Over the past few years penny auction sites have exploded. Just about every TV network has a slew of ads promoting one penny auction site or another. “Imagine getting the new iPad for $25″ that’s how they attract bidders to their site. Many people have avoided penny auction sites because of the old adage, “If it sounds to good to be true it probably is” however, if you understand how penny auction sites work, with a little luck it can prove to be very profitable.
For those of you not familiar with the penny auction site, here’s a little primer of just how it works. You register for the site and link a payment source. The product that you’re bidding on starts off with a penny and moves up in price as more people bid on it. Easy enough right? Well while you’re bidding on the item at penny intervals, there is a payment or a bid cost that you incur, it could be anywhere from $.25 to $.99 so as you increase the cost of the item you are dumping that much more money into the auction itself.
When the penny auction closes, let’s say for that New iPad for $25.00 that could have been 2500 bids. If that penny auction site is charging say $.25 per bid that’s $625 they just made for the new iPad which would have cost you $499 in an electronics store. Now say you’re the winner. You would pay $25.00 the cost of the winning auction, but lets also say you have 100 bids in. So now you’re paying $275.00 for the new iPad not $25.00. However, look it at for what it’s worth you just saved half price on a brand new iPad. What happens with the money if you don’t win?
More after the break
Well you’ve paid for the bids and you don’t get that money back. So if you did bid 100 times you’re out the same $250 whether you won or not. That’s where Huntsville Alabama’s SlamWin has something new to offer. Slamwin was founded by two friends Tobi Ogebule and Collins Ombayo. The idea almost came out of necessity. The two founders were working two jobs and had a successful ebay power seller business. They started to source penny auction sites as a place to possibly find good margin items for their ebay sales.
What they found when they started looking into and using penny auction sites, was the scenario we just described. If you bid and you win great, if you bid and you lose you’re out all of your bidding fees.
Ogebule took some time out of his busy schedule to talk with Nibletz about starting Slamwin and exactly what it is. Slamwin has found a unique way of giving some of the bid money back to the user through the use of coupon rewards that bidders can use for whatever they want. We asked Ogebule how did you come up with the idea?
“The idea originally originated in the fall of 2010 in an hotel lobby area.
At the time Tobi and collins were working two jobs to make ends meet just
to pay for school. while running a very successful eBay business the
opportunity came for us to expand and we where looking for products we
could get cheaper to widen our margins in order to sell more and fast. we
stumbled across a particular penny auction site. and to our surprise
products were selling for as high as 99% off. An opportunity for us to
participate on these penny auctions to win products for that low of a price
would be a deal we could turn around and sell on ebay to make more money,
but only to realize that its actually a pay per bid module and to actually
win an auction will drain your credit card. Not only are the chances hard
enough to win an auction the worst of all is all money is gone once the
auction is over and you find your self on the loosing side.A huge cry for
“SCAM” was buzzing all over the in the internet. Collins and myself figured
there has to be a solution to this problem. This gave birth to slamwin.com“
Slamwin’s founders discovered there was a lot of cry about “scams” when penny auctions first started to take off in the U.S. They completely understand the concept of penny auctions so while it’s not a scam they could understand why penny auctions have a bad reputation. We asked what they thought the public reaction would be to slamwin.com
“It will be challenging since we are solving a market that have had a lot of
negative feedback from their customers/users but the slamwin’s culture and
platform is what will set us apart in the public eye. Launching as an
exclusive company with an auction platform that gives coupon reward to all
our users and letting them share this with their friends in the social
media should create a positive public reaction.”
How does slamwin get over the hurdle of people thinking “sure this is another scam penny auction site”
“First of all we are referring from branding our self as another penny
How unique is slamwin? first its a site that you have to be invited to
join an auction. There is always a queue to join any auction on slamwin.
once the auction room is filled up the room is closed and the auction
begins. prices starts a little bit below retail and drops as you bid. bids
are bought in bundles like any other penny auction site but once a bid is
placed the price drops by 20cents..users compete to be the most invested
bidder to win the auction. a percentage of every bid placed on our site is
refunded to your coupon account which once accumulated can add up a whole
lot. you can then use these coupons to pick up any thing in our store for
the value of what you have in your coupon account,.Its easy because every
body wins on slamwin.”
So now that you’ve heard all about slamwin you’re probably dying to figure out how the coupon rewards part works, Slamwin explains:
“So lets say you are bidding on your favorite laptop and you have bought
loads of bids to bid on that particular laptop. Once the auction is over
and you realize that you haven’t won the item every bid that you placed
towards that laptop, a percentage of each bid is returned to you as coupon
value which you can accumulate and you can then use those coupons to pick
anything from our store or from other affiliated retail sites we partner
Is Slamwin the end all to penny auction sites?
“I wouldn’t say so because some other penny acution sites are doing well in
their various respects and fields. We are only giving users a break on
loosing money on other penny auction scams out there and an opportunity to
win big and fast”
Slamwin is currently bootstrapping it while they work on raising funds for their new concept in the penny auction space. They definitely have an idea worthy of consideration, however they’re going to continue to be stifled by America’s bad perception of penny auctions, that is until their users start spreading the word about the cool stuff you can get when you lose bids.
Check out Slamwin for yourself here
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