that some of the hottest items can be found on a Penny Auction site. However, it is also important to remember that seasonal changes play a significant role in what is being bid on by other members of your favorite Penny Auction site.
The Holiday Season will see an upsurge in toys and games (including of course, video games and tech items) while Valentine?s Day will have items more geared toward adult loved ones, like expensive purses or gadgets for men.
So while many use Penny Auction Sites to get things for themselves or loved ones, it’s important to note that there are also items of great value selling far below where they would normally sell at other times. You’ll see this in virtually any type of store though, online or offline. Winter coats, for example don’t sell well in July.
But there are also the more mundane items like Gift Cards to Target or Wal-Mart. While most Penny Auction Players tend to view the higher ticket items like 3D HDTV’s or Xbox or iPad 2, they are overlooking the tremendous value inherent to items like Gift Cards, which tend to sell for vast discounts from retail (aka: the face value of the gift card), or even can be purchased by using features like “Buy Now” found on websites like PennyGrab.com where a Member can routinely buy an item for 40, 50 or 60+% off of the retail value.
However, no two Penny Auction websites are the same. Not only are they all management in their own, unique way… but the Members of these websites will all have their own agenda, methodology and wisdom.
As with people, penny auction websites trend. If the PS Vita is the newest “toy” must have on the market, you can expect a deluge of Vita’s being offered on penny auction sites. While we all have an inclination to be the first to have the “gotta have it!” item of the moment, this is a perfect opportunity to keep your eyes open for items like Gift Cards, or even the item(s) that have just been replaced by the “new” must haves, like the Nintendo 3DS. Since not as many people will be bidding on items like the 3DS in the above example, that means you can still win a top line item at an even greater savings. This holds true on each and every penny auction website.
But the most important thing to remember, regardless if you’re a veteran in the penny auction world, or brand new… WATCH and LEARN. Use as many resources as you can (like chat rooms on your favorite penny auction sites) to converse with other Members and gleam an insight into others methods and tactics. Pay attention to when the “power bidders” place their bids and on what items. Winning, after all, is no fun if you’re constantly paying more than retail!
Finally, be aware of which penny auctions you’re playing on. There are (in fact) only a handful of penny auction websites that not only have the expertise, but also the financial backing to be around for longer than a month or two. In no particular order, penny auction sites like PennyGrab & QuiBids have founded a new level of customer service, customer care… but most importantly, customer trust. These three foundations are recreating not only penny auctions, but online shopping for millions who take advantage of the tremendous savings on a daily basis.
How do you Increase your Chances of Winning Penny Auctions?
There are several tips that will increase your chances of success in penny auctions. Avoid bidding wars: Do not click on a bid the moment another bidder places a bid. Allow the timer to get down, just in case other bidders place bids. Your aim should be placing as few bids as possible. Reserve auction sites work a bit differently, there is both skill and chance involved, usually most people jump in the auction late for a chance to win. You should not be the first bidder: You spend a credit pack with each bid and you should therefore, start bidding when you suspect the bidding is about to stop. Do not bid on items that have more than 2 minutes left: The best bids are those with less than 10 seconds left. Be dedicated: Do not place one bid and give up when somebody else bids. Choose an item that you really want and go all the way. Watch the other bidders: Bid for items where there are only a few bidders. The best item to bid for is one where bidders are reducing, not increasing. Buy bid packs: Bid packs are cheaper than buying a few credit packs at a time Research on the item: Researching on the item ensures that you are not overbidding for it. Use a strategy: Study and use such strategies as the Hawk-Dove or Snowdrift Game theory and research on how to use penny auctions. Use an intimidating user name; this might just work! An intimidating or confusing user name might dissuade bidders from bidding against you. Go all the way: If you are in too deep, go all the way. As an example, if you have already spent $200.00 on an item worth $300.00, you have nothing to lose by going all the way.
Picking a Good Penny Auction Website
Go for a site that does not violate laws under the Unlawful Internet Gambling Enforcement Act of 2006. You could read independent penny auction reviews or check with consumer protection agencies to determine whether your penny auction site is legitimate. Other ways to pick a legit bidding website are reading the fine print in the site’s Terms and Conditions, reading comments, and considering the verification seal. Go for a bidding site where it is easy to contact support, where free bids are on offer, and where winning is easy.
Gaming in the Entertainment Shopping Industry
One of the most exciting and fun new ways the Penny Auction scene has changed recently is in adding flash based video games to their sites. No matter what types of online games you enjoy, there is no shortage of game styles out there to fill just about anyone?s video game desires.
Websites like QuiBids has four different games that their Members can play to earn free bids. From fishing to Treasure hunting, players can increase the amount of bids in their portfolio by scoring well in games while posing a minimal risk. While each game has different standards of rewards for performing well, one site in particular is paying up to 12 - 1 for those who can play a perfect game.
On PennyGrab.com yesterday, their version of “Play for Pay” games, Penny Punt, was released. Not only is it a fairly simple game to take part in, but you can win up to 12 Bonus Credits for kicking 3 field goals.
These games now look like they will be an industry standard soon as customers are seeking ever more value while also demanding more entertainment and fun in their favorite Penny Auction site(s). To me, it simply makes more sense to invest money on penny Auctions in hopes of gaining a credit to play these games than to not. Not only does it give you a Bid advantage (by allowing those who win the Bonus Credits to place more bids on the items they want, for essentially free), but they also lower the overall cost of participating in the Penny Auction Scene.
Now, don’t get me wrong here. While I do enjoy games like Farmville or Mafia Wars by Zynga on my “favorite” social networking website, there is no real value to them OTHER than entertainment. What does that mean? Have you ever heard of anyone ever making a dime from Zynga type games?
Sure, those games are fun, but why invest hard earned money into something that provides nothing more than fleeting moments of success based not on your skill, but on the size of your wallet? I’m not saying that I personally don’t play them nor am I saying you shouldn’t… but Zynga recently went public with a $1 Billion PLUS IPO… they are making a TON of cash for people who should be investing in something that pays them back.
And that’s what Entertainment shopping is, an investment. Not just of your money, but your time and effort. While I enjoy… nay, LOVE Penny Auctions, for me winning a certain item is the ultimate goal. It’s the joy of victory and the edge of your seat entertainment we all get from competing with others for those iPads or Gift Cards. It’s being able to give that hard to find gift to a child or for that Big Screen 3D TV we’ve always wanted for the Super Bowl.
It’s hard to see what the next big step will be in the Penny Auction world, but with such great sites like Quibids.com and PennyGrab.com leading the way… We likely won’t have to wait long.
How to Win Penny Auctions?
In today’s economy, making your dollar earn more is one of the most important things that we, as consumers, can do. It’s no longer “a penny saved is a penny earned” as much as it is “what is that ultimate return on my investment”.
No matter where we shop or what we’re shopping for, the bottom line is, am I saving money. It’s in this mind set that the Penny Auction industry was born. It’s in this mind set that people came to save money.
MANY companies “came” too. So many Penny Auctions have simply vanished because of one simple thing: Greed.
You see, it takes more than money or an investment to be successful in the Penny Auction industry. It takes dedication, it takes insight, it takes a true passion at doing what it “right”. But most importantly, it takes a company putting the Members first and foremost. But it also takes wisdom and ingenuity… from (hopefully) someone with a track record of success and comes PennyGrab.com.
PennyGrab.com has revolutionized the industry to what is now considered it’s own superb genre’ known as a Daily Deal website. With Daily Deal’s as opposed to Penny Auction’s, you are placing a credit (or bid for those who are term dedicated) on an item without a timer so you can win the item you are bidding on -or- perhaps even a Bonus Prize. Bonus Prizes are a unique proprietary aspect to PennyGrab.com. When you place a credit on an item that you are trying to win at PennyGrab.com, you stand an incredible chance to win either “Bonus Credits”, Gift Cards or any number of items that are programmed into the Daily Deal or Penny Auction prize structure of said item. You can use the Free Bonus Credits to further your chances of winning said item or on another item you may also be bidding on! Or, if you’ve won a gift card, you can “check out” with it in your cart or trade it for another item of equal value or…. well you get the idea.
Bottom Line: INNOVATION Innovation like PennyGrab.com’s “Buy Now” feature (Patent Pending). What
PennyGrab.com has done is to make the savings count even for those who didn’t win a particular item. A good (and recent) example that I’ve noticed happens multiple times per day comes out to a savings that is tantamount to you handing me a $5 dollar bill and me handing you back $10 for the privilege. It doesn’t matter if it’s a Kindle, an iMac, a limited edition XBox 360 or whatnot, one way or another, you can win items or savings with minimal effort! But how does it work? Fairly simply actually.
When an item goes up for bidding on PennyGrab.com as a Daily Deal or a Penny Auction, the same item is listed on the PennyGrab.com “Buy Now” page. Each and every time a bid/credit is placed on the Penny Auction or Daily Deal item, the price of the Buy Now items falls! So at any given time, every day…several times a day, you can get a $50 Target gift card (for example) for $32.00 (or wherever it’s price has fallen too).
So again, that is no different than you handing me $32.00 and me giving you a $50 Gift Card to wherever. And that one can change the Target Gift Car to a WalMart Gift Card (or to whatever gift card or item you’d want of the same value!) makes this one very unique and very innovative Company.
This is, quite frankly, the type of innovation that comes from people who are dedicated and have a passion for making something as fantastic as it possibly can be. You just can’t fake this. With Penny Auction websites such as PennyGrab.com, there is always the importance of having a strategy. Strategy’s can range from simply not bidding until late in any given auction to things as extravagant as having an “intimidating” User Name and attempting to “bully” other users.
At PennyGrab.com, they’ve discovered a simple yet extremely effective way to help combat this. Chat. The Chat feature on PennyGrab is one of my personal favorites. Not only do you get to interact with other Members, but you get to know them. It makes bidding… and life itself, more interesting.
When you read a blog post about who you thought was a competitive bidder against you saying how they fed the homeless on Thanksgiving or so and so is having a baby…well, it opens an entirely new dimension to the industry. These aren’t simply username’s you’re bidding against, they are men and women with stories…and you become attached to them and their lives.
It’s just a more personal experience. When you add in the nearly always watchful eyes of the Moderators (who are there more so to post up various Group Grabs, Fire Grabs or Mystery Grabs.. ) who are always willing to share a joke, some trivia or just with random conversation, it turns PennyGrab.com from an also ran into the most personal and inviting experience a person could ever expect or wish for from any type of website.
Having a strategy is more than interpersonal experience. It’s wise to target a specific item. Being focused on a specific item rather than throwing yourself around 30 different Penny Auctions or Daily Deals as it will have a more direct & positive impact on your savings because you will be able to more closely follow the item you most want to win. But what about Fire Grab? Fire Grab is a spectacular triumph for PennyGrab.com Members.
What they’ve done is to take the Penny Auction idea and make it, somehow, better by forging ahead with a unique concept, making it Progressive. Progressive FireGrab’s work like this: Say a Fire Grab is posted with a $10 McDonald’s gift card. at a predesignate price point, that $10 Gift card will change to a $15 Gift Card…and as the auction goes on, to a $25 Gift Card..and so on and so forth until the Penny Auction (aka: FireGrab) ends! It’s such a fantastic concept that really, I just can’t put it in words… you need to experience it yourself. It’s that great!
With Buy Now’s, Daily Deals, Progressive Fire Grab’s and literally so much more (not even counting the new innovations they are set to reveal so very soon!), there really is only one choice when it comes to not only Penny Auctions.. but to Buying Online. PennyGrab.com is the perfect answer to the Daily Deal and Penny Auction industry.