Friday, March 30, 2012

HappyBidDay Starter Auctions Still a Steal

HappyBidDay starter auctions are a wonderful place to win products almost guaranteed. Here is the latest starter auction at HBD - ended at 1 cent! (auctions start $1.00, not $0.00). If you are new to HappyBidDay, there is still time to win these starter auctions with almost no risk at all. Also, for a limited time if you use the coupon code HAPPY, you can get 20% off bid packs.

All you need to do is buy one bid pack, and wait for a starter auction. Remember to bid first on a starter auction because if you win other items, you will not be eligible for starter auctions. Once you win the starter auctions, concentrate on other auctions. Another thing to remember is gift cards are easier at this site than electronics, so look for gift cards that are bundled together with bids. 

Are Penny Auctions Dying?

Penny auctions have had an incredible run in the last few years. Is this craze coming to an end? What's the future of the penny auction industry?

This is a tough question to answer, because the future of an entire industry is highly dependent on a number of factors that are hard to predict. However, the current trends clearly point where the future is headed - downwards.

I am talking about a number of trends in the industry. Having studied penny auctions for several years now, I have seen their boom and subsequent decline. There was a time when there was a new penny auction coming up every day. You could also see highly niche penny auctions coming up. A number of businesses jumped on this bandwagon because they found the idea interesting.

Reasons for the proliferation of Penny Auctions
There are several reasons why I think penny auctions became so popular in the US and Europe that you had new penny auctions coming up all the time. Here are some of them -

  • They were already becoming popular. People like to find the next "trend" and jump on it. Unfortunately, penny auctions are a serious business to run and many didn't realize it. They should have done their homework better. However, the reason that the trend was upward was a major reason why many other businesses wanted to get a piece of the pie. 
  • Penny auctions are easy to set up. This is very true. There are standard scripts available that can set up a penny auction site overnight. Of course you should modify the script at least a little to make your site unique but it was easy. I think a business could hire one person to take care of the technology side of setting up a website. It was easy. 
  • Penny auctions are cheap to set up. Initially. Unfortunately, they do require a lot of work and money in the long run to be successful. However, the initial set up part is pretty cheap. Sites just but a domain name, buy some hosting and scripts. All of these can be gotten under $200/year, which is not much at all. 
  • Businesses saw potential. This is why they became popular in the first place. You could see penny auction advertisements all over the internet. I have seen Quibids advertisements in the most reputable newspapers online. You'd be surprised. 
  • There was money to be made. If websites could cross over a threshold of bidders, they could make a good profit. 
After this 'honeymoon' phase came the reality - most penny auctions couldn't make a profit. Penny auctions need a huge initial investment and also need a tipping point of user base to make them profitable. This is the main reason why niche penny auctions never really took off. You have to attract enough people in a very specific niche. This was possible with a few penny auctions that dealt with precious metals, when the gold bug mania was at its peak with gold touching $2000/ounce and doomsday conspiracies were the rage after the recession. Apart from this, I cannot think of any niche penny auction category that did well. 

Many penny auctions were poorly capitalized. They didn't have the money for advertisements, bid discounts, promotions, initial losses, etc. This is all the more reason why I appreciate Quibids. This penny auction has stuck through thick and thin and done a wonderful job of persevering. It is still going strong today. It is by far the largest penny auction. 

Now, most penny auctions see reduced traffic. Bidders are not coming by the droves as they used to. There have been many accusations, and many penny auction owners were dishonest, using bots and other manipulations to make money. This gave a bad reputation to the whole industry. Not a good thing for a new industry at all. You can see the general traffic to all penny auction blogs is also on the decline. People are just not that interested anymore. 

How can Penny Auctions Grow

I think the idea of penny auctions is quite saturated here in the US and also in most of Europe. All the advertisements have lost their appeal and new bidders are hard to come by. However, this is not the whole world. There are many more countries, especially the developing world. Countries like India have lax laws and many penny auctions are now targeting India. I think it is much harder to set up a shop in China, so India was the next target. There were penny auctions famous in South Africa. I am not sure how those are doing though. However, penny auctions need to look for new markets to survive. 

What are your thoughts and experiences in this regard?

Quibids Mystery Auctions

Quibids mystery auctions are a surprise! Well, Quibids is not known for these mystery auctions but some other penny auctions sure do this. That being said, Quibids is the largest penny auction site out there, and it is always good to see some innovation and excitement from this industry leader. So what has Quibids done of late? Well, it is starting the Quibids mystery auctions. What are those? It's a mystery!

Well, the official blog post tells us little. All it says is that you'll see in April, so bidders should look forward to something fun then. There are 9 mystery auctions being run by Quibids.

Tuesday, March 20, 2012

KingOfHowTo on a Vendetta Against Penny Auctions

KingOfHowTo wants to proclaim every penny auction is a scam. And they want to do that not one article at a time, but write an individual "spun" article each time. This of course is an easy way to gather publicity while misleading consumers and readers.

The reason this is misleading is because it doesn't answer the more fundamental questions that a penny auction review should answer. Do they use shill bidding? Do they lie? Do they use fake testimonials? What are the features they have? etc.

Here are few of the articles, all with the same theme - BBB says they are scams. This is poor quality of reporting on an important issue. Worse, Google News indexes the site, so people looking for genuine information on penny auctions are misled into the site.

What are your thoughts?

Thursday, March 15, 2012

YouNeverLose Review

YouNeverLose Review: YouNeverLose is a penny auction site with a twist - instead of purchasing bids, you purchase gift cards at their retail value, gather points and use those points as bids to win additional products.

Minimizing Risk
I have always advocated that you should look for strategies that minimize your risk. This is why I like it when penny auctions have a Buy Now feature, which allows bidders to cash out their bids to buy the product at full retail (whether this price is inflated is another discussion; it happens, but not always, e..g gift cards have a known retail value that cannot be manipulated). This is why penny auctions like Quibids do well. And they can argue their case in front of any litigation: after all, you decided not to buy the item at retail and lost out.

YouNeverLose also does this in its own way. Essentially, it says, buy at full retail from us, and we will give you a chance to win something else. There is no catch - for example, you buy a $10 Amazon gift card and use the free credits to bid on another gift card, and hopefully win it. This of course minimizes your risk - if you fail to win anything with your free credits, you still have the initial gift card you bought - you come out even.

How YouNeverLose makes money
This is actually an important question to ask for any penny auction. After all, no one wants to operate at a loss. The thing with YouNeverLose is that it asks you to buy gift cards at full retail. However, the 'fair market value' of gift cards is almost always less than their face value. There are several websites out there that sell gift cards for less than their face value. It is not uncommon to see $25 gift cards being sold for $23. It isn't much, but it is something. In addition, I suspect YouNeverLose gets better deals directly from the companies (after all, a huge chunk of gift cards are never used, so companies are usually happy to negotiate gift card deals).

How you should use YouNeverLose
Like everything else, you should use this penny auction with care if you want to come on top in the long run. Look for gift cards that make sense to you. Don't buy something just because you want to. Instead, look for gift cards that you will definitely use in the next week or month. Don't stock up too much (you end up not using them!) Instead, define your needs, see how much money you need to spend and where, and then buy gift cards appropriately. Use the credits to bid on auctions.

Have you used YouNeverLose? Do you have anything to add to this YouNeverLose review? Drop a line!

Wednesday, March 14, 2012

Penny Auctions in India

Penny auctions in India are relatively new. However, the concept of penny auctions has been around for a long time now. It is no surprise that it started in Europe, spread and became popular in the US and is now looking for other markets like India. India has the third largest internet population in the world, and has relatively few restrictions, so expanding there would be easy. The hard part of course would be to get the critical mass going.

Penny auctions in India seem to follow the unique bid concept rather than traditional timer penny auctions. The sites that I found for penny auctions in India seem to have the lowest unique bid and highest unique bid. I got this information off of Adwords - the sites that are advertising through Google. There could be others that I am unaware of.

Lowest unique bid:
Highest unique bid:

However, in addition to the maximum number of bids, they also seem to have a timer, just to make sure that the auctions don't go on forever. This is a good idea provided there is a critical mass.

Lowest/highest unique bid auctions might be akin to gambling, at least in the US. This is one reason why we don't find many penny auctions with this model in the US. However, wither more relaxed rules in India, coupled with the fact that they are new and hence will probably not be regulated too soon, it is a nice strategy to explore for the penny auctions.

Do you know of any other Indian penny auctions? Are you from India and participate in penny auctions? What do you think about them? Do share your thoughts!

Wednesday, March 7, 2012

15 PennyGrab Free Bids/Credits

Get 15 PennyGrab free bids or credits as they are called on the site. PennyGrab always has exciting offers for penny auction bidders. You get bonus codes through emails that you can redeem when you buy bid packs within the month (which is fair enough, don't you think?) Now, PennyGrab has come up with another exciting way to get 15 free credits. Read the blog post. Basically, all you need to do is send your pic along with a testimonial to PennyGrab. The pic of course being you with your winnings.

This is a common strategy followed by a lot of penny auctions, including the largest ones like Quibids. It is also a simple win-win situation. The more people who submit their testimonials, the better people will trust the site. The bidders in return get free bids to their favorite penny auction sites. In fact, if it were up to me, I would sweeten the deal a little more and have at least 30 or so free bids, considering how PennyGrab frequently gives away free bids in any case.