Wednesday, April 6, 2011

Niche Penny Auctions: The Next Evolution Stage

Niche Penny Auctions are those penny auctions that cater to a very specific niche instead of being all over the place. Big penny auctions like Quibids typically sell just about everything, from Honda Civic Car to Disney World vacation packages. Of course you always have the more typical items like Gift Cards, iPads, iPhones, etc. However, Quibids can afford to auction such diverse items because of its sheer size and number of members. Quibids is by far the largest penny auction site in the US.

But what about the new entrants? There are many new penny auctions coming up, each trying to bring out something newer and more innovative than the established players. Of course being new is a double edged sword - they can offer great deals because there are not as many bidders but at the same time people don't really trust these easily.

So how do the new penny auctions establish themselves? It is really hard for them to overthrow the incumbents, which area really like giants. It is the equivalent of a silicon valley startup trying to overthrow Google in search! Even other giants like Yahoo! are unable to do so.

So how do new sites differentiate themselves? Easy, narrow the niche. Thus the new trend and the next logical step in the evolution of penny auctions is the emergence of niche penny auctions. Instead of dealing with everything under the sun, these niche penny auctions really want to capture their specific target audience. In doing so, they can establish themselves as a name to reckon with in that particular niche and within this, they can be better than the behemoths like Quibids.

For example, consider ScoreLuxe. It caters exclusively to the luxury niche. No product here is less than $50, so you will not find cheap items at all. You will find high-end designer goods like Louis Vuitton bags or $500 Bloomingdales gift card or $100 Victoria's Secret gift card in addition to high-end electronics like iPad2 or iPod Touch 32GB. Of course, not everyone would be interested in these items and they will never bother to join the site. However, for those that do, the rewards are great: The first iPad2 sold for $0.90 on ScoreLuxe!

As another example, consider the site CrazyCigarDeals. This was founded by TBS-Cigars, a well established business. As the name suggests, you only find deals related to cigars. If you are not into cigars, there is little that you might want to do on the site except if you want to buy something as a gift. Again, since not everyone is a cigar aficionado, there is less competition and the site will probably make a name for itself in this niche in the long run.

So where does this leave us? I think the penny auction industry will, over time, go more mainstream as more and more businesses start adapting this idea. They will find that penny auctions can be a great way for them to sell their products in the long run as it offers discounts, deals, fun, excitement and the rush of adrenaline all packaged into one. These businesses will only operate in their own niche and thus we will see more and more niche specific penny auctions in the future.

In the future, Quibids will be like the Walmart of penny auctions that sells everything whereas if you are looking only for laptop deals, you might want to go to BestBuy or a similar place. Niche penny auctions will carve a name for themselves and will work side by side the bigger players like Quibids

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