PennyGrab, under Al Benyameen has grown by leaps and bounds and is one of the most popular entertainment auctions today. Although it is relatively new, it has left competitors far behind and its pace of growth has been quite amazing.
It was a pleasure interviewing Al Benyameen about PennyGrab. He has some insights into the business model in general. Whether you are an active penny auction bidder or simply an observer, he has valuable advice for you. In addition, if you ever plan to start your own penny auction, don't do so without reading this interview!
About Al Benyameen
When I was 22, I began selling hard to find computer cables and accessories online from my garage. I worked very long days (and some nights) to keep my new business alive. With all of the hard work and long hours I was spending, I decided to put my degree in Business Administration and Economics to the test and grow.
In 2006, I expanded into Video Games. With the release of the Nintendo Wii in 2009, I was able to further expand into electronics. This opened the door for BigDeal.com to approach me, which opened my eyes to the new and fun world of Penny Auctions.
I spent night and day studying the ins and outs of the Penny Auction industry, learning it's nuances and looking at ways that I could perfect it. When BigDeal and Swoopo went under a few months later, I decided then that I could do this the right way to make PennyGrab a success.
With all the changes in the Industry in 2011 and all the consolidations of various competitors, I feel that we're poised to see a fantastic amount of growth in terms of new people jumping into the Penny Auction Universe but also in terms of innovations of models and methods and new ways to win. It will not only allow the Pros to benefit greatly, but it also gives a warm and welcoming environment for those new to the Industry.
The Interview
Sid: PennyGrab isn't a penny auction in the traditional sense, in that there is no timer. How does that work?
Al: Great question. I've found that in the traditional Penny Auctions, a certain amount of people were almost always winning. I wanted to find a way to ensure a more fair and balanced approach to not only ensure the new players could win and participate but also to reward the power bidders who play all the time. So the Daily Deal / Timerless Penny Auction model works perfectly for PennyGrab. There is not timer in most of our Penny Auctions (with the exception of our Fire Grab Auctions), but a hidden price point that the players can compete to find. Not only does it allow for a more balanced approach, it also allows those who have no experience in the Penny Auction scene to participate and discover some fantastic values.
Sid: Since there isn't a timer, how long do auctions typically last?
Al: It really depends on the auction itself and what it up for bid. Gift Cards tend to move very fast with out Blitz Feature and an average deal price point of $2.50. On larger valued items like a recent 27" iMac, things tend to go slower as the Members are not only bidding to win the item, but also these Bonus Prizes built into the auction(s), so they can last for a few weeks.
Sid: PennyGrab seems to do things contrary to "industry standards". For example, you have a chat feature that probably no other penny auction does. Why is this so?
Al: Well, I felt that community was one of the most important things missing from this industry. For the old pros to the new comers, no matter who you are, if you don't sense a commonality.. a community with people who are like you, it lets a large group of people simply sit there with no emotional attachment to those they are playing with. Friendship is one thing, but it's also to encourage our Members to help others that may be new.. or have questions or simply asking various questions... to have a venue outside of email or phone calls to our staff.. and get an honest, unbiased answer.
Sid: The timerless penny auction format is becoming popular. Do you see this as the future of the industry?
Al: I hope so! lol. Really though, what I see is a dynamic evolution. While I (and most others) seem to enjoy it, we're always keeping our eyes and ears open to new ideas. We get a ton of feedback from the Community on what they like or don't like and what they want to see adjusted or even something out of this world that's "new". The fact that auctions can end much faster without people waiting on a timer to countdown is a key point to why we believe the timerless Auctions are preferred to the masses.
Sid: How does PennyGrab differ from the several other timerless penny auctions?
Al: Two things: #1 (to me) is our Customer Service. It's something each of us here at PennyGrab pride ourselves on. While no one person or company is perfect, I really do strive to ensure our Members are happy and satisfied. #2 would be with our Bonus Prizes that are built into many of our auctions. I think it shows our Members that we appreciate your business regardless if you win a particular auction. And speaking of which, I guess I'd have to say #3... our "Buy Now" feature (which allows any current Member to purchase an item at a steep discount) without having to go through the bidding process if they choose. The Minimum they'd get off of the MSRP is 15% and we very often see things selling for over 50% off of their retail prices on the Buy Now. It's a no brainer.
Sid: PennyGrab has grown at a really steady rate and never lost support. What are you doing right?
Al: Satisfaction without a Members happiness is what? I would say it's QuiBids.. but I don't want to denegrate a competitor.
Sid: Do you think the penny auction scene is already saturated or do you think there is a good growth opportunity for the industry as a whole?
Al: Unfortunately there is a whole slew of companies out there that are scams. I don't think it's saturated per se' with the legit companies though. But I do think in the end it will be wittled down to 5 or 6 major business that keep the Customer in mind at all times... the rest... well, think GeoCities.
Sid: Who is behind the creative and fun emails that you send out?
Al: That's actually the same person who does most of the shipping, Lee who does the writing. He also moderates our chat room now and then. Jesse does the images in the Emails to liven them up a bit and get the humor across and she also does most of our Customer Service, tech support and a multitude of other things. If you've called or emailed PennyGrab for any reason, more than likely, it'll be Jesse you talk too.
Sid: PennyGrab seems to come up with several new features all the while, from bidding gifts along the way to group grab Fridays. How do you keep these up?
Al: The majority of it comes from what I've experienced in the Penny Auction scene on various sites and how I'd prefer them to be while playing. But a good portion also comes from Member feedback and from what is posted in our Chat. The Members at PennyGrab are top notch and we do our best to make them happy by giving them what they want.
Sid: Which feature on PennyGrab are you most proud of?
Al: By far, it's the Buy Now feature. To me, it shows our Members that not only can they get a great deal with or without bidding... but that we're not motivated by money.
Sid: What's the secret for a business to survive in the penny auction industry?
Al: Customer Satisfaction. If your customers aren't happy, if you're putting penny's over people, you'r going to lose and lose bad.
Sid: Tell us something about the team behind PennyGrab.
Al: We work hard, every day. I like to know that my employees are as happy and excited about PennyGrab as I am. We all share in the sweat and frustrations but we also share in thr triumphs and the little things.. like for Christmas, one of our Members sent us a box of home made cookies that we all shared. It's a team, but also a friendship and is quickly becoming a family. There's Me, Jesse, Sarah, Lee, Brian, Christina and of course Mr. Software who makes the magic happen.
Sid: What's the one advice you would give to bidders at PennyGrab?
Al: Be WISE! If you're new to this industry, watch other members, watch our tips and tricks videos. See when they bid, how often they bid and what they bid on. And of course, ASK QUESTIONS! Sure, our chat is there for community.. but it's also a resource to talk and to truly get to know your friends in a way that a forum simply can't provide.
Sid: A lot of penny auctions have shut shop shortly after starting out. Would you say that the penny auction model is no longer profitable?
Al: Absolutely not. I think the major problem the industry has had is scams and "fly by night" companies out for the bottom line. When you place the customer first and foremost, it shows in your product and to that, I think we're on the right track and we'll continue to be the most innovative Penny Auction website out there.
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