How to Win AND Lose at Penny Auctions - Real Tips for the New Bidder

If you've come here, you no doubt have some idea of what a penny auction is, but just to be safe I will give you the 4-1-1 on how most of them work and the general idea behind them.

Most people make their first mistake in believing that Quibids, BidCactus, Beezids, etc. are exactly like EBay. This couldn't be farther from the truth. In fact, the only real thing in common is that they both refer to themselves as "auctions." First, let's discuss how EBay or any other mainstream auction site works. On EBay, many items are individuals or small companies typically selling items at a reduced price. They can be new, gently used, or all the way to items used for parts only. The bidder gets to place as many bids as they wish, and if they are the final and top bidder when the clock runs out, you win for the price you stated, plus shipping and any other fees the seller is charging. Seems pretty straight forward and there is very little risk to it.

Penny auctions are more complicated. The items for sale are always new and the price can only be raised on a single item by a penny at a time. This is the reason you will find a $500 item selling for only $12. The biggest and most notable difference: It is NOT free to place a bid. Contrary to sites like EBay, here you must purchase each bid - Costing anywhere from $.60 - $.75 cents per bid, depending on the site you choose. Also unlike EBay, you are not necessarily fighting against the clock. For instance, every time someone bids with less than 20 seconds on the clock, it resets back to 20 seconds, giving someone else the opportunity to place their bid if they wish. (Much like how an auctioneer will yell "Going, going, GONE" to alert other bidders that an auction is nearing a close.) This can be difficult to envision unless you watch it first hand, but it begins to make sense quickly after only a couple minutes of watching any given auction.

Tip #1: Understand HOW It Works
My first suggestion would be to watch an auction in progress prior to ever even making an account. My favorite site is Quibids and is the by far the most user-friendly and straight-forward penny auction site I've ever come across. (And trust me, I've done my research.) Go to Quibids.com and simply just watch to get familiar with the basic process and make mental notes of the differences between sites like EBay versus Quibids. I do urge you though, don't let this first step draw you in too quickly. It can quickly entice you, but there is much more to understand before you dive in.

Tip #2: Read and Watch
If you're hear reading this I commend you, as you've already begun your search for more information. But don't let this be the only thing you read or watch. While it does contain a lot of helpful things I have learned, it is not necessarily what will work best for everyone, on every site, and every situation. You want to read any and all articles the site itself gives you when starting out. Quibids is amazing when it comes to this. They have have a tab right on their homepage that says "QuiBids 101." Please, please, please take the time to look through this and information anything you can get your hands on that pertains to your situation. Also, YouTube is a great place to find information. One user I really enjoyed as a beginner is found here. He has a number of videos that really give helpful information, for both new and experienced bidders.

Tip #3: Don't Be Wishy-Washy
My next suggestion: Pick a site and stick to it for now. Quibids is always my first suggestion for new bidders because of the safety net of the "Buy it Now" option, but it can be a little overwhelming with so many auctions going on at once. So if this isn't your style then try one like BidCactus.com. I like this site simply because 1: There's generally not as much traffic as more well known sites. And 2: There aren't as many items to become lost in. While it does mean you may run into a little more competition, it helps you focus your attention on one single item at a time and you can easily spot the bidders who generally back down, as well as the "Bully" bidders who are, in your best interest as a newbie, better to just stay away from. This is very useful information to have on your side.

Tip #4: Don't Go Overboard,
When you decide to buy a "Bid Pack" for the first time, I would HIGHLY suggest only the smallest number of bids at first. BidCactus has a 30 pack, while Quibids is offering a starter pack of 100. You should know after the first pack if this type of hobby is for you or not. And yes, I refer to it as a hobby. And with any hobby, it can be expensive, but it should ALWAYS be enjoyable. If it is not enjoyable, it's best to get out with the least amount of time and money invested as possible.

Tip #5: Get More For Less
With both of these sites, you can get an even better deal by searching for promo codes at RetailMeNot.com. Each time I purchase, I can typically earn anywhere from 3-10 extra bids by using any one of these codes. Doesn't seem like much, but trust me, they add up! Do pay careful attention at RetailMeNot. When choosing a promo for Quibids beware of this scam: They do NOT give you a code and simply say to follow a link like this http://qb.cm/r13409641 and you'll receive TONS of free bids after your purchase. This is false, they are simply trying to get you to join using their referral code and will NOT give you the promised extra bids. But to cut the middle man and to simplify this process, if you already know you'd like to join at Quibids, feel free to use THIS link and use "WINBIG" as the promo code when purchasing. This is MY referral link and a code used for 3 extra bids at Quibids. This is the ONLY working code that I have found that currently works as promised. As for BidCactus try THIS - Again, this is my referral code, but this one WILL give you 10 free bids. Another couple codes I have personally used with BidCactus: M73H-XYWD (This code is entered at the checkout page.) which gives you 5 free bids with any purchase.And 4CEC-4JJT (This code is entered under the "Redeem a Coupon" link, which is found under the "Prizes and Promotions" tab on the homepage.) which gives you one free bid without having to purchase anything! (I won a $25 gift card to Home Depot off this one free bid!) Again, this sounds much more complex than it really is...But try it and if it doesn't work, I am more than happy to walk you through it if you leave me a comment!

Tip #6: Do a Beginners Auction FIRST
I can not stress this enough. These auctions are very low-risk compared to the others out there and are your best bet to recouping any money you may lose doing this as a beginner. BidCactus will have random auctions that are for 1st-Timers only. It is identifiable by the light-blue dot with the "1st" written in it at the lower, left-hand corner of the auction box. Quibids has "Beginners Auctions" which is essentially the same thing - No one can bid, unless they've NEVER won any auction before. My best advice is to be patient. I would suggest going after an auction that has both an item or gift card, PLUS additional bids. For instance, my first win was a $25 gift card to Home Depot, plus 25 free bids free to use on any other auction. If there aren't any going on at first, wait an hour or two then come back and look again. Patience pays off big-time here.

Tip #7: Let Others Waste Their Bids For You
As a general rule of thumb, NEVER bid before the very, VERY, VERY last second. You can save yourself a lot of wasted bids by simply waiting it out and being patient for people to wear themselves and their bids out. People will want to jump in the moment someone else bids, but fight the natural temptation to strike back immediately. You will often find that people will force others to waste their bids needlessly. This is the reason why so many people out there are sore losers, complaining these sites are scams. These people are their own worst enemy. They either do not understand the principles, or are ill-advised on how to approach these sites. It is NEVER a guarantee, so as a general rule, NEVER throw more money at it then you are willing to lose. While I find the odds for me have been MUCH better than any casino I have ever been to, I still have my off days and will never invest more than I can afford.

Tip #8: Stalk Your Item Like It's Prey
If you've never bid on a certain item, you must watch, watch, and watch some more. Granted, there is always risk involved, so you need to know which item you are willing to leap on, when it's generally best to bid, how much you're willing to pay for it, and how many bids you're willing to put up. Say you want an iPod. Before you ever even bid, you need to find the patterns. When it sells for the cheapest, the typical price is goes for, the number of bids the average person uses and whether or not you are willing to go the extra mile to win it. Some of these are more important than others, but you'll learn all this with practice.Basically, If you know that the average iPod rarely sells for less than $10, it's safe to say that you don't want to jump into an auction when it first begins. Keeping in mind that $10.00 equals 1000 bids can kind of put things into perspective. If you're only willing to bid 100 times, you generally need to be within $2 of the items end price. My math is as follows if you don't get my logic: You bid 100 times, the other person bids 100 times - Therefore, 200 bids = $2. Are you following me? Good! And another good thing to remember: These items aren't once in a lifetime opportunities. Each item will return and with it, another opportunity to win it. If there are too many unknowns for you, pick another time to win the same thing. Part of being a successful "stalker" is knowing which "prey" is out of your league.

Tip #9: Know When to Back Out
This doesn't mean back out for good, this just means lay off. If you notice that more than 7 or 8 people are continuously bidding on the same item, odds are it won't be ending any time soon. Stop bidding and continue to watch. I don't recommend using any sort of AutoBidder at this point in the game, so you don't need to concern yourself with turning this feature off. (Some people have great success with AutoBidder, but I tend to get myself into more trouble then anything...) I always recommend watching others battle it out. If they continually bid back and forth, let them. Someone always eventually tires, and more often than not, it's usually neither of these bidders who come out with the big prize. Just notice when the bidding slows and your cue is when one stops completely, or when one switches to single bidding.

Tip #10: Keep Your Expectations Realistic
Coming into this experience with an open mind is key. You can not expect to walk away with an HDTV your first go-round, nor can you expect to come out on top all the time. Your initial strategy is to break even until you figure out what works best for you. I would always suggest to start with small items where losses are minimal and your experience is far more enjoyable. This is truly a hobby for those who enjoy gambling. You wouldn't jump into the world poker tournament, never having played poker before. The same is true for penny auctions. You wouldn't typically jump into the biggest prize on the table, never having actually won any auction before. Don't let those 1-in-a-million wins diminish your small successes, but more importantly - Don't expect to join the elite few your first time out.

I will be adding more tips and tricks as I get time. I do hope this helped and if you have any hints or tricks of your own, feel free to share them. If you do decide that this is something that you would enjoy, I would like to encourage you to support my effort to provide you with the best advice possible by joining under my referral links below. Again, I hope you have as much fun as I do and should you ever have a question about either of these sites, don't hesitate to ask! Hope this finds you well and HAPPY BIDDING!!

Referral link for Quibids
Referral link for BidCactus