You’re watching television on Sunday afternoon and see an ad for an internet penny bid auction. It sounds like a great idea because people are able to get good products for a heavy discount. At the office or the job site the next day, you hear how a co-worker won a 70 inch television on an auction site for $200. Now you’re ready to know how to start your own penny auction business.
It all begins with securing a memorable domain. If people can’t remember your penny auction site, then you’ve already lost the battle. Keep names short and sweet, often to three words or less. Then make sure you can secure the domain for that name so that when people hear it, they’ll want to visit it to find some amazing deals. Here are some of the other tasks you’re going to need to complete as well.
1. Arrange for a steady provider.
Penny auctions sites work like any store or online outlet. They need to have a good distributor providing them goods. This means that the first step in building a solid auction service is to have a supplier lined up who can provide a steady stream of goods. It is best to work with discount bulk suppliers, but even a business like an online pawn store can help you to secure the products you are selling. Not having a secure distribution line means not getting the product to the winner in a timely fashion and that will kill your reputation.
2. Know the consumer laws in your community.
Some penny auction services have had complaints filed against them for fraud. Others have had business licenses pulled for shilling or botting where the owner of the site uses employees or automatic bids to increase the product price in an auction. These practices are illegal in every community.
There are also other strict laws in each jurisdiction that are unique, so when starting your own business venture like this, be aware of all the laws involved and use ethical bidding processes. Make sure all registration fees you charge and the pricing of all bid packages are clearly explained to avoid trouble.
3. Be aggressive in your marketing.
You are choosing to enter a highly competitive field, so it will be important to reach customers who will favor your auctions over all others. SEO is going to be your best friend. Optimizing all of your listings to hit your target keywords, getting links, and making sure all of your URLs are search engine friendly can help people find your auctions when they’re looking for products.
You’ll need to use all social media and get banner ads popping. Do targeted email advertising focused on your market to get people aware of who you are and what you offer.
4. Be diverse in the products you offer.
The world of penny auctions is very focused on technology items, so this is a good place to get started. With a penny auction site, however, it is also important to look at what kind of products that could be offered which no other site has. Shoes, designer clothing, or even real estate are all potential options if you can secure the distribution chain. Remember the way to make an impact is to be different.
5. Determine your bid packages and stay consistent.
Penny auction companies make their money from selling bid packages, not from actually selling the products. A consumer buys a package of 25 bids for 50 dollars, for example, and then they use those bids to secure a great deal if they can. Keep the pricing of your packages consistent and with a price setting that allows you to make money, yet still be affordable enough that you won’t have people disgruntled if they can’t win an auction.
Penny auction services must walk a fine line in letting customers feel they can keep in a bidding contest without going broke or spending more money than they would at a store. Because one of the best ways to get your penny auction service off to a hot start is to make sure people can win. No one wants to feel like they are losers.
To make sure this is possible is to offer packages of bids that include promo or refill bids at a price good for both you and the customer. Offer deals that offer these promo bids at a good price and you’ll likely find a fast growth.
6. Anyone and everyone is a potential customer.
One basic fact is that people are highly motivated by risk and reward, making the risk worth every penny invested is how you build a strong return customer base. People are always looking for bargains, so by setting a good auction time limit and by maintaining solid business ethics, you’ll be getting a solid base of interested bidders and an ever expanding base of people buying your bid packages.
There is no one type of person that participates in penny auctions. It is a place where everyone is looking for a good payoff for their investment. Keep it light and fun and most people will pay to play, even if they know the odds are stacked against them..
7. Provide excellent customer service.
It is important to be responsive to the customer. Make sure that you honor all of your commitments. Your shipping service must be reliable and well-known. If there is ever a customer concern, you must be able to respond in a timely manner and do so respectfully. Remember: while this is a growing business model, the traditional ways of doing business are still important today, especially when it comes to customer service.
8. Be ethical and transparent.
Always be up front in the merchandise you are selling. Use actual photos of the product and provide full descriptions. Customer privacy is important and will be your responsibility to maintain. You are asking individuals to trust you with their money and private information, you must respect that and make it secure. You’ll need to have a relationship with a credit card processor to accept funding as well, so be transparent about who you are using and what fees may need to be charged.
Starting a penny auction business can be a fun and innovative way to make a living. If you can stick to the basics of respecting your customer and providing amazing products at incredible prices, then you’ll be set for the future.