Have you ever participated in a Penny Auction? While this type of auction website is newer than the traditional on site ones, it promises a fair amount of excitement. It requires its own bit of strategy and commitment.
The penny auction concept is pretty much based on an old game concept called Brinkmanship in which each successive player's bid lowers the value of the item being auctioned. This auction operates with a time limit and the last player to bid and lower the value of the items being auctioned wins the item. A bit of a different goal than the traditional auction of old, wouldn't you say?
Just a Little History
If you do a little research on Penny Auctions, you will likely find that they originated in the United States during the Great Depression as a result of people losing their farms due to their inability to maintain financial obligations with their respective lending institutions.
My research in the history reveals that banks would hold auctions for the property of farmers on whom they were foreclosing. At the time of the actual auction, neighboring farmers and friends of those at risk of losing their property would attend the event and would prevent legitimate bids on any property from being made. In their attempt to help their friend or neighbor, they used whatever means was necessary to keep the bids to virtually pennies.
Frequently, farms and all the property associated with it were sold for under $5.00. This sounds pretty amazing to me: $5.00 in 1932 had more buying power than it does now but it was still not much at all for a farmland, equipment and buildings. The banks had to accept the proceeds from the auction as full payment for the debt. Needless to say, the banks, at that time, were not happy. They found ways around this illegal type of auction.
Tips to Success
Now for some tips or suggestions on how to be successful in this type of auction:
Set your goal. As with any endeavor, one should always have a desired goal in mind for which they can strive to accomplish. This helps you keep your focus during the bidding process as it is easy to be side-tracked by all of the interesting items being auctioned and the bidding process involved in those auctions.
Identify the winners and study their habits. Watch them to discover how they place their bids, when they bid and how much they bid to formulate the strategy they are using to apply to your own.
Don't give up! Try not to get discouraged or frustrated in the beginning. It is not likely that you will get the first few items that you want but you will learn in the process each time you join in an auction.
Strive the learn all that you can. Start with easy items that aren't the hottest items so you can learn the ropes. As you get more confident and gain more insight into the process, then you can compete for the more desired items. There are some amazing deals out there just waiting to be made.