penny auction strategy

It’s happened time and time again: Brand new penny auction sites come on the scene and a select number of diehard bidders jump in when the site first opens, all while using the same name that other penny auction bidders have come to know them by, and win a lot of items at very low prices. These bidders have not only made penny auction bidding a hobby, they’ve made it a career.

Advertising outside of the penny auction industry is imperative. 

There needs to be more bidders who are not familiar with penny auctions  signing up, bidding and winning for penny auctions to continue to grow and prosper. If not, the model is not sustainable when the same group of bidders win time and time again. And don’t think these bidders don’t network and communicate with eachother. Facebook and penny auction forums with private messaging and social functions have already made this possible.

It’s happened so many times, so many sites have already shut down and many more that are just opening, sadly, will probably eventually go the same route. 

It can often be talked about how much penny auction sites are ripping people off, and with reason – some are, but what isn’t stressed enough is that there are bidders who are ripping off sites. A few short months ago we posted a guest article from a penny auction employee who experienced this firsthand, and though I’m sure these bidders didn’t like it, and will especially not like this post, it’s what’s happening.

These bidders are partly responsible for running legit penny auction sites to the ground. 

Because a select number of bidders have made it their game to dominate, their game plan is simple. They “stamp,” “defend,” and seek “revenge” on anyone who dares to “jump” in on “their” auctions. For them penny auctions have gone from a fun hobby to an outlet that fosters their rapacious desire.  Sure, if you wish to bid against them, and wish to lose a lot of money in the process, you might just win, this is part of their strategy, by the way, but does anyone think of the site and the future of penny auctions when they are consistently carrying out this strategy?

I know bidders who have lost hundreds of dollars in bids due to these sites shutting down.

Of course we can’t put all of the blame on these bidders, the sites need to really market themselves on a wider scale.

Take for instance the penny auction sites SkoreIt and Beezid:

SkoreIt advertises on the radio, and has been heard by thousands of listeners of ESPN’s Mike & Mike show, as well as by late night listeners on Coast to Coast AM. After radio campaigning their userbase has skyrocketed. A few bidders who were once able to win items cheap then started to wonder if the site was ripping people off due to the influx of new bidders.

Beezid has been found to advertise on TV,  and we recently saw that they’re sponsoring a prize in Redbook, they’re getting the word out there about penny auctions, but neither are really not calling themselves a penny auction.

Why? The word penny auction, thanks to the real scam artists, has been equated with scam and while attention needs to be put on the penny auction scams,  it has started to, but less attention has been put on sites that are legit.

We try to give many new sites a neutral start here, which is why we’ll post interviews with sites & talk about promos on sites that seem to be running their site right, but it’s not enough for a site to actually keep going if they just go for the keyword “penny auction” when they advertise. If a penny auction startup does not have the money to also invest in other areas of media, they really won’t be able to sustain losses that are handed to (vice versa) the select bidders who have made bidding a career.

Entrepreneurship and ingenuity is great, but after these bidders win so many of the same items isn’t that enough? Not when bidders are resellers.

“Powerbidders” are not likely to bid on high traffic sites like Skoreit and Beezid, they just won’t do it because to themlosing is not a smart business decision.  They won’t win items for less than retail time and time again. In fact, one bidder in particular even proclaimed on his bidder name specific Facebook page that he won’t bid on the larger sites because he can’t win as easily. Why do so many sites shut down? Losing is not a smart business decision.

This is why you’ll see the same bidders always signing up on new sites and winning items, so many items that the site ends up shutting down because they can’t sustain the losses.

This is why sites should try anonymous bidding out, sites like BargainsandFun and CheetahBids already do. 

Imagine, no history on who you’re bidding against. No stats to look up and see that your opponent has won so much they probably won’t stop, so you do.

There’s a large number of bidders who are no longer bidders anymore. Why? Penny auctions aren’t fun for them. They weren’t bidding to make a profit – they were bidding for fun. They were bidding because they had a chance to win a few items that they couldn’t otherwise afford. Now they’re gone and they won’t return. There may be a winning strategy to penny auctions, but it’s one fueled by greed.

Greed has more than likely overtaken all of us, desires are inexhaustible. You don’t have to travel to a 3rd world country to see that there are people who are suffering. On the other side of the coin, there are some who are even thriving on less than what you think is necessary.

Is enough ever enough? Will penny auctions last?

There are two ways to get enough: one is to continue to accumulate more and more. The other is to desire less.-G.K. Chesterton (1874-1936)

Photo Credits:  CC - Some rights reserved by windsordi

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