As the penny auction industry grows, so does the overwhelming amount of people who have two questions on their mind:

What is a penny auction?

How can I win?

Today, we will attempt to explain exactly what a penny auction is in the simplest terms. Of course, with the growth of the industry, there have been many new auction types that have been implemented, but the one type you will see most of the time and almost anywhere you go, is the traditional penny auction.

A penny auction is basically a bid-fee auction, where you pay per bid. Bid prices can generally range from $.30 to $1.00/each, depending on the site. Penny auction sites sell bids in what's known as a Bid Pack, which can range from 20 bids per pack, up to 500+ bids per pack. When determining which size Bid Pack you should buy, keep in mind that if you run out of bids during an auction, you will have to take time to buy more, which may lead to you losing the auction. We recommend that you observe the site for auctions you want to participate in, and then buy your Bid Packs accordingly. Oftentimes, the larger the Bid Pack you buy, the cheaper the price is per bid.

After you buy your Bid Pack(s), you are ready to bid! We recommend that you don't spread yourself too thin, and that you focus on one or two auctions instead of bidding blindly on everything. You will have more bids and less competition this way.

With each bid you place on a traditional penny auction, one (1) bid is deducted from your account, and the price of the auction rises by one (1) 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 "00:00" is the winner!

Let's say you're bidding on an Apple iPad 2. The bids at the site you're playing on are $.60/each and you place a total of 250 bids. The auction ends at $4.70. You win. Shipping is $15. The total you've paid for that iPad 2 is $169.70. Not bad!  ;-) In a traditional penny auction, you pay per bid, plus the final auction price, plus shipping (unless shipping is free!). If you don't win the auction, you are out those bids you've placed, so bid wisely.

Many people are always looking for a "trick" to winning at penny auctions. Unfortunately, there's no real trick involved. Winning a penny auction requires patience, timing, strategy, and yes, skill. We recommend that you do heavy research into a site, its auction formats, and its bidders before deciding to invest. What time of day do auctions seem to end at a lower price? Which bidders will keep bidding no matter what? How do their timers/auto-bidders work?

If you are new to a penny auction site, take advantage of their New Bidder Auctions. These will allow you to bid against other "newbies" only, and give you a better chance at winning an auction while learning how to play. Most sites also give new members free bids which they can use to bid before deciding to invest in the site. Also, it is important to remember to be flexible. Be willing to readjust your strategy at the last minute and realize that nothing is a "sure win".

When you find a penny auction site that interests you, you should first check for reviews at reputed sites, such as the PennyBurners Penny Auction Forum, PennyAuctionList, PennyAuctionHelp, and PennyAuctionScore. There are many bidders, who are members of these sites, who will help guide you through the industry with ease, and who will share their "real life" experiences with the various auction sites out there.

While there are several "bad apples" out there, there are also plenty of honest, legitimate sites (such as the PennyBurners Verified Penny Auction Sites) with stellar customer service, desirable items, a fair playing field, great communication, and fast shipping. As with anything involving money, diligent research is required before investing.

To learn more about penny auctions, to discuss bidding strategies, or to find a new favorite penny auction site, please join the PennyBurners Penny Auction Forum!

News - Penny Auction News