You see the results where people are buying incredible merchandise for practically nothing in a penny auction and you think to yourself that ‘I’d like to get in on that!’. So you register and venture out to spend the free bids the website gave you and another person bids one more much to your disappointment.
The truth is that nothing in life is free and Penny Auction Aficionados (PAA) understand that to win, they must invest in their success – to create a bank of bids to devote to their favorite items and outbid the next guy.
“But bids cost money!” I can hear you say. “And I want a good, … no, I want a GREAT DEAL!” Let’s take a look at how investing in your WIN works and how with some strategy, patience and luck, you can get that GREAT DEAL!
Look at the website’s bid packages. Immediately you notice that the greater the quantity of bids that you purchase, the lower the price you pay for each bid. PAA look for the best deal that their wallet can afford and buys in. After all, it hard to bid on an auction when you don’t have bids in your bank!
Smart PAA look for new websites where the number of other bidders is likely to be lower (thus reducing the competition). Then they look carefully at what is being offered and makes a list of what they would like to have and the interest they imagine that others would have in the item.
Many bidders new to the Penny Auction shoot straight for the top without realizing that there may be deeper pockets out there willing to invest in their win. Take some time to study the auctions. Putting some thought into how and where you place your bids, especially if you are on a budget, is essential.
Once the auction is in play, the PAA will choose one of two ways to stay in the auction. The first is to place you bids manually by hitting the ‘BID’ button. The advantage is that you have greater control over where your bids are placed. Seasoned PAA understand the downside, especially in auctions with heavy participation, you are likely to be sitting at the computer for some time. But paying pennies on the dollar is the outcome they are investing their time in!
The second method is automated. Most Penny Auction websites offer a feature that allows the bidder to specify at what price to get into the auction and how many bids from their bank to devote to the auction. The feature may have more than one strategy, so the PAA will want to read and select the bidding option that works best for them.
Winners enjoy incredible savings! However, let’s take a look at an example auction for a $350 widget. The auction ends with a winning bid of $6.25 and the winner accounts for $1.25 of the total.
Who makes money? The website collects 625 bids (625 times each bid denominated as $0.01). At an average price per bid of $0.65, the website collects $406.25. A nice return in this example, but remember that auctions can just as easily go the other way resulting in a loss for the website. So they are definitely taking a risk.
The winner, on the other hand has spent 125 bids to win the auction or $81.25 (125 times $0.65 per bid). They then pay the final auction price, $6.25, and a shipping and handling fee, let’s say $19.99, and the total cost of the auction win for the winner is $107.49. That is a 70% savings on the widget! Not many people would say that isn’t a GREAT DEAL!
But what if you don’t win? Most sites allow you to use the value of your bids toward purchasing the widget at the retail price plus shipping and handling. There may be a time limitation after the auction has ended so check the rules, but the investment you put into your bids isn’t lost unless you want it to be.
Just like when you are sitting in an auction, feeling the suspense from the crowd and staring down the opposition, the Penny Auction can be an exciting and fun way of getting your favorite stuff. Remember, to be recognized by the Auctioneer as the ‘Winner!’ means you have to strategize, plan and invest if your name is to be called.
Not everyone has what it takes to win. It takes nerves of steel and a focused resolve to be successful. So if you think you have what it takes, Go get ‘em Tiger!