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Penny Auctions: The Future

April 14, 2012 | Comments: 0 | Views: 176

What is the future of the penny auction industry? This is a tough question to answer, but let us look at trends and future possibilities. The last few years have seen the rise and subsequent bust of penny auctions. When they started in the United States, they took the online world by storm and had a huge surge in the number of members joining each day. That was the honeymoon phase for the industry. Obviously it didn't last.

A lot of sites began using unethical techniques to advertise. Worse, some were outright scams by employing shady business practices, shell-bidding to drive up prices and deny their members a chance to win or just outright misleading advertising. This gave a bad name to the industry as a whole and didn't do any good to the ones that were legitimate and genuinely run by people who wanted consumers to save while making a profit. Plenty of penny auctions closed shop in this phase.

After this, only the best survived. Today, there is a clear downward trend in terms of number of new bidders. As a result, businesses don't see this as an easy money-making scheme anymore and they are forced to see that penny auctions are a genuine business opportunity and like any business, need initial capital, time and commitment from the owner. This is the only way to attract shoppers who will remain loyal.

This new phase has also given rise to a number of new innovations. For example, the rise of the so called "timerless penny auctions" has been a good sign for bidders who don't like traditional auctions and the concept of timers that are employed. These help cater to another class of bidders who will spend more and be more assured of a win, so that overall they can save money instead of losing.

So where does the future of the penny auction industry lie? I believe it lies in genuine businesses that survive through a reputation of being good for consumers and who are in it for the long run. Look at Quibids, which is now the largest penny auction in the world. It didn't opt for short-cuts at all, and while some times overtook it for a small time, in the end, it was Quibids which reigned supreme. This is how businesses win in the long term.

For smaller sites, they need to consider innovating. How are they different from other similar sites? If your idea is like Quibids, why should I ever go to your site with trust issues when I can do the same at a site I trust more? You need to think in terms of the users, not your own profitability alone.

The positive thing is that a few new penny auctions are indeed innovating, especially the ones that are looking to make the timerless penny auction model become more popular.

From a bidder point of view, you need to understand all the different types of penny auctions that are out there, so that you really know and understand what is best for you. What do you like? What is your bidding preferences? What is your risk tolerance and how much risk do you like to take? These are just some of the questions that you need to answer before going ahead with joining new sites and trying out the waters again. Remember to study the new models as well.

Learn about the different types of penny auctions so that you know what best suits your bidding style and how you should choose new penny auctions to bid on. By learning about this information, you will be better equipped to understand how timerless auctions work, so that you now have a great alternative to the traditional model. It is also important to know about penny auction reviews which is very important because you need to know which sites are legitimate and genuine and which ones are not.

Source: EzineArticles
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