Friday, October 28, 2011

Penny Auction Mistakes - 1: Bidding Too Early

This is my penny auction mistakes series and the first post is devoted to bidding too early. This is a classic beginner mistake, especially with the ones who think that penny auctions are akin to traditional auctions (they are not). Just avoiding this simple mistake should help you save some bids in the long run.

The important part to remember is that this is a classic penny auction mistake only at some penny auctions. At others, this might actually be a great strategy! You need to recognize if the bidding is a mistake or not through the tips and strategies that I provide here.

Take a look at the auction below from Quibids.

Can you see the problem with it? The auction has over 16 hours left, and already over 500 bid are placed! This is a very typical mistake at Quibids and other established penny auctions. There is absolutely no way in the entire world that these bids could be the winning ones. This is a high-ticket Quibids product that is in a lot of demand. Very likely, the product will end up gathering over 25,000 bids.

Remember that penny auctions like Quibids are not like traditional auctions. Here, the last bidder wins and you don't determine the bid value, which means all bids are the same except separated through time (same value). Thus you would not want to squander away your bids early on. You are highly unlikely to win with several hours remaining for an auction to end. If you are serious about this item, bid when there are a few seconds left on the clock. The auction extends and goes on for hours together even from this stage.

However, there are certain cases, special cases, where this strategy might actually work. This is true for small penny auctions and new penny auctions that are just building up and lack a very active user base. A lot of auctions, especially in the afternoons, might be won just by one bid. In such cases, it is a good idea to place a bid at night if you are not able to place a bid in the afternoon. It might just pay off.

So how do you know if you are making this penny auction mistake? Here is a small checklist for you to go through.

  • If the penny auction is popular, like Quibids, never bid when there are several hours left on the clock. The 1 cent wins you see displayed on Quibids are extremely rare. 
  • If the item is a big-ticket item, like a Macbook or photography kit or HD-TV, chances are that it is highly competitive and a lot of people will be bidding on it. In this case, it would be a mistake to bid very early. 
  • If the auction end time is towards the evening and weekend, chances are that people will log in and check the auctions. In this case, as far as possible, avoid very early bids. 
  • If the penny auction is very new and only a few bidders are active on the site, you might want to take your chances sometimes by bidding too early. 
This is a classic penny auction mistake that you should avoid. Sometimes beginners see that there is no competition now, and get tempted to be the highest bidder. This is meaningless because competition will start when the auction is about to end, not when there are several hours left on the clock. Avoid this penny auction mistake and save a few bids.

Also, don't forget to check out my Penny Auction Strategy Guide.

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