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Monday, October 11, 2010

Starting a Penny Auction Site

Think Big, Start Small
It's important to start small.  No matter how well you plan ahead, there will be unforeseen obstacles you may run into the first day/week/month, and keeping it small at first will help to sustain the site while you "work out the bugs."  Remember the statistic that 50% of all businesses fail within the first five years.  With penny auction sites, we believe this statistic is expedited, that is, 50% of all auction sites fail within the first five months.  So, it's important to keep thinking big, but start small, and 'feel' the market out.

Make sure you also target certain markets.  Don't try and sell everything at once, or just the items that are small net profits (i.e. gift cards and bid packs).  Some of these sites have a certain target in mind (i.e. Penny Purses or Penny Laptop).  The age old saying, "If everyone is your customer, then no one is your customer," rings true for this industry as well.

Targeting certain markets also applies to geography.  When making a marketing campaign, choose certain geographic locations known to you.  This will help, as you may understand the culture and what sells well in that city/state.  Performing practical market research is important BEFORE starting your auction site.  You will be that much more successful, and by planning ahead, you will find profitable niche markets that have not yet been overridden in the penny auction industry.
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