Strategies for Success with Penny Auctions (If It’s Even Possible…)
✓ A Caveat
These auctions are created to make profits for the site and the odds are stacked against any bidder from the start. Don’t buy bid packagess unless you can afford to lose and are prepared for the possibility of losing your money.
There is much made on the some of these sites about being able to direct bids made toward a lost auction for an item to a final purchase under a “Buy Now” option. In my research, however, I found that the estimated value of the items is usually inflated by 20 to 30 per cent, there is usually a ‘shipping and handling fee’ to make the purchase, and considering items in these auctions usually go for a very small percentage of the total value and your bids in the case of a loss will be an even smaller percentage, there will usually be a substantial balance to pay to buy the item.
Most penny auctions enforce limits on the number of wins in various categories. These limits do differ depending on which auction site you’re using. Familiarize yourself with the limits, planning accordingly, and be sure to be choosy about what you bid for and whether it’s an item you want or need. If there are two people bidding, you can expect every 50 bids you place to increase the price by only one dollar, so don’t start bidding too early or you’ll run out before there is a true likelihood of winning. This is where experience will help you become more instinctive and able to judge your chances.
✓ The Auction
The basic auction setup is a page showing numerous timed auctions for a wide variety of merchandise. Keep in mind that even though this is a ‘Penny Auction’ each individual bid costs between $.51 and $.71, depending on the site – the cost of each bid in the bid packages plus the penny bid. Purchases are final. Only buy the minimum bid package size necessary unless planning a prolonged to set up automatic bidding.
✓ Plan of Attack
It’s a good idea to have two separate windows for the auction site open side by side on your monitor. If you find your bids are running low and wish to buy more, the last thing you want to do is accidentally switch pages from the auction, causing you to miss your bid. If your monitor does not have enough width for both windows to be open side by side, just make absolutely sure you right click the link and select the option to open a new window and resize the windows the best way possible to make the countdown clock and bid button visible.
Your first step when exploring a penny auction should be to check out closed auctions to learn what sells the most and at what price range. If you’re interested in a specific item, find closed auctions for that item to see what price range in which they usually sold.
You will see that the bidding on ‘big ticket’ items is fast and furious and these items are most likely not the best place to start. These auctions attract the most experienced bidders who know all of the tricks of the trade. Let’s just say that your chances against these bidders are slim to none until you gain some insight and experience. I would recommend gaining experience on the smaller item auctions.
It’s easy to get caught up in the visuals of the screen and participate in more than one auction, but this essentially diminishes the amount available for just one auction and will result in having to purchase more bid packagess more quickly.
If you start bidding too early, you’re most likely just throwing your bids (and your money) away. You may miss out on an auction opportunity, but it’s worth avoiding the risk of paying out more than you want if you win, or losing your money when you run out before the auction ends. Start bidding once the bid price is close to the usual sell range, especially if your resources are limited. Keep in mind that those bidding at the beginning of an auction may be hopeful of getting something for nothing and are usually left disappointed when the bidding exceeds their resources. Those expecting to pay out something for the item are more likely to come away winners.
✓ Automatic Bidding
Automatic Bidding is a tool available to enable bidders to preset the quantity of bids to make and the maximum price to go to in the auction. How this is configured and the individual elements may differ depending on which site you’re using.
The more informed you are, the better your chances of success. The best way to be informed is to take advantage of the automatic bidding view for each auction item. To get to this view, in most cases you need only click on the image of the auction on the site’s main page and it will take you through to the bid management page.
This page usually gives you all the information you would see on the main auction page, including:
• A detailed description of the item you’re bidding on.
• A real-time clock ticking down the time for each bid.
• The current bid price.
• The bid button.
However, you will also find some key information that is advantageous to effective management of your bids, including:
• Itemized bid history indicating whether bids are single or by automatic Bidding.
• Number of unique bidders in the last four minutes.
• Detailed calculation of the status of your bid showing all costs and your net savings if won on the last bid counted.
• The automatic bidding form where you can set automatic bidding to make your bids according to the number you set and the maximum price you are willing to go to.
• The “Buy Now” section which provides details about the price required to buy the item outright after deducting the allowable bids you made in the event of losing the auction.
Be aware though, that while automatic bidding is running you have no control over when or how quickly the bids are made, possibly resulting in using more bids than if you had retained control in placing the bids. If your resources are limited, I suggest manual bidding.
One area in which automatic bidding is a huge help is to ensure bids are made. Those who are easily distracted and unable to focus 100%, should use automatic bidding because in the long runner it’s better to use a few extra bids than to lose after using most of your bids because you were distracted.
If an automatic bid is set up and later it seems there are several other automatic bids operating, it might be worth your while to remove the automatic bid to allow you more control over when, during the countdown, you make the bid. I find that making the bid in the last second allows plenty of time for others considering bids to do so before you and saving you a wasted bid. Bidding during the “going, going, gone…” or “auction closing” countdown is especially effective for this but can also be risky in case there’s a computer glitch or finger fumble that could result in bidding too late.
If, however, you are within what you feel will be the winning price range and there are fewer bidders, you might want to keep in mind that on most sites the “going, going, gone…” or “auction closing” symbols are usually a stand-out image or color such as bright red, and bidders on the main page will be alerted to the possible closing of the auction and may decide to jump into the bidding. If this is the case, you are best to bid earlier.
photo credit: mariachily
photo credit: MarckVision
photo credit: Samuel M. Livingston
photo credit: woordenaar