We’ve created an entertainment shopping guide to address related information such as how to win penny auctions, tips, FAQs, and frequently used entertainment shopping strategies. This is a must-read for anyone who partakes in the temptation of entertainment shopping sites or is considering the use of penny auctions in obtaining unbelievable discounts on products. We’ll be updating this guide frequently to reflect any news or pertinent information related to penny auctions (a.k.a. entertainment auctions, entertainment shopping).
Penny Auction FAQ
- What is a penny auction? – In an online penny auction, also known as an entertainment auction or entertainment shopping site, users purchase bids in order to participate in the auctioning of an item. As the timer counts down towards zero, it is reset to a specified amount of time (usually 10, 20, or 30 seconds) when a bidder places a bid. The penny auction name refers to the currency amount that each bid represents; each bid that’s placed raises the potential sale amount of the item by one penny. The bids however, usually cost between $0.60 and $1 to purchase them.
- What are the benefits of penny auctions? – From a bidder’s perspective, the benefit of penny auction sites compared to traditional auctions are that they provide the opportunity to obtain greater discounts on sale items if the user wins the auction since the winner pays the total bid amount of the item. And because the initial price of the item usually starts at $0.00 and the total bid amount for the item is only raised one penny per bid, the auction sale price for the item is often very well below the manufacturer’s retail price for the product. From the penny auction owner’s point of view, the heated competition and intensity that’s produced by the lure of terrific discounts and the resetting of the countdown clock each time a bid is placed offers great potential profits. For an example of penny auction profitability for a particular item, see our original coverage of a Swoopo auction.
- Are penny auctions a scam? – No, penny auctions are legitimate auctions where you can obtain brand new items for bargain basement prices. However, just like any business, they are susceptible to the integrity of the owner and the site’s business practices. Thus, you should research penny auction sites before using them and be skeptical of new penny auction sites that haven’t been around very long.
- What is shill bidding? – Shill bidding is a term used to describe the practice of bidding on your own items to increase the number of bids. Some penny auction sites employ bots to do this and that’s why it’s important to research these sites ahead of time.
- What are bid butlers? – Bid butlers, also known as an autobidder or bid buddy, is a penny auction feature that places bids on your behalf when you’re unable to do so. On many penny auction sites you can indicate when the bid butler should place the bids, how often it should bid for you and when to start and stop bidding on your behalf.
- What are win limits? – Some penny auction websites set win limits for users to prevent them from monopolizing auctions. Not all penny auctions do this so make sure you take the time to familiarize yourself with each site’s rules before participating.
- What is a penny auction timer? – This is the clock that counts down begins counting down towards zero; the point at which the auction ends. It is reset to a predetermined number of seconds when someone bids. The winner is the bidder that places the last bid prior to the timer reaching zero.
- What is a bid price? – This is the price you pay for the bids you purchase. Most sites sell them for less than a dollar each but you can buy large bid packages to obtain greater savings on a cost per bid basis.
- What are bid increments? – A bid increment is the value each bid increases the price of the item that is being auctioned. For instance, a bid increment of $0.01 raises the winning price of the item by one penny each time a bid is placed.
- What are free bids? – Penny auction sites often give away a set amount of bids for free. Free bids are often obtained upon registering for a site, referring friends, and during special promotions.
- What is a reserve price? – This is an item’s price that must be reached during the auction in order for it to be sold. Reserve prices are usually unknown to the bidders, set by the penny auction site owners and if not met, the item is not won. Some auction website owners may employ the unethical and illegal use of shill bidding to set such reserve prices.
- What is a free penny auction? – Free penny auctions are commonly referred to as entertainment auction websites that give you free bids in return for completing certain tasks. These tasks frequently include filling out surveys.
- Which penny auction sites are legitimate? – Knowing which penny auctions use shill bidders or are just completely fake is a tall order but it is not impossible to identify them. You should always research penny auction sites prior to registering. You can find out a great amount of information about a penny auction website by searching Google and reading reviews about it blog comments. Beware however, many entertainment auction site owners write their own shining reviews or hire people to do it for them. It’s best to get authentic opinions from actual users of such sites but that’s not always possible or trustworthy unless you can speak to them in person. Find out how long the site has been in existence and how many people are visiting it by checking traffic stats from sites like Compete.com. Also, watch for red flags such as a bidder that wins most of the auctions or a bidder that bids against himself multiple times consecutively. Such tell-tale signs may indicate the use of shill bidding by the site’s owner.
Penny Auction Info
- Penny auction prevalence – Swoopo was a first-mover in this market but the popularity of this style of auction combined with the emergence of commercial penny auction software and cheap Swoopo clone scripts has saturated the entertainment auction market. Today there’s more than one hundred penny auction sites with new ones sprouting up every day. A quick search on Google for “penny auctions” will display an abundance of AdSense ads located at the top and to the right of your search results.
- Positive effect of penny auction competition – Competition in any market is good as it encourages innovation and leads to a better end product or service for the consumer. In this case, the overwhelming competition forced Swoopo to change its practices towards losing bidders. Previously, each placed bid that didn’t result in a win represented money lost by the bidder. When BidDeal, another penny auction site, launched with the intention of crediting bidders for lost bids towards the purchase of the item at a decent retail price, it raised the bar for competitors and improved the entertainment auction model. Unfortunately, BigDeal’s tactics for crediting the user for the lost bids was drawn into question when apparently many users complained and the sponsor at the time, TechCrunch, ended their relationship. Regardless of the claims by TechCrunch and its users, Swoopo and many other penny auction sites now reimburse bidders for non-winning bids by crediting them for the cost of the bids in return for the purchase of the auctioned item.
- Negative effect of penny auction competition – Competition in a market can also bring out the worst in people, especially when it effects their bottom line. With so many penny auction sites competing for users and trying to somehow make a profit despite promising huge discounts on products, the lure of immoral yet highly effective tactics used to gain revenue is irresistible to some. New penny auction site owners sometimes succumb to this pressure engaging in the practice of “shill bidding” (a.k.a. shilling). Shill bidders bid on their own items to provoke a bidding war with other bidders thereby raising the final bid price of an item. Site owners may use bots to automate shill bidding on large sites where there are numerous items up for auction. Shill bidding is considered highly unethical and the use of such tactics are in violation of federal law.
Penny Auction Strategy
- Quick counter bidding – A bidder outbids his competitors immediately after they place their bid in hopes of intimidating them to a point at which then will stop bidding. This aggressive bidder wants it to appear as if he has no concern about how many bids he makes and that he is incredibly determined to win the auction at any cost.
- Late entrance bidding – The concept is to wait until the countdown timer is within seconds of reaching zero before you place your first bid on the item. The other bidders won’t be aware of your interest in the item until then and when combined with the quick counter bidding strategy you may be able to scare off your competitors.
- Early entrance bidding – The idea here is to be the first to bid on an item as soon as it is posted. The hope is that other potential bidders will see it has already accumulated bids despite the fact it was just posted on the site and they will move on to bid on other items where there is less bidder competition.
- Cheap item bidding – This strategy is founded under the assumption that the most expensive auction items will attract the most bidders and therefore you should place your bids on the less expensive items. That is, the more bidders an auction has, the less chance you have at winning.
- Off-hours bidding – This penny auction strategy is based on the assumption that there will be less bidders participating during irregular hours. Bidders that employ this strategy may only bid in the early morning hours or late into the evening when he believes most people are asleep.
- Butler only bidding – A bidding strategy where you set it your bidding limits and let the bid butler (a.k.a. autobidder) do the work for you. It’s a conservative strategy of “set it and forget it” so to speak to prevent yourself from becoming emotionally involved in the auction and getting into a bidding war with others.
How To Win Penny Auctions
- Avoid strong players – On some penny auction sites you can see the history of the bidder. Take advantage of that to see if he/she has won a lot of auctions and if he/she is susceptible to a bidding war.
- Don’t bid first – Bidding when there are several days left on the item is a complete waste of money. The odds of winning that item decrease as the time remaining on the item increases. Thus you’re more inclined to win the longer you wait to bid.
- Avoid bidding wars – Scout your competitor as soon as they appear to find out if they are a strong player or not. Identify your bidding limits before you ever start bidding on an item so you don’t get caught up in a bidding war in the first place.
- Visit new sites – Brand new sites should have less users and therefore your odds of winning an item are increased. Just make sure that the new site is credible and doesn’t employ shill bidding bots.
- Buy lots of bids – The more bids you buy upfront, the less per bid price you will pay. The more bidding you do the more you save overall compared to buying smaller bid packages. You also don’t want to run out of bids when you’re in the middle of an auction.
- Focus on one item – It’s tempting to bid on many items at once, especially if you really want them all. Doing so however doesn’t allow you to focus your attention and see what the other bidders are doing if you’re constantly navigating back and forth between auctions.
- Use a bid butler – If you’ve entered a penny auction and you can’t be present for the remaining time take advantage of the bid butler. Bid butlers are an automated feature of a penny auction that will place the bids for you while you’re away.
- Consider buying bid protection – Bid protection is akin to insurance for auction bidders in which a bidder will be guaranteed to win something regardless of whether or not they win the auction they are participating in. In most cases these sort of consolation prizes are bid packs or gift cards. Bid protection is usually offered in the form of more expensive bid packs and it is not available on every site.
- Rethink late night bidding – Your odds of winning an item up for auction greatly increases as the number or bidders decreases. With that in mind many penny auction players believe that it is best to bid late into the evening when most people are not awake. Of course, you’re not the first one to think of this idea and it’s highly possible everyone else losing sleep over it too.
- Aim low – Try going after less expensive items as they will undoubtedly have less eyes on them. The penny auction sites spend a good amount of time and money advertising their more expensive auction items like an HDTV, computer, iPhone, Wii, and Kindles because the potential losses and profits are greater for such items. In contrast, there shouldn’t be as many bidders competing for bid packs, gift cards, and other smaller, less expensive items.
- Research past auctions – Before you start bidding on an item you should find out if the same item has been won before on the site in question. This will give you an idea of what it takes to win the auction and how much you’ll have to spend.
Penny Auction Tips
- Use sites that credit lost bids – Many online penny auction sites will give you credit for your lost bids in return for the purchase of the auctioned item at a decent retail price. Hence, even if you lose the auction, you don’t technically lose your money. Check out the comparison table chart to compare penny auctions and discover which ones credit bidders for losing bids.
- Don’t bid on items you don’t really want – Don’t become a penny auction fanatic and bid on items just for the pure opportunity in getting a great deal as you’ll just lose your hard earned money in the process.
- Penny auction coupons and promo codes – Larger sites like Swoopo often run promotions and offer coupons to encourage new user registration and tempt current users to participate in an upcoming auction. For example, Swoopo has previously provided a $20 discount for a first winning bid and discounted prices on bid packs. Check coupon and deal sites regularly to find out about these great offers and discounts. You might also want to subscribe to the penny auction site’s newsletter or RSS feed to find out when these promotional codes and coupons become available.
- Refer a friend – Many penny auction sites will give away free bids to those that refer their friends. This is a great way to grab some extra bid packs and help your friends save some cash by introducing them to the concept of penny auctions
- Share this penny auction guide <=== Share the penny auction guide with your Facebook friends, Twitter followers, and Google Buzz followers after referring them to get your free bids. This guide is chocked full of information to teach users how penny auctions work, how to identify crooked sites and scams, and how to win penny auctions. So please click on the link above and share our penny auction guide with your friends!
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