WHAT IS A PENNY AUCTION?

Penny auctions have exploded in popularity with the massive growth of the internet. However, few people know the true origins of penny auctions.Beginnings actually stretch back to the Great Depression. Those were hard times for everyone, but even harder for farmers. Farmers struggled to bring in steady income because of droughts and crops not selling as well as they had previously. As a result, the banks would foreclose on the farmers who couldn’t keep up with their mortgage payments.

The banks weren’t satisfied with just repossessing the house, they wanted to raise as much capital as possible, so they resorted to selling off the possessions of the owners of the repossessed houses. There was not much the farmers could do about it so they began bidding ridiculously low prices, pennies, on the items while threatening others who dared to bid higher than a few pennies.

The auctions of today hardly resemble their tremulous beginnings. Being part of a penny auction today is exhilarating, fun, and addictive. It combines the selling format of auctioning with a little bit of chance factored in.Auctions are a game of strategy but also a game of luck.

The premise behind penny auctions is giving people the chance to win an item at a drastically reduced price.Auctions make that possible by spreading out the cost of the product among multiple bidders. In order for a person to take part in an auction, they must pay a set price for each bid. For example, if a person wanted to bid on a fifty dollar Amazon gift card then he would spend a dollar for each time a bid placed. If he ended up winning the gift card, then he would only have spent a few dollars for a fifty dollar gift card. Usually penny auctions sell bids in packages.

HOW PENNY AUCTIONS WORK!

The main foundation of penny auctions is the pay-per-bid format. It is the key that allows bidders to win items at the fraction of their retail value and allows the auction owners to keep their site profitable. Most y auction sites run on the same premise: people pay a set amount for each bid, whenever a person places a bid within the closing seconds of the auction time will be added, the last person left with a unique bid after the clocks runs out will win the item. There are a large variety of items that can be won, but they tend to be popular electronics or gift cards to popular stores.

There are two types of auctions: lowest unique bid auction and highest unique bid auction. Lowest unique auction sounds confusing but it is actually quite simple. A unique bid is when only one person has a bid at a certain price. Bids usually start at one penny, a bidder can then place a bid at two pennies. Until another bidder places a higher bid, the most recent bidder will be the lowest unique bid because that was the only bid at two cents and nobody bid higher. However, penny auctions generally don’t stop at one penny. It is not uncommon to find auctions that end up at a couple hundred dollars based on the popularity of the item being auctioned. However, the same principles apply for those auctions. Highest unique bid auctions follow the more traditional auction format such as eBay. The person with the highest bid at the end of the auction wins the item.

Auction site owners turn a profit by selling bids. Say twenty people are bidding on a ten dollar gift card at one dollar per bid, at the end of the auction if there were twenty bids placed in total then the site owner would have made twenty dollars with a ten dollar profit.Auctions do seem like a win-win situation:The site owner makes money while the bidder gets an item for dirt cheap. However, not everyone wins in penny auctions. The people who paid one dollar each bid but left with nothing to show for their investments will not be so happy.

HOW TO WIN!

Penny auction has a lot of chance mixed into it, but one can incorporate strategy that will help raise the chances of winning. Playing smart can make all the difference between gambling and auctioning.

The first crucial tip to winning penny auctions is to know how to manage your bids. Your goal should be to win as much as possible without spending a ton of money buying bids. Managing your bids means that you should already know how much you are willing to risk in order to win an item. The amount of capital you are willing to risk will determine how many bids you can use. Once you know how many bids you have to spend on an item, then you will be better able to manage how and when you place a bid. That will keep you from blowing away all of your bids in the first few seconds of the auction.

The next tip is to practice time management. When fighting in the trenches of penny auctions, you have two enemies: other bidders and time. Knowing when to bid is a must if you want to have success. Placing a bid when there is a lot of time left on the clock is never a good idea. You have to remember that the key to winning a penny auction is being the last one standing when the clock runs out and that each bid increases the amount of time left. It would be a good practice to wait until the last few minutes of the auction before you begin to bid.

The final tip for successful auctioning is to keep your emotions under control.Auctions have a lot of similarities to gambling, and just like gambling, your spending can get out of control. If you keep your emotions level, it will keep you from making rash decisions and blowing loads of cash. Keep your mind clear so that you can gage the behavior of the other bidders and outsmart them.

HOW TO AVOID SCAM SITES!

Penny auctions are a great addition to the web whether you want to win an item that otherwise you wouldn’t be able to afford or if you simply enjoy the thrill that comes with bidding in auctions. Unfortunately, scam sites have tarnished the reputation of the legitimate penny auction sites. However, there are ways that you can protect yourself from scamers and enjoy your auctioning without having to worry about losing your money due to dishonesty.

Checking the reputation of the auction site before you start spending your hard earned money is always a good idea. Chances are other people have tried the site before you and some of them have left reviews. The reviews are your way to gage whether a auction site is trustworthy or not. If a site is getting overwhelmingly negative reviews, then that is a clear indication that you should steer your business elsewhere.

Another tool you can use to protect yourself is checking the Alexia ranks of the auction sites. Alexia rank will give a solid view of how much traffic the auction is getting. If you see a huge difference in the amount of traffic Alexia is projecting and the amount of active bidders on the site, then warning signals should be ringing in your head. Some auction sites have been known to set up robots that automatically bid on projects in order to keep the auction going and inflate the price. That is known as shill bidding. You can sniff out those sites by comparing the traffic the site should be getting to the amount of users using this site.

CONCLUSION!

New legislation may come out later down the road that will officially make penny auctions gambling, but until then, it is a fun, exciting auction that allows one to win the item they’ve always wanted but couldn’t afford.Auctions are also quite lucrative for the site owners because of the pay-per-bid strategy they’ve incorporated. Penny auctions had humble beginnings with farmers who just wanted to get back at the banks who kicked them out of their house. More recently, auctions have enjoyed an explosion in popularity with the rise of the internet.

There are two main formats fora auctions, lowest and highest unique auction, however they both run on the same premise where the last unique bid wins the item. Winning a penny auction will require a certain amount of mental tactic and a bit of luck. However, you can increase your odds of winning by practicing certain techniques such as managing your bids wisely, learning how to work with the time, and keeping a level head and your emotions under control. When you combine those three strategies to your bidding plan, you will find that you win a lot more often.

It is important that you do your due diligence to protect yourself when participating in auctions. Not every auction is run by honest and trustworthy people. There are people out there who just want to take your money. You can protect yourself by ensuring that you only bid on sites that already have a very positive reputation from real users.

On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.

Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.

Real Estate Auctions Work in Up or Down Markets.

Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.

The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.

When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.

Evaluating Your Real Estate for Auction

Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.

Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.

Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.

Locate a Qualified Real Estate Auctioneer

Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.

Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.

You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.

Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.

Types of Real Estate Auctions

Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:

Absolute Auction

The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.

Minimum Bid Auction

Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.

Seller Confirmation or Reserve Auction

With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.

I know one business owner who hired a content marketing agency because he wanted to build his business.

The agency said it would bring in over a dozen inbound leads per month.

After four months of preparation and two months of releasing content, he ended up sacking the agency because it had not brought in a single lead.

Of course, he’d already spent several thousand pounds with them by then.

So how do you avoid this happening to you?

Tip #1: Understand what content marketing is

At its simplest, content marketing is a way of proving you are an authority in your field.

It makes you more credible: people are more likely to choose you before others.

This means giving people advice so that when they decide they need a product like yours, they’ll think of you first and get in touch.

For example, you might sell an IT system that helps companies comply with health and safety legislation.

If so, it makes sense to offer advice on how the latest legislation is likely to affect them, the trends in the industry, and so on.

In the old days, this was simple. You struck up a relationship with someone in your relevant trade press – or the local press – and wrote articles for them.

That’s still an option. But now you can also get your information out via a blog, downloadable reports on your website or an email subscriber list.

And that’s not even mentioning the various social media.

Then there’s the question of how often you need to create content.

This leads to some important questions:

Do you know your market well enough to write about it convincingly? If not, you need to hire someone to do it for you and they will not come cheap. Come to think of it, if you don’t know your market, you won’t survive long anyhow. And come to think of it again, many peoples’ idea of what their market is turns out to be spectacularly incorrect.

Do you have a clear idea of how best to reach your market? Yes you can write a blog, but if your customers prefer to read the trade press then blogging won’t help you. And if nobody reads your blog – often the case – you’re wasting time anyhow.

Do you know how often you need to put information out? Once a quarter? Once a month? Once a week? Once a day? There is no fixed rule. You need a feel for what will interest your customers – otherwise you can end up wasting a lot of time and money putting out useless content. And you need to be constantly thinking what will interest them. Every time you think of something, communicate.
Tip #2: Don’t believe the hype

Unfortunately, content marketing – indeed virtually all marketing today – is based on fallacies.

The biggest fallacy: that customers are fundamentally different today to how they used to be.

Well, after 54 years in marketing I can tell you that’s rubbish.

Customers today are no different to how they were when I started in this industry in the 1950s. All that’s changed is that there are far more media you can use to reach them.

Statistics are bandied about ‘proving’ that people now have fearfully short attention spans, when actually they always did. With advertising in a newspaper (for example) you only had split seconds to grab someone’s attention before they flipped the page.

If you don’t understand people, and realise that people have not fundamentally changed, you will lose money with your marketing. It’s that simple.

But from the idea that people now have the attention spans of goldfish, many agencies will point to studies showing that people don’t like to have their day disrupted by advertising. They find it annoying.

Let me assure you that people have always found bad advertising annoying. This also hasn’t changed.

Marketing people love easy answers. They yearn for a world where one particular approach – the one they specialise in – will solve all problems. And they are good at proving it to you.

If you don’t apply a little logic you can end up losing a lot of money.

An agency may show you that more money is now being spent on marketing to attract inbound leads rather than outbound leads.

They tout this as proof that inbound marketing is more successful.

However, what they won’t do is show you the revenues generated by inbound versus outbound; only how much is being spent.

As you’ll have worked out already, that’s like saying a Mercedes ad campaign is more effective than a Volkswagen one because Mercedes spent five times as much.

There is precious little proof that inbound marketing is more successful at generating leads or sales. And that should be all you care about.

Tip #3: Find out what works – and copy it

There is no doubt that content marketing does work if used correctly. Here are some examples.

Serial entrepreneur Neil Patel runs three blogs. Each one has over 100,000 regular readers and they are the number one source of customers for his various businesses.
Almost all of consulting coach Ian Brodie’s new customers now come to him as inbound leads.
US information publisher Agora runs a number of daily email newsletters to generate new business.
What do these three have in common?

Each uses the same technique as the cornerstone of their content marketing.

When you visit one of Neil Patel’s blogs, for example, you get a pop up offering you a free report in return for your email address.

If you choose to delete the pop up, you get taken to a page with another sign up box asking you to subscribe to his emails. Only once you get past that do you get to read the blog.

Similarly, at the top of Ian Brodie’s homepage is a sign up box offering you a free report in return for your email address.

And as I’ve already indicated, Agora’s content marketing model is based entirely on getting you to sign up for one or more of its email newsletters. It offers at least half a dozen different ones, depending on your interests.

Examples are all around you when you look for them – even from so-called social media experts.

Mari Smith is a renowned Facebook ‘guru’, yet when you go to her homepage what’s the first thing you see? An email sign up box.

It’s the same for Pinterest ‘guru’ Melanie Duncan. Go to her homepage and the first thing she asks you to do is not to find her on Pinterest – it’s to sign up for her regular email updates.

In fact, you have to negotiate three pop up boxes asking you to subscribe before you can get to the homepage itself.

Why do they all do this?

Because getting people to subscribe to your regular updates is a tried and tested method of increasing sales. Subscribers have opted in to receive your news and advice, so they are more likely to read the content.

And of course, for every few emails offering advice, they slip in one selling something. Or they get you to return to their website or go a landing page that tries to sell you something.

Pop up boxes are surely just as annoying as any other form of disruptive marketing.

I’ll bet that if you asked the visitors to these websites whether they found it annoying, they would say yes. And yet they work.

Tip #4: “Don’t forget the marketing in content marketing”

If you look up the Content Marketing Institute, it tells you that content marketing is “the art of communicating with your customers and prospects without selling. Instead of pitching your products and services, you are delivering information that makes your buyers more intelligent.”

The italics are mine. Just think about what they’re saying here for a minute.

That you should be sending out information without actually asking people to buy? Does that really make sense?

From spending millions of my own money – and God alone knows how much of my clients’ – I can tell you it doesn’t.

Trying to sell without selling is just plain stupid.

People are not thinking when they get your stuff. Even if they are intelligent – which many aren’t in the first place.

The entire premise of this kind of content marketing is that people don’t like being sold to. In research they say they prefer articles and white papers and that stuff.

What they think they prefer and what they do have nothing to do with each other.

What works and what people like are two different things.

What they need and what they think they want are two different things.

The quote that forms the heading for this section comes from Neil Patel, who points out that producing content is not enough if you don’t promote it.

Bill Bonner, the founder of Agora, recently explained that, though it may not seem like it, a daily email in which you don’t sell anything is really just part of a bigger strategy to bring home a sale.

As Agora copywriter Glenn Fisher says, “People who like modern terms call this content marketing, but it’s not.

“Content marketing is just a buzz phrase to describe something that’s always existed: it’s just plain old long copy.”

The guys at Agora should know. While there are several estimates around of how much the company makes each year, the most conservative figure is $90 million.

If you try to sell without selling, then guess what?

You won’t sell anything.

Tip #5: Know what your customers need

I can’t stress this enough.

Most of the content marketing I see that fails does so because those producing the content do not know enough about the market they are writing for.

As a result, they get it wrong in two major ways:

They write content that’s too shallow, of the teaching-granny-to-suck-eggs variety. Telling your customers what they already know is not the way to look authoritative.
They write content that doesn’t speak to their customers’ or prospects’ concerns.
You must know what your customers are thinking and worrying about – and write about them. This means you need to do your research. Don’t just read reports on the state of the market, or articles in the trade press.

Speak to your customers directly – or at least some of them. And do so with an open mind. Otherwise your content will never move them to want to act.

If you’ve decided you want to launch your own content out into the market, here’s what you need to do.

Research any agency you consider taking on. You wouldn’t hire someone without checking their references, so do the same if with an agency. Talk to their clients about results – and also what it’s like working with them.

Think about hiring a specialist. Many companies hire trade journalists or copywriters with a specialist niche to write their content, whether in house or freelance. Just bear in mind that real specialists do not come cheap.

If you try to get them cheap, they won’t stay long enough to have an impact. Resist the lure of false economy.

Know your market – and make sure anyone writing for you does too. If you don’t, your content will fall flat. So take the time to research this first. Only if you know the market can you test whether any agency or copywriter knows enough to write good content.

Know what you want to achieve. Many companies jump into content marketing just because everyone else is. Resist this urge. You can do well without content marketing and focus on outbound marketing instead.

But if you really want to make the jump, set achievable goals. Whether that’s leads per month or percentage increase in sales, be sure to measure. And be realistic.