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Future Of Penny Auctions

Future

Now, many people love penny auctions. If they had their way… they would want penny auctions to replace traditional auction sites such as ebay! whereas others can’t stand penny auctions and will do anything they can do stop people from signing up due to their belief that the sites aren’t legit.

It’s those people that make us question the future of penny auctions. After all… these sites have only been around for a few years, who’s to say that they might die out within the next couple of years, it’s certainly possible.

wellbid and PRWeb predict a bright future for penny auctions:

Penny auction sites, a relatively new development in the e-commerce marketplace, use a system of bidding that allows users to purchase high-value items at much lower prices than retail. Most Wellbid.com customers seek great deals on such high-end merchandise as laptop computers, TVs, cameras, iPods and phones. Penny auctions are meant to be fun, competitive and entertaining, which is why their users prefer entertainment shopping over traditional online auctions.

For years the eBay model, in which users increase the prices of items by declaring what they are willing to pay, has dominated online auctions. What has been missing from this model is the thrill of getting a great deal on expensive merchandise. For its part, Wellbid.com adds another dimension by allowing bidders to interact with one another. The site allows participants to battle it out during the bidding process, adding a level of excitement unmatched by any other type of online auction or shopping site.

Of course… you would expect wellbid to say that, but they do raise some good points. Sure, ebay is great and is one of the most popular websites in the world. But you can’t really compare the two if we’re honest.  They’re both auctions… yes, but thats where the similarities end. Penny auctions can be risky and there will always be risk, the problem is that these sites need to let new customers know all the details before letting them sign up. Their future could depend on it.

Heres a post from a thread on the pennyauctionwatch forum:

NHappraiser wrote: I have given it more thought.

I think that with out some type of oversight the industry may get into trouble in the future. We have seen many sites close their doors owing bidders hundreds or even thousands of dollars in bids and or products. Some try to sell the site to cover their loses and others just close the doors for “maintenance” but never re-open. Some go out with their heads high having shipped all items and refunded all bids. These are rare.

These bad sites are hurting the industry as a whole and will most likely cause the local, state and federal governments to get involved and possibly over-regulate the industry.
As I told my state auctioneers board, I am all for oversight and licensing for ANY business as long as it is for the good of the general public. My gripe was when they told me I needed to have an auctioneers license no matter what. This requires schooling/training and a $10,000 bond. Overkill in my opinion. Since our conversation they have signed a new law about internet auctions. So again, without oversight (not full regulation) I believe the industry may be in for a downfall in the next few years thanks to the bad sites.

These sites will give the industry a bad name and companies like PayPal and the credit card companies will start to ban PA sites from being customers. News stations will get bidders complaining to them about the bad sites as will the local, state and federal authorities and possibly the District Attorneys office. This is my concern. I am not concerned with bidders vanishing as there are always people wanting to get a great deal on stuff. When I was 20 I was told by a car salesman friend of mine “Is not the deal they get but rather the deal they think they got”.

From theguardian:

Somewhere in the UK a person going by the name of “minga60″ must be feeling gutted. He recently spent more than £200 trying to win a 32″ LG flatscreen TV at penny auction website Madbid.com, only to see a rival bidder steal in and win it at the last second.

Madbid.com, and rivals such as Bid Budgie and Fastbidding.com, are at the forefront of an explosion in penny auction websites in the UK, with shoppers enticed by gaudy adverts boasting that Sony PlayStations have sold for a fiver or MacBook Pros for £90. But a closer look reveals that consumers can end up with nothing to show for it.

Unlike eBay, where bids are free and you only pay the price at which you win an item, participants in a penny auction must pay to place each bid as well as the final price of an item should they win it. Of course, there can be only one winner so everyone else is left out of pocket.

Again very interesting indeed, NHappraiser could be very right on the fact that if some of the major payment gateway companies such as paypal decide that they don’t won’t to be involved with penny auctions, this could have potentially huge consequences for every penny auction site.

There have been many social media campaigns about The Future of Online Penny Auctions whom are also concerned just how long these are going to last. Because, make no bones about it… some people live sleep and breath penny auctions.

And more media coverage from the likes of the guardian that don’t look into penny auctions thoroughly enough and jump to conclusions. Negative press could seriously damage the future of penny auctions all because the research wasn’t up to scratch.

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