Before jumping into the heart of the guide, I want to go over the basic anatomy of what penny auctions are and how they work.

Penny Auctions

These are auctions done in part for entertainment as it allows users of the site to purchase “bids”. These bids are sold for approx. .60 cents on most auction sites.

You’ll notice when you go to a site (insert aff link here) that there is a timer much like on ebay.

There is a big difference though. As the timer approaches zero if someone places a bid, the timer will reset for a few seconds. The time varies but is anywhere from 10 to 30 seconds.

Go here and observe bidding in action ( insert aff link here)

When the clock finally expires which will take a number of tries before it does, the highest bidder wins.

The savings including the price of the bids purchased usually amount to 90% off the retail price.

The way the auction sites make money is the losers all purchased bids and lost which more than makes up for the price of the product.

Here is a typical penny auction

This is from the extremely popular site bidcactus.com

What are the different types of penny auctions?

The types of auctions vary for each penny auction site. Each type of auction will require a different strategy.

• Cent Auction : The bid price rises by one penny with each bid placed. The timer adds 10 to 20 seconds each time someone places a bid.
• Auction with no Autobidders: No auto bidders are allowed. You have to place single bids manually. These are usually for high priced items like TV sets
• Beginner Auction : Not every auction site has beginner auctions. The ones that do though are only open for new users who have not yet won anything. Once you win you can no longer be part of a beginner auction
• Open Auction : As the name implies it’s an open auction
• Fixed Price Auction : A fixed price auction means the winner has to pay the price displayed in the heading of the auction plus delivery charges. The bidding takes place to determine the winner.
• 100% off Auction : Many auction sites offer 100% off auctions. In these cases you pay nothing and only pay shipping charges. Again bidding takes place to determine the winner.

Are penny auctions really worth it?

Penny auctions provide you the opportunity to get greater discounts on items than you’ll find anywhere else. The ending bid price is almost always far, far below the retail price.

Here’s an example of an auction that just finished.

This is from another popular site Quibids.com

You’ll notice that these are 2 cent auctions meaning each bid costs 2 cents or 2 bids.

For the winner of the auction the huge, huge discount is the benefit. For the penny auction owner, the competition and resetting of the clock offer nice profits.

Are penny auctions a scam?

No, they are not a scam. They are real companies and completely legitimate. It is totally real that you can get things at enormous discounts.

I do recommend however that you stick with the auction sites listed at the bottom of each email. These are known for having integrity.

List sites and aff links

Do some sites have shill bidding?

Unfortunately yes, for this reason we recommend you stick with the auctions sites listed here.

List sites and aff links

Shill bidding is the owner of the auction site, bidding on his own auctions in order to drive the price up. This is considered unethical by most people and on standard auction sites such as ebay is against the terms of service. In some cases it’s also against federal law.

What are autobidders or bid butlers?

These are automatic bidding software that will bid without you’re having to sit in front of your computer. Usually you have to set a start and stop for bidding.

Do some sites have win limits?

Yes, to keep things fair for everyone, some sites set limits on how many items a single user can win.

What is the price of a bid?

It’s the price paid for the bids purchased to participate in the penny auction. Almost all sites sell them for less than a dollar. You normally can buy them in large packages to get greater savings on a cost per bid.

Here is an example:

(insert aff link)

What are bid increments?

The amount the bid price increases each time someone places a bid. Example: each time someone places a bid, the winning price is increased by .01 cents.

What are free bids?

Most auction sites give away a certain number of free bids. You can get these with coupons, referrals or by registering at a site.

What is a free penny auction?

Free penny auctions are sites that give you free bids in exchange for filling out surveys or signing up for free trials.

Which penny auction sites are legitimate and do you recommend any?

You need to know that there are some penny auction sites that use shill bidders and even some that are fake.

Typing the name of the site into google and then choosing “discussions” in the left hand column will bring up discussion topics related to that site. You should be able to determine fairly quickly if the site is real or not.

If you find only one review for a site, this does not mean that “review” is actually real. It could just be someone from the company making it up. Best bet is to search through forums and blog posts related to it.

One thing to watch out for as a red flag is seeing one user winning lots of auctions. This is a tell tale sign of shill bidding by the company.

There are literally hundreds of penny auctions sites on the web. For this reason if you’re just starting out, the ones I recommend are a good place to start.

( Insert aff links here )

General Auctions VS. Silent Auctions

The two main types of auctions. It’s best for you to first determine what type of auction you’re jumping into. Lately many penny auction sites use what is known as a silent auction.

What this means is that you won’t be able to see the bidding history at the end of the auction. As you get more familiar with penny auctions you’ll be able to spot power bidders. People who will bid very aggressively. If you see a power bidder It’s best to avoid that auction. In a silent auction however it’s hard to see if there are any power bidders in the auction.

My personal opinion is to avoid such auctions if you can. The industry is changing though and many companies prefer this style.

Now that you know the basics and have taken a look at some different penny auctions sites, let’s get started!

Choose an auction site

Listed here are some recommended auction sites

( insert aff links here )

Here are my top penny auction sites

• Bidrivals
• BidCatcus
• BidHere
• Quibids
• Bidz.com

This is my current list of sites to stay away from

• Swipebids.com

Avoid sites with Auto Bidders

The only way to for sure avoid using a site that has auto bidders is do a little homework first.

The above sites have been cleared for you however there are tons of other ones out there. One way to tell if a site allows auto bidders, watch the home page and see if you notice the same user bidding on two auctions at once. If so chances are pretty high there is auto bidding going on.

Get a piece of paper and count the number of bids that a user is making. Make sure it’s a good amount of time like 30 minutes. If the number of bids is pretty high like say 50 in that time frame, especially so if the products don’t really relate to each other, chances are pretty good that auto bidders are being used to jack up the prices.

Use your judgement, if you see red flags or something doesn’t seem right, stay away. There are enough good auction sites that you don’t have to get involved with shady ones.

The larger more established sites like the ones I’ve checked out and use myself are ones you should stick with. These sites are about you and other users controlling who wins the auctions.

The 3 largest sites

If you just stick with these three you won’t have any trouble. Which one you choose depends on what products you’re looking for.

Beezid – This is a fairly new site but they have a great tool you can use to eat up the competition. I’ve probably won more auctions here than anywhere else.

Swoopo – Swoopo was the first penny auction site created. They have a solid company and good tools to work with.

Bidcactus – They specialize in gift cards and have a really good selection. They are 100% above board as well. They have been certified by an outside auditing agency Ernst & Young and are completely honest.

How to win a penny auction

• Stick with the above 3 sites until you really have a feel for how penny auctions work, how to spot scam sites etc… A lot of new sites open all the time. Site owners who are less than honest create fake computer “users” that create fake bids against you thus robbing you of your bids and driving the price up.
• Your username is Important! Here are some suggestions.
  • Pick an intimidating username . Penny auctions are a little like playing poker, who’s going to give in first. If the person somehow gets the idea you’ll stay in till whenever, you’ll most likely intimidate them and they will bow out. Usernames like “I_always_win”, “prepare_to_lose”or “willing_to_waste_500_bids” could give you an advantage.
  • Pick a confusing username. Pick something like “bidding_closed” or “auction_paused” to confuse others to stay away.
  • Pick a username very similar to one you know wins a lot if you watch and do your homework, you’ll see some users winning a lot. Pick a name very similar to theirs. Others will see yours and think it’s the super aggressive bidder that always wins and not enter the auction.
• Never bid like a new user This can be summed up by making sure you only bid on one thing at a time. Don’t jump around from one auction to another and don’t bid sporadically. People will notice that after a while and target you as a “softie”
• Never just buy your bids and start playing. Make sure you watch for a while. Get a feel for the other players, what bid patterns show up. Which players wait till the last minute etc…
• Make an excel spreadsheet (use google docs if you don’t have excel, it’s free) Note the following in your spreadsheet
  • Super aggressive – Those who just seem to have hundreds of bids and sometimes are willing to pay more than something is worth. They do this to create a persona that scares others off.
  • Easy to beat players
  • Newbies
  • Those who for whatever reason you feel you should be cautious about bidding against them.
  • Those who have won big bid packs
    having a list like this and going through the trouble to put it together can very definitely give you an unfair advantage.
• Pick a bidding technique and stick with it. Here are some bidding techniques that will result in a win. You need to pick one you’re comfortable with and stick with it.
  • Win at all costs. Never enter an auction you’re not prepared to win. This means even paying more than the item is worth. This technique works as others will become intimidated of you in the future. After a while you’ll win many auctions easily as no one wants to play against you. This technique is totally proven to work. It can be expensive upfront but pays off in the long run.
  • Sneaky Bidding. In order to use this technique you need to have done your homework. You need your spreadsheet filled with usernames. You watch the board carefully and when players are busy with other auctions you sneak in a grab one.
  • Wait till the very last fraction of a second. Wait till the clock is almost run out, the last second, then bid. Two things happen here. It’ll keep the auction dragging out which will cause some players to get bored and leave. The second thing it does is preserves bids for you.
  • Just make sure you’re always on top this is similar to a. It shows the other players that you simply intend to win, period. Many will back off and leave.
• New penny auction sites Recommended only after checking them out for a day or two. Make sure they are reputable first. Newer sites aren’t loaded with players so there is less competition. It’s very easy to win on these sites.
• There are three types of bidders on auction sites
  • Aggressive – these bidders will outbid you if you bid against them. They are like someone in poker who is always raising. They do it to intimidate others and force them out.
  • Conservative – These bidders wait till the clock is almost at zero and then start bidding
  • Wannabe bidders – These bidders know a lot of auctions do open and close without a lot of competition. They try and win some of these without attracting too much attention.
• Bidding at the right time Pennny auctions are like poker. You have to have a strategy going in and then stick with it. Watching a site over a period of time and being able to look at it at different times of the day, will give you an idea of slow time periods when there is less competition.
  • Times of the day
  • Look for patterns on a particular auction site re: times of day
  • If the weather is really bad somewhere, you might want to wait. More people will be on the site because they can’t go outside.
  • Playing late at night reduces the number of players by a large margin.
• Base your strategy on the number of bids you have – base your strategy based on how many bids you have. What you don’t want to do, jump into an auction and not have enough bids to finish. The real key to penny auction wins is picking a strategy and sticking with it.

Let’s say you buy a package of 20 bids and paid $15 for them. What you don’t want to do is get into an auction for something like a PS3 or a big screen TV. Your chances of winning with that many bids is pretty low. You’ll use up your bids and have to leave the auction. Best to start with gift cards and get a feel for how everything works first.

• Beating an automatic bid butler – It’s not impossible. Make sure you wait till the last couple seconds to place your bid. Many people will place there bids when there are only 10 seconds left only to see that there is a bid butler set to bid at say 3 seconds. It can take a while for all of the bid butler bids to run out. While everyone thinks there are more bid butler bids left and waiting, you sneak in and grab it at the last second.
• Using software – this is for Beezid. If you’re going to use beezid, then you need Beezid Pro. Without this software you’re pretty much out of luck. What Beezid Pro does, it monitors who’s bidding, how many bidders are there and a lot more. Here is the link to the Beezid Pro website. On Beezid you only get to see the last 10 bidders. What this software does is allows you to have the most up to date information as it is continuously tracking auctions for you.For Swoopo you need to get Swoopo manual. This is similar to Beezid Pro except it’s designed to work with Swoopo. Here is how to use the software to your advantage; I told you about auto bidders earlier. Whether or not these sites use them is somewhat debatable. Since you have analytics software it’s easy to solve the problem. If you see a username with tons of bids, like 200, you’ll only be able to see this with either one of these software programs, it’s either a bot or a bid butler tool someone is using to automatically bid for them.Totally disregard those bids. Now count the number of users with a lower bid count. For example, your bidding on something like a camera that retails for $500 and each one of your bids costs you $1. The auction site needs at least 500 real bids placed to break even. Most of the time they like to make anywhere from 50 to 100% on items auctioned off. This tells us they need 750 to 1000 real bids placed.Count the lower bid count users bids, if it’s only about 200 then just sit back and wait. Once the bid count of these lower bid count users reaches about 750 or so, you need to get ready, a lot of times I’ll wait till it gets closer to 1000 then jump in and bid aggressively at the end.

  Something you’ll notice which indicates there are autobidders functioning, once this threshold is reached, say 750 to 1000 in this example, the autobidders (users with high number of bids) will stop once that threshold is met.

You can apply this to any penny auction.

• The top 6 Bidding Strategies – There is no one single way to win lots of penny auctions. Doing some homework first and having a strategy in mind and sticking with it, will go a long way toward your success. You should at least know the following first before bidding on a site.
  • How much traffic does the site get (quantcast.com – just type the url of the site)
  • What hours have the least number of bidders
  • Who are the users you should avoid bidding against
  • Which items are easiest to win
  • Quickly countering bids placed by others – Also known as aggressive bidding. This is to intimidate other users into quitting. You need to focus on staying in there and winning no matter what. You want to be that guy others are afraid to bid against.
  • Late entrance bidding – You want to wait till the last second before you place any bid. This can scare off competitors and give you a good lead.
  • Early entrance bidding – As soon as you see an item posted you place some bids on it. Others will see there are already a number of bids placed and wait for something else.
  • Bidding on cheap stuff – What you’re doing is leaving the most expensive stuff to others. The reason is that higher priced items will have the most bidders. Bidding on cheap stuff like gift cards increases your chances of winning.
  • Off hours – late at night bidding – you need to do your homework but usually late at night there are less bidders than during peak hours. This can give you an advantage.
  • Using a bid butler – you won’t be bidding a lot and the software will do the bidding for you, however you won’t be there involved so someone who knows how to spot a bid butler may knock you off.

• Final Tips and Do’s and Don’ts of Penny Auction success

• • Don’t bid on items you really don’t want
  • Use sites that credit you back if you buy the item – even if you lose there are sites that will credit you back the bids. You need to buy the item at a fair retail price and they will refund your lost bids. This goes in line with a. above.
  • Use penny auction promo codes to get deals on bids – This link has lots of updated promo codes for discounts on bid packages (insert aff links here )
  • Aim low at first – When you’re first starting out, go for cheaper items like bid packs and gift cards. Usually sites advertise the larger luxury items to attract customers. These are things like HDTV sets, computers, laptops, ipads, iphones etc…since so many people bid on these items they have much larger margins. If you choose the smaller stuff you can do well while others are competing for the large items.
  • Late night bidding – realize that there are others who also know this strategy so make sure you do your homework first. Reducing the number of bidders though greatly increases your chance of winning a nice product.
  • Buy bid protection – see if your site offers this. With bid protection, you’ll win something like bid packs or gift cards even if you don’t win the auction.
  • Make sure you have enough bids – Not only will you save on bid prices buy buying lots of bids in advance, you’ll also guarantee yourself that you’ll have enough halfway through an auction. You won’t find yourself running out when you really need them.
  • Visit new sites – you do have to make sure they are legit but after that, they can be pretty lucrative until everyone else catches on.
  • Try to stay out of bidding wars – this goes along with doing your homework. Try and make sure you’re not going into an auction where someone will be super aggressive. That someone should be you, not both you and him.
  • Don’t bid first – When there is lots of time left in an auction, don’t bid. It is a total waste of money.
  • Avoid auctions where a known strong player is involved. – Most sites will tell you the history of another bidder. Use this to figure out who is likely to get into a bidding war with you.

Final thoughts – I’ve posted a resource page of links. You can find legit auction sites as well as discount bid packages there.