3 Common Penny Auction Misconceptions

beezid - To really win big, you need to stay away from the common penny auction misconceptions and adopt the strategies that really work. Unfortunately, when you try to search for the right penny auction strategies, a lot of information is provided by people who do not have adequate experience in this field. Trying to devise strategies for this auction model without getting involved backfires because there are just too many factors at play.

Here, you will be exposed to the common penny auction misconceptions and how you can avoid them. These traps are commonly found on the internet, which explains why so many people fall for them in the first place.

Penny Auction Misconception - 1: First Win Bid Vouchers
This is the most common penny auction misconception out there and there are too many people propagating it. No wonder that so many newbies fall for this. Bid vouchers are good in theory - you can multiply the bids that you have. However, bid vouchers can be extremely competitive. This is the case with almost every site that you see. In the end, remember that there is just one winner, so your chances of winning bid vouchers is minimal. You will have to spend many bids in trying to win them, and thus lose out overall.

beezid - Worse, bid voucher bids do not count towards the Buy it now feature that many penny auctions have. This feature is essential to minimize the risk associated with this auction model. If you fail to win an item, you can use the money spent on your bids towards buying the item at its full retail price. This eliminates the risk as you either win a huge discount or buy the item at its retail price. If you spend your bids trying to win bid vouchers, these bids are useless towards the buy it now feature.

Penny Auction Misconception - 2: Wait Till the Last Moment to Bid
This is another common mistake that is made by newbies and is propagated through videos claiming that you can win 100% on penny auctions. These are simply not true. In fact, the theory of penny auctions involves optimization and game theory and there is really no “right” strategy to win. In the end, the winner is determined not just by his behavior but also by the behavior of the other bidders.

So why is waiting till the last moment bad? Simply because the other bidders will never be afraid to outbid you. Actually this strategy can work well for certain items but not in the majority of the cases. The game of penny auctions is all about trying never to be outbid. This means you need to appear strong and willing to outbid everyone else. If you wait for the last moment, no one will believe that you have what it takes to outlast them. In many cases, you simply need to be aggressive and scare away the competition. This is not the economics of the auction but the psychology of the auction.

Penny Auction Misconception - 3: Bid Only on Established Sites
True, if a site is established, you can feel safe bidding on it. It is also true that there are several scams out there that you need to be aware of and avoid like plague. However, it is the new penny auctions that give the best chance of winning. This is not surprising because they are less crowded and therefore much less competitive than established sites like Quibids or Beezid or BidHere.

beezid - You will need to be careful in selecting the new auction sites, so do your research reading reviews about the site. In some cases, I will advice you to simply take the risk because when the site is starting out, it is so much easier to win auctions.