How to start a penny auction. 5 important things to know
It’s not a secret that penny auction is a special type of auction where participants pay a non-refundable fee to place each small incremental bid. The auction ends after a set period of time if there are no bids; the last participant who places a bid wins the item and also pays the final bid price, which may be significantly lower than the retail price of the item. Auction operator usually makes money by two ways: charging fees for each bid and the payment for the winning bid. Usually the final income exceeds the price of the product which is very beneficial.
Well-known fact is that penny auctions have been popular all over the world for decades. Even bad reputation gained by many scam examples of penny auction did not affect its popularity. So every year, especially when there’s a vivid economic recession penny auctions spring up like mushrooms after the rain.
Everybody dreams of the most lucrative auction that brings profit, but only few can really achieve this goal. In order to know how to to start penny auction, survive in the ocean in look-alike websites and remain a success one may need the following pieces of advice:
Marketing is the king.
Think over the thorough marketing strategy at all stages of auction project life, including initial stage, launch of penny auction, boosting the project and user retention stage.
You need to get buzz around you auction even before launching the site. Social networks suit best of all for that. You get the opportunity to get particularly targeted for your business audience there. Apart from that SEO/AdWords is also an effective traffic method and there are other methods that can be used like CPA, blogging, social promotion and other networks. Think over the thorough marketing strategy at all stages of auction project life, including initial stage, boosting the project.
Software is the “queen”.
Auction owner needs to be sure that he has proven, fast, stable and easy customizable penny auction software. More important is to be sure that software provider will accompany the license to their product with constant updates of the system which allows you to be at the cutting edge among all auction owners. This always brings you a couple of steps ahead of the competitors.
Make sure that you provide fair and sincere business taking care of your customers. Dishonest auction owners always loose, sooner or later. It’s easily seen at the examples of all those penny auctions that are closed. Follow the best examples in the field, copy the best working ways to attract and retain your customers.
Think carefully what kind of products you sell and what means of delivery you use. Plenty of high-quality products on demand along with the number of convenient delivery methods will put the crown of a penny auction king on you. The choice of the products depends on the region you are operating in and the targeted audience. And of course remember that gadgets, TVs and other electronics are the best products to sell at penny auctions.
What concerns delivery, there’s a very useful tip – you do not need to stock up all the products. You can use the services of dropshippers who can handle the stock for you. Otherwise you can purchase the products daily which prevents you from the excess product leaveouts.
Talk to your customers all the time; don’t leave them without attention for even an hour. Every step of the user requires caring and unobtrusive backup and help. Create “How it works” page, add tooltips at the most important or ambiguous places at your website, and turn on the internal communication system. Nobody can also deny the importance of live chat or forum integration where users can share their concerns, problem issues, successes with each other or directly with the auction administration.
Of course there are much more steps to follow on the way to the great and successful online auction. But the mentioned above ones are those essentials without which it’s impossible to start and manage the auction. Without understanding of these things one won’t be able to build its customer base ever, as well as get income and be a happy owner of the online penny auction.