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Friday, February 15, 2013

3 ISSUES THAT CAST A SHADOW OVER PENNY AUCTION INDUSTRY


Being young and instantly developing, penny auction industry nowadays encounters three main problems that have negative impact on this industry. Let’s try to understand these three issues and find the ways to avoid them.

PART I. What may cost fraud for a penny auction owner

It is very sad to see how fraudulent penny auction websites undermine the credibility of penny auctions in general. Such factors as dishonesty of the owner, fair to lose initial investment or lack of understanding of how to make your PA website successful cause unpleasant stories of scamming people.

It is not a secret that it is easy to cheat customers. One can ask friends to create accounts and bid with real customers in order to make the price higher. Another slippy method is to create “empty” accounts and to make them bid automatically or to use special programs, who create “bot”, “shill” or “ghost” bidders.

But the golden rule is simple – be honest. It’s naive to think that customers are fools. Probably some of them even have more experience in penny auctions than novice owners. No doubt people realize very fast that the website is a scam and will never be back.

And losing customers is not the only problem. Two cases, happened lately, show, that authorities started to apply measures against unfair penny auction owners. It comes to thousands of dollars that have to be paid back. More can be read here:
www.spokesman.com/stories/2013/jan/20/bbb-tip-of-the-week/
www.dailyfinance.com/2010/09/30/penny-auction-site-busted-using-software-designed-to-cheat/

An advice for those who still plan to make fast money at the expense of customers – think about your reputation - it is something what is easy to lose and impossible to return. Instead of trying to cheat, it is better to pay attention to the advertising and to stimulate your customers to bid more and to come back to your website. Think about promotions, loyalty programs, competitive cost of bids and shipping, products, rewards, etc.

Parts 2 and 3 of this article will be published in our next posts. Welcome back.

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