Join & Receive
Mind-blowing updates and exclusive deals from the best penny auctions.
This article is from Jason of BestPennyAuctions.net. Statements and opinions expressed in articles from guest authors do not necessarily reflect the opinions of the Penny Auction List.
I have been an avid penny auction player since October of 2010, bidding mostly on my favorite online penny auction site, Skoreit!. They offer a lot of innovative features that you just can not find at many other sites and in my opinion are one of the best penny auction sites online today. With that said, I recently learned a costly lesson that cost me a couple hundred bucks on Skoreit! and this article shares those lessons so hopefully others will avoid making the same mistake I did.
One day as I was searching through the upcoming auctions at Skoreit! I noticed that their largest bid pack, a 480, was coming up for auction with an “OT” or overtime setting. This overtime setting meant that I could freeroll 480 bids on this auction trying to win and if I lose I can get my 480 bids back by utilizing the overtime auction feature that applies the value of the bid towards the retail purchase price. This was the first time I had seen anything other than some of the inflated retail priced items, like watches or golf clubs, offered as OT auctions.
Since I was in the buying mood already I thought that this was a no-brainer and decided to buy a 480 bid pack. The strategy was to try and win the 480 bid pack OT auction for less than 480 bids or at worst I would get my 480 bids back and be able to use them in other auctions.
It was a free-roll more or less in my mind.
The Plan: Free-roll a 480 Bid Pack
So I bought 480 bids and was online when the 480 bid pack auction started. The plan was to find the right spot to get in the auction and try to win the bid pack for less than 480 bids or at worst to get my 480 bids back with nothing lost. The auction started with a handful of bid agents going at it when two eventual ones looking like they were doing the same thing I had planned to do, spend 480 bids and win or lose.
Apparently plenty of other bidders had a similar idea as I did. A handful of different bid agents jumped in and spent close to 480 bids each, if not exactly 480 bids. This was not that surprising to be honest as this strategy is pretty straight forward and obvious. It is also an interesting marketing technique to encourage bid purchases by Skoreit. It worked for me.
After watching the auction for quite a while I decided to begin bidding with my own bid agent which I set to spend exactly 454 bids. This amount would put my total bid spend and 480 bids.
I was either going to win or get my bids back.
I turned off my computer and went to spend some time with the family. Later that evening I checked and saw that I had been out bid. However, as planned there was a 480 bid pack available in my shopping cart for $0.00. I could get my 480 bids back and use them elsewhere. I took a shot and lost, no big deal.
I ordered my 480 bid pack for $0.00 and went along my way.
The Mistake – Bidding Without All The Info
Over the next few days I dabbled in a few auctions and won one of the 1/10 oz gold coins which was valued at around $180. Now I always like to make my bid pack purchases ‘pay for themselves’ by comparing the value of the items I win to the cost of the bids I purchased to win them. Comparing the $180 gold value to the the $292 purchase of the 480 bid pack, I was still in the hole $112 to break even. The good news was that I still had about 300 bids left, plenty to win $112 worth of something if I played smart and did not get unlucky.
I was looking through the upcoming auctions and noticed that a 5oz bar of silver was coming up for auction that was also an OT auction. Again I normally had only seen the watches or golf clubs offered up for overtime bidding.
The retail value of the bar was around $185 so if I could win this auction with my remaining bids then i would come out with a value of $375 ($180 piece of gold plus $185 piece of silver). I had around 300 bids left to spend which I valued at $.60 per bid with a total value of ~$180. The bar of silver retailed at right around $185 meaning at most I would have to pay would be a five to ten bucks.
My total cost was right around $315 including shipping and the value of the metals was $375 giving myself a decent little profit of $60.
So, I could go for this bar of silver and lock in a small profit if I did not win. Or, I could win the silver quick giving myself a profit plus still having more bids to use elsewhere. The other option was to wait and spend my bids on other auctions that would probably be less competitive. This auction started during the evening busy time making it harder to win and being an OT auction means that the auction will probably be busy.
I decided to lock in a small profit by trying to win this piece of silver.
Worst case scenario is that I lose the auction spending all my bids and have to buy the bar of silver for a few bucks extra. I figured the best case scenario is I win the bar of silver with little resistance and make my profit plus leave myself more bids to win more.
I almost won the silver bar auction fast and easy.
If one of the single bidders would have waited less than a half a second more I would not be writing this article today. The first two bid agents gave up at just about the same time after a fairly short lived battle. I was auto-bidding and trying to take the auction down quick, only fighting other single bidders. I had the auction within victory when just after having that last moment single bidder keep the auction alive another strong bidder jumped into the auction with his bid agent.
I had seen this bidder before and was pretty sure at this point that I was going to be stuck spending all of my bids and using the OT feature to buy the bar of silver. This guy was not quitting but I was going to execute my plan anyway and take a small profit.
I spent all of my bids and the bid agent who fought me ended up eventually winning. Other competition jumped in later, forcing him to over pay by about $50. Not sure why you would do that on an OT auction but for whatever reason he kept going.
No big deal I thought, it’s time to buy my bar of silver and book my profit.
I went to check out and saw the bar of in my shopping cart, but there was a problem. My cost of the bar of silver was full retail price of $185! What?!?
That is when it dawned on me.
The bids I used on this OT auction had a value of $0 since I had purchased them from an earlier OT auction. The bids I spent on the silver bar auction were ‘voucher bids’ that I paid $0.00 for when checking out previously. I had spent the 480 bids I paid full price for already trying to win that 480 pack. When I redeemed the OT bid pack purchase, my cost was $0.00 and those bids did not count towards the purchase price of the bar of silver.
Instead of guaranteeing myself a small profit I ended up costing myself money because I did not realize how the bids were valued regarding OT auctions. Previously I had avoided the OT auctions because I did not like the idea of there not being a risk for my competitors so I had virtually no experience with them.
Penny Auction Lesson To Learn
The lesson here is to make sure you know the value of the bid you are spending at each point, especially if you plan to participate in OT auctions.
- Bids that you have won in previous auctions are valued less than if you paid retail price for them (assuming the auction closes for less than it’s retail price).
- If you redeemed bids from an OT auction then those bids are valued at “$0.00 in terms of applying them towards other OT auctions
I hope you enjoyed this article and I hope it keeps you from making a similar mistake!
You can read more penny auction strategy articles and rate the best penny auction sites at BestPennyAuctions.net.