Monday, June 28, 2010

Penny auction profitability continued

We made a short Study of Penny Auction website productivity depending on intensity and quality of the internet traffic to the website.


*) Counted as interval between first purchase and last visit.

As can be seen, 100 unique visitors to the auction website bring from 1 to 4.5 paying bidders, each of them can bring $50-60 during his “life”.

The numbers above are taken from real working websites with irregular advertising expenses. We estimate that permanent advertising support can improve average “life” expectancy and income per customer up to 2 times.

The dependence of income in $1,000 per month (Y) on the number of unique visitors per day (X) may be as shown at the following chart:


The revenue percentage will be bigger in case of bigger traffic, because operational costs do not grow as fast as income.

Expected revenue is 30-50% from total income due to the advertising cost, the cost of prizes and operational expenses.

We welcome all followers to share their opinion about above mentioned numbers - are they relevant or not?

Tuesday, June 22, 2010

Penny Auction profitability

Penny auction business became a relatively big industry and because of this the number of interesting information in internet about penny auction profitability is growing.

If earlier the information was mainly spread through blogs, Wikipedia is coming to the fore now.

For general information we recommend the following links:

http://en.wikipedia.org/wiki/Penny_auction
http://en.wikipedia.org/wiki/Swoopo
http://en.wikipedia.org/wiki/Unique_bid_auction