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.

The greatest expense you’re going to incur in conducting a successful business is advertising.

You have to advertise. Your business cannot grow and flourish unless you advertise. Advertising is the “life-blood” of any profitable business. And regardless of where or how your advertise, it’s going to cost you in some form or another. Every successful business is built upon, and continues to thrive, primarily, on good advertising. The top companies in the world allocate millions of dollars annually to their advertising budget. Of course, when starting from a garage, basement or kitchen table, you can’t quite match their advertising efforts—at least not in the beginning. But there is a way you can approximate their maneuvers without actually spending their kind of money. And that’s through “P.I” Advertising.

“P.I.” stands for per inquiry. These kinds of advertising most generally associated with broadcasting, where you pay only for the responses you get to your advertising message. It’s very popular–somewhat akin to bartering–and is used by many more advertisers than most people realize. The advantages of PI Advertising are all in favor of the advertiser because with this kind of an advertising arrangement, you can pay only for the results the advertising produces.

To get in on this “free” advertising, start with a loose leaf notebook, and about 100 sheets of filler paper. Next, either visits your public library and start poring through the Broadcast Yearbook on radio stations in the U.S., or Standard Rate and Data Services Directory on Spot Radio. Both these publications will give you just about all the information you could ever want about licensed stations.

An easier way might be to call or visit one of your local radio stations, and ask to borrow (and take home with you) their current copy of either of these volumes. To purchase them outright will cost $50 to $75.

Once you have a copy of either of these publications, select the state or states you want to work first. It’s generally best to begin in your own state and work outward from there. If you have a moneymaking manual, you might want to start first with those states reporting the most unemployment.

Use some old fashioned common sense. Who are the people most likely to be interested in your offer, and where are the largest concentrations of these people? You wouldn’t attempt to sell windshield de-ice canisters in Florida, or suntan lotion in Minnesota during the winter months, would you?

At any rate, once you’ve got your beginning “target” area decided upon, go through the radio listings for the cities and towns in that area, and jot down in your notebook the names of general mangers, the station call letters, and addresses. Be sure to list the telephone numbers as well.

On the first try, list only one radio station per city. Pick out the station people most interested in your product would be listening to. This can be determined by the programming description contained within the date block about the station in the Broadcasting Yearbook or the SRDS Directory.

The first contact should be in the way of introducing yourself, and inquiring if they would consider a PI Advertising campaign. You tell the station manger that you have a product you feel will sell very well in his market, and would like to test it before going ahead with a paid advertising program. You must quickly point out that your product sells for, say $5, and that during this test, you would allow him 50% of that for each response his station pulls for you. Explain that you handle everything for him: the writing of the commercials, all accounting and bookkeeping, plus any refunds or complaints that come in. In other words all he has to do is schedule your commercials on his log, and give them his “best shot.” When the responses come in, he counts them, and forwards them on to you for fulfillment. You make out a check for payment to him, and everybody is happy.

If you’ve contacted him by phone, and he agrees to look over your material, tell him thank you and promise to get a complete “package” in the mail to him immediately. Then do just that. Write a short cover letter, place it on top of your “ready-to-go” PI Advertising Package, and get it in the mail to him without delay.

If you’re turned down, and he is not interested in “taking on” any PI Advertising, just tell him thanks, make a notation in your notebook by his name, and go to your next call. Contacting these people by phone is by far the quickest, least expensive and most productive method of “exploring” for those stations willing to consider your PI proposal. In some cases though, circumstances will deem it to be less expensive to make this initial contact by letter or postcard.

In that case, simply address you card or letter to the person you are trying to contact. Your letter should be positive in tone, straight forward and complete. Present all the details in logical order on one page, perfectly typed on letterhead paper, and sent in a letterhead envelope. (Rubber-stamped letterheads just won’t get past a first glance.) Ideally, you should include a self-addressed and stamped postcard with spaces for positive or negative check marks in answer to your questions: Will you or won’t you over my material and consider a mutually profitable “Per Inquiry” advertising campaign on your station?

Once you have an agreement from your contact at the radio station that they will look over your materials and give serious consideration for a PI program, move quickly, getting your cover letter and package off by First Class mail, perhaps even Special Delivery.

What this means is at the same time you organize your “radio station notebook,” you’ll also want to organize your advertising package. Have it all put together and ready to mail just as soon as you have a positive response. Don’t allow time for that interest in your program to cool down.

You’ll need a follow-up letter. Write one to fit all situations; have 250 copies printed, and then when you’re ready to send out a package, all you’ll Have to do is fill in the business salutation and sign it. If you spoke of different arrangements or a specific matter was discussed in your initial contact, however, type a different letter incorporating comments or answers to the points discussed. This personal touch won’t take long, and could pay dividends!

You’ll also need at least to thirty-second commercials and two sixty-second commercials. You could write these up, and have 250 copies printed and organized as a part of your PI Advertising Package.

You should also have some sort of advertising contract written up, detailing everything about your program, and how everything is to be handled; how and when payment to the radio station is to be made, plus special paragraphs relative to refunds, complaints, and liabilities. All this can be very quickly written up and printed in lots of 250 or more on carbonless multi-part snap-out business forms.

Finally, you should include a self-addressed and stamped postcard the radio station can use to let you know that they are going to use your PI Advertising program, when they will start running your commercials on the air, and how often, during which time periods. Again, you simply type out the wording in the form you want to use on these “reply postcards, and have copies printed for your use in these mailings.

To review this program: Your first step is the initial contact after searching through the SRDS or Broadcasting Yearbook. Actual contact with the stations is by phone or mail. When turned down, simply say thanks, and go to the nest station on the list. For those who want to know more about your proposal, you immediately get a PI Advertising Package off to them via the fastest way possible. Don’t let the interest wane.

Your Advertising Package should contain the following: 1. Cover letter 2. Sample brochure, product literature 3. Thirty-second and sixty-second commercials 4. PI Advertising Contract 5. Self-addressed, stamped postcard for station acknowledgment and acceptance of your program.

Before you ask why you need an acknowledgment postcard when you have already given them a contact, remember that everything about business changes from day to day—conditions change, people get busy, and other things come up. The station manager may sign a contract with your advertising to begin the 1st of March. The contract is signed on the 1st of January, but when March 1 rolls around, he may have forgotten, been replaced, or even decided against running your program. A lot of paper seemingly “covering all the minute details” can be very impressive to many radio station managers, and convince them that your company is a good one to do business with.

Let’s say that right now you’re impatient to get started with your own PI Advertising campaign. Before you “jump off the deep end,” remember this: Radio station people are just as professional and dedicated as anyone else in business—even more so in some instances–so be sure you have a product or service that lends itself well to selling via radio inquiry system.

Anything can be sold, and sold easily with any method you decide upon, providing you present it from the right angle. “Hello out there! Who wants to buy a mailing list for 10 cents a thousand names?” Wouldn’t even be allowed on the air. However, if you have the addresses of the top 100 movie stars, and you put together an idea enabling the people to write to them direct, you might have a winner, and sell a lot of mailing lists of the stars.

At the bottom line, a lot is riding on the content of your commercial—the benefits you suggest to the listener, and how easy it is for him to enjoy those benefits. For instance, if you have a new book on how to find jobs when there aren’t any jobs: You want to talk to people who are desperately searching for employment. You have to appeal to them in words that not only “perk up” their ears, but cause them to feel that whatever it is that you’re offering will solve their problems. It’s the product, and in writing of the advertising message about that product is going to bring in those responses.

Radio station managers are sales people, and sales people the world over will be sold on your idea if you put your selling package together properly. And if the responses come in your first offer, you have set yourself up for an entire series of successes. Success has a “ripple effect,” but you have to start on that first one. We wish you success!

So, you want to start a home based business. Well, you are certainly not alone. Millions of individuals scour the internet every month searching for legitimate home based businesses with the dream of making it big and leaving their jobs. Every day, someone is thinking, “There must be a better way,” or “Please help me quit my job,” or “I want to work from home.”

Today, many people are afraid. They are fearful of their economic futures, and the term, “This Economy” is spoken everywhere, and not in a positive light. What this means is that there are a lot of people struggling to make ends meet. Many are hoping for an economic miracle. Others have decided to start a home based business to help improve their situation.

Before you act on the impulse to start a home based business, there are a few things to consider. Let’s examine two major “red flags” indicating that you are NOT ready to venture into the world of the home based business entrepreneur – and what you can do to change the situation.

Red Flag #1: You feel desperate. You don’t make enough money. Perhaps you hate your job, and you’ll do anything to leave your current job situation. Or, you may be afraid you are about to lose your job.

Why this indicates that you are not ready: If you are feeling desperate and miserable, this is not a good time to start a home based business because you will carry that feeling of desperation into your search for a legitimate home based business opportunity. And instead of calmly weighing the pros and cons of various serious and profitable opportunities, You will be more likely to act out of desperation, falling for “get rich quick” scams – probably more than one – and spending your already hard-earned money on something that you feel will be a quick fix to your situation – that “magic bullet” that, frankly, does not exist.

How to change the situation: The first thing to do is calm yourself, and look at where the feelings of desperation come from. What can you change in your own attitude to make your job more bearable while you search for a profitable home based business? Instead of feeling angry and desperate, can you teach yourself to see the positive in your situation?

For example, if you already have a job – even if it’s not a great job – you could be thankful that you have a source of income that can help you save up for the right opportunity. You could sit yourself down and take full responsibility for where you are – after all, you made the decisions that led you to where you are now, and you can now make decisions to take another direction, if you choose. Just do it rationally, and without emotion. Release your feelings of desperation and hate – those feelings are not who you are. You are a lot bigger than that! There are plenty of places online to learn the techniques that can help you change your own outlook. Use search terms like “self development resources” or “self development techniques,” etc.

Red Flag #2: You are broke. You have debts you cannot pay, and you think that if only you could start a home based business, that this will cure everything.

Why this indicates that you are not ready: I don’t care whether you think you’ve found the Holy Grail of home based businesses. If you are already in deep debt, you will go further into debt. Why? Because being in business for yourself costs money. Even if you have a paying job, and just want to start something on the side to help pay your debts, if you are unable to stay current with your payments, you will not be able to get the credit or financing that you might need to get your home based business off the ground.

Running a business costs far more than the “5 to 10 hours per week” that so many business opportunities tout as being all that’s necessary to succeed. Scheduling your time commitment is only one part of the equation. You need to schedule your money commitment (aka “budget”) too.

How to change the situation: First of all, understand at the get-go that if you intend to start a home based business, you WILL need to spend money.

Stop searching for “free home based business opportunities,” or “easy home based business,” and get real.You don’t get anything for nothing. Ever.

So, before you decide to jump into a home based business, decide how much you can save for your start up costs which will undoubtedly include advertising, website hosting fees, months of carrying your business before the search engines begin to recognize you, and qualified buyers begin to find and visit your website.

If you are truly passionate about starting a home based business, then you will do what it takes to pay down your debts and begin to formulate a logical plan to undertake a serious home based business venture.

Until that day, you are not ready.

Depending on the type of home based business opportunity you are looking at, you can probably find others who are already active in the opportunity what type of budget is necessary to maintain the effort until you begin to earn profits.

Finally, you may be saying, “But, I really AM passionate about starting a home based business! Where can I get the money?”

This oft-asked question has a relatively simple answer – but unless you have the strength, determination, and self-discipline to do this, you won’t do it.

And this is where the rubber meets the road.

Here is the answer (drum roll please): Sell your stuff. Get rid of it. Sell on eBay. Sell on CraigsList. Have a yard sale – have more than one yard sale. Just sell your stuff.

Most people have far more stuff than they need. Do you REALLY need 10 pairs of shoes? How about that (Heaven forbid), that “Wii” you just had to have? How about your collection of collectible bears, NASCAR, purses, Goth skulls, or electronic do-dads?

How badly do you want to start a home based business? How badly do you want success? Sell the TV – or at least one of them (it’s a huge time waster anyway).

Sell the 4×4 SUV that you really don’t need to begin with. If you have kids, get them on board with you – kids are great dreamers and the thought of better stuff might nudge them in the right direction.

What else can you do? Stop spending needlessly. Buy your clothes from thrift stores instead of the department store for a while. One person we know plans “treasure hunting” trips to thrift stores with her kids – it has become a fun game, not a deprivation. Do you really need that new handbag? Do you really need that piece of jewelry? Brand name versus generic? And on, and on…

If the last few paragraphs offend you, and you cannot bear to 1) part with your stuff and/or 2) stop buying more stuff in order to realize a dream, then you are not passionate about starting a serious home based business opportunity. That’s just the way it is.

But… If you felt your heart begin to pound just a little when you thought about possibilities instead of limitations, if you felt hope instead of desperation, faith instead of fear – then, my friend, you WILL find a way – not only to START a home based business, but SUCCEED.

Copyright (c) 2009 Kathleen Tremblay

Kathy Tremblay’s passion for internet marketing stems from years of non-traditional living: from working at a Colorado guest ranch, to cycling in New Zealand, and working in Antarctica. Life in a cubicle is just not for her.

A terrific collection of tools to help you achieve your dreams is available at www.StrategiesForSuccessInLife.com [http://www.StrategiesForSuccessInLife.com] which is THE resource for the renowned Charles Haanel’s Master Key System – the very system Kathy has used to plan and meet her own goals.