Penny Auction Strategies to Help You Beat the Competition
For many, penny stocks are synonymous with the word “scam.” Participants of penny auctions are able to bid on high priced items for a small per bid fee, and oftentimes, they are able to win the item for an extremely low price. It can sound too good to be true, and in most cases, it is. However, there are also legitimate penny auction sites that take the customer into consideration. Furthermore, in order to ensure that your participation is as fair as possible to you, there are certain strategies and things that you can be aware of to mitigate being scammed.
One of the most beneficial actions that you could take before beginning to bid is to be aware of the “bid fee.” While each bid is going to raise the total cost of the item by 1 penny, you are also required to pay a fee to bid. Bid fees typically range from $0.50 cents to $1.00 per bid. So, if the bid fee is $1.00, you are really paying $1.01. In terms of whether a high or low bid fee is the most ideal, it is typically up to your own preference. A low bid fee means you can bid more, it drives up the price of the item, and more bidders typically flock to items with low bid fees. On the other hand, a high bid fee may mean that you place fewer bids, fewer bidders participate, and the price of the item stays relatively low.
Small Ticket Items
If you are just starting to participate in penny auctions, your strategy should be to aim for small ticket items. Small ticket items are usually gift cards, small electronics, and so forth. What is great about trying to bid on these items is that there is little competition, and the less competition there is, the higher chance you will have of winning the item. However, keep in mind the bid price and the number of bids you are placing. You do not want to place most of the bids, nor do you want to pay a large fee that will override the cost of the item itself. Be tactical.
Slow and Conservative
One great strategy that is pretty effective is to bid during slower hours and be conservative when bidding. You should try to determine when the slower hours are on the penny auction sites. Slower hours mean fewer bidders, but still enough that you aren’t one of two or three people bidding on an item. When you find an item that you like during slow hours, start to bid conservatively. All you want to do essentially is to give other bidders a signal that you are present. As bidding becomes more heated, you should be more aggressive. Aggression will typically fend off other bidders, most likely resulting in you winning the item.
Aside from the above strategies, there are also a few smaller strategies you can employ. They are serious, so you should take them to heart and apply them, as not doing so can be very costly to you.
- Know the Site Rules: Here you will find hidden fees, shipping cost, price per bid, promotions, win limits, and bidding limits.
- Do Your Research: Many bidders tend to overlook how necessary research is. For every single site that you are bidding on, verify it. Research bidder reviews and see what other previous bidders have to say about the site. Most likely, if the site is a scam, you’ll be able to find out.
- Buy Now Button: It’s tempting, we know. If you’re seriously consider buying the item instantly, check the price. Too often the “buy now” price is over inflated and you end up paying more for the item than it is worth. Also take into account to add the cost of your previous bids on the item, the bid fee, shipping cost, and end bit fees. Does “buy now” really still seem like a good option to you?
Penny auctions can be fun, engaging, and highly competitive. You can even win sometimes. However, don’t lose sight of how to bid safely, how to avoid scams, and how to keep your wallet intact. Penny stocks are meant to provide you with items at extremely low prices. They are not meant to fill you with regret when you end up burning a hole through your wallet by not using safe strategies.