Not all penny auction sites are created equal!

There are many types of penny auctions out there. It can be a little confusing to the novice penny auction bidder, so we will attempt to explain and define the different types of penny auction formats that you may encounter within the industry.

Traditional Penny Auction: A bid-fee auction, where bidders pay per bid, usually buying bids in what's known as a Bid Pack. Bid prices can range from $.30 to $1.00/each, depending on the site. With each bid placed on a traditional penny auction, a bid is deducted from the bidder's account, and the price of the auction rises by one penny. Each bid also increases the timer by a set increment, so that others can place their bids, too. This usually sparks a "bidding war" as the timer counts down. Whomever has the last bid placed when the timer reaches "0:00" is the winner. When a bidder wins an auction, they are "out" the cost of each bid, plus the final auction price and any shipping/handling fees.

Beginner Auction: An auction in which brand-new bidders who have not won an auction, or who have won less than a set amount of auctions, may participate. These auctions are clearly marked and are for beginners only.

Reserve Auction: An auction in which the site owner reserves the right to establish a reserve price; that is, the lowest price they will accept for the item. In the case that the reserve price is not met, the site owner will refund all bids placed, withdraw the auction, and re-list it in the future. In some instances, a reserve auction will have a count-down timer that does not start running until the set bid price (reserve) is hit. In other cases, reserve auctions are "timerless", and once that set bid price is hit, the auction closes. Reserve auctions typically show a price range; the area between which the reserve is set. The auction may start at any price between this range. These auctions types are exciting because a bidder may place one bid, hit the reserve, and win! Remember that all bids placed will be lost if someone else hits the reserve and the auction ends, so bid as aggressively as you are comfortable with.

Hidden Random Reserve Auction: An auction in which the site owner does not establish a set bid price; instead, a Standard Randomizing Formula, called a PHP RAND Function, is used to pick the auction end price, based on the range set by the auction owner. As soon as the reserve is met, the auction will either end abruptly, or a short timer will begin counting down and a traditional penny auction format will be in place. The only site that utilizes this format at this time, to our knowledge, is SpeedyFinger.com.

Free-to-Bid Auction: An auction in which bidders may place as many bids as they wish, and upon winning, the bidder only pays the final auction price. You do need to have bids in your account, which could have been purchased or rewarded beforehand.

Free Bidding w/ Subscription: Sites like HogItUp.com, offer auctions where bidding is completely free and unlimited, and the consumer only pays a daily, weekly, or monthly subscription fee. For example, a 30-day Subscription is typically $20. When you purchase this subscription, you are permitted to bid on any auction within that time-span, and with however many bids you wish. If you win an auction, you only pay the final ending price, plus any shipping/handling fees. These auction types do function like a traditional penny auction site; the only difference is the subscription fee required to participate.

Free Bidding w/ Auction Unlock Key: An auction in which bidding is completely free and unlimited, and the consumer only pays a small fee for participating in a given auction. PulseAuction.com utilizes this innovative format. In order to participate in PulseAuction auctions, the proper Auction Unlock Key is needed to "unlock" (participate) the auction. Auction Unlock Keys range in price from $1 to $25. Next to each auction item, you will see an image of a key and a key amount that indicates what is required to unlock the auction. You must have an Auction Unlock Key that matches the dollar amount shown on the item in order to  begin your bidding. For example, a $25 Gift Card Auction will require a $2 Auction Unlock Key. Once you have the correct Key in your account, when you  place your first bid, the Auction Unlock Key will be deducted from your account and the auction is now unlocked – you’ve  just opened the door to unlimited bidding at no additional charge on that specific item.

Closed/Inner-Loop Auction: An auction that can become a Closed/Inner-Loop Auction at any time. To bid on Closed/Inner-Loop Auctions a bidder must have previously placed a single manual bid on that auction before it became a Closed/Inner-Loop auction. All other restrictions will still apply, but after becoming Closed/Inner-Loop Auctions, only those who have bid on the auction will be able to bid. To our knowledge, BargainsAndFun.com is the only auction site to utilize this format.

Buy It Now (BIN) Auction: An auction in which the site allows you to apply the value of bids placed towards purchasing the product at the Buy It Now price listed, plus any shipping/handling fees.

Nail Biter Auction: An auction in which auto-bidders are not to be utilized. Bidders must bid manually; that is, they must be at their computer, manually clicking their mouse in order to bid.

Blind Auction: An auction in which the identity of all participating bidders is obscured by the use of an assigned random number or name. Random numbers and names are typically changed after the auction closes so that the next Blind Auction will have different numbers.  After the auction closes, the usernames will be displayed, so any bidder who participated in the auction will be able to see the history of all bidders and bids placed.

Seat Auction: An auction in which all participating bidders must purchase one of a limited number of "seats" that are available for special auction products. For example, a site designates 50 seats to an auction. Once we have 50 seats  have sold, the auction is closed. Participants are then informed of the time and date the auction will start. On that date and time, the bidder logs in, and when the auction opens, the bidding begins. The bidders receive an unlimited number of bids with which they use to continue the auction. The winner is the last bidder standing; they then pay the purchase price (final bid price) of the auction, plus any shipping/handling fees.

Bid Butler Types

Standard: A Standard Bid Butler (auto-bidder) places one (1) bid before the clock reaches zero, keeping the bidder "in the game" until he/she runs out of bids in the Bid Butler or until the bidder wins. A Standard Bid Butler can be turned off at any time during the auction, if the bidder desires to discontinue his/her participation or if they desire to single-bid.

Rapid: A Rapid Bid Butler performs a simple subtraction of loaded bids if there are 2 Bid Butlers loaded at the same time. That is to say that the Bid Butler will activate an "instant withdrawal" of all loaded bids and the timer will resett only one time. So, for example, if Bidder A has loaded 100 bids and Bidder B has loaded only 50, the Bid Butler will take 50 bids from each instantly, and Bidder A will still have 50 bids left and will be the highest bidder. Once the Bid Butler begins activating, you cannot stop it, so be sure to not load more bids than you are willing to part with.

Blitz: When a bidder chooses the “Bid Blitz” button, the auction will temporarily lock all other users out of that particular auction. Then, multiple bids will be placed automatically for the user. The price of the auction will go up by $.01 with each bid placed until the reserve price is met. At that point, the bidder can purchase the item for the reserve price. If there are not enough bids in the user's account to reach the hidden reserve price, the auction will be reopened to all users at the new price. SpeedyFinger.com appears to be the only penny auction site that utilizes this feature.

If you would like to add to this list, or correct any errors, please let us know in the PennyBurners Penny Auction Forum. It's free to join!