This article will cover some of the basics for playing penny auctions smart. Why is this important? Because if you don’t have a plan, penny auctions can soak up a lot of your time and money with little reward to compensate for the cost. Are you gaining financially at penny bids in addition to having some fun and excitement?

Your goal.

The first step is to decide why you play the auctions. Is it just for fun and amusement, and actually winning anything is a bonus? If it is, that is fine but you should decide up front how much time and money you are willing to spend on this entertainment. Just like we usually plan (at least roughly) how much time and money we will spend on eating out or going to movies. In this case keep reading, because some of the tips below will help you maximize your fun and enjoyment.

On the other hand, if you are like me you play the penny auctions not only for fun but because you also want to win some cool stuff for a really good price. And to maximize your chances you need good strategy and tactics. The rest of this article will provide some key tips for you.

Bid cost

You can’t participate in the penny auctions without bids so the first item is the cost of your bids. There are many auctions where you can get free bids when you first join. A bid giveaway should always be your first choice. The different penny auction sites often run specials where you can buy bids at a reduced cost. Buying larger bid packs can also save you money on some sites. The auctions also have bid packs up for auction. This will lower cost if you bid wisely and win them for a low cost. Most sites have bid giveaway for referring new users to the site. Finally some sites provide bonus codes from time to time. The best way to find these is search the forums and blogs.

Selecting items

Now you have your bids. Do you start bidding? Not yet. At least I don’t. I review the items that are coming up for bid and decide it there is anything that I really want. It might be an item I have wanted but would not pay retail price for. Maybe I find some items that would make nice gifts, particularly if purchased at a discounted price. Or maybe it is something I have decided to purchase and want to check the penny auction to see if I can win it at auction.

Maximum price

Next is setting the maximum price you are willing to pay for the item. The auctions usually give the retail price of the item but don’t use that as a guide for your maximum bid. Check your local discount stores and do an online search for the lowest price. As a general rule I limit my maximum bid price to about 50% of the discount price of any item.

Maximum bids

Now you have your maximum price. Are you ready to bid? Not necessarily. You still need to determine the maximum number of bids you will commit to the auction and their cost. Your bid cost may have been $0.00 if you received them through a bid giveaway. In this case, just determine how many bids you are willing to spend bidding on a particular item. If you paid for your bids the cost has to be included in your maximum price. If you want a formula it is:

(Bid Cost x Bids Used) + Wining Bid Price = Maximum Price

This is a little complicated to keep calculating during an auction so I just make a simple calculation before I start bidding. I decide on the maximum price I will pay and the maximum number of bids I am willing to use. If I received the bids from a bid giveaway there is no cost to calculate. Otherwise I simply take the maximum price that I am willing to pay and subtract the cost of the bids to get the maximum bid price. So now I have just two numbers to watch as I am bidding: the total number of bids I have used and the current bid price. I stop bidding as soon as I reach either one of these two limits.

Get Started

Now you know how to play the penny auctions smart so get started and have fun. Know why you are bidding for an item and what its real value is to you. Get your bids through a bid giveaway or some other discounted purchase if possible. Write down your maximum number of bids and bid price maximum and keep them in mind as you bid. And good luck to you, it always helps.