Finding the best home based business is really a matter of perspective. There are many opportunities and income models that create fantastic wealth in the home based arena, the key really is finding something that you are interested in and that is positioned in an industry that you know.Too many would be entrepreneurs set their sites too low when looking for a home based business model. What this means is they look at one aspect of the overall business, for example the compensation plan. There are many companies who put a lot of emphasis on the compensation plan and plenty of inexperienced would be marketers sign up and end up disappointed. The simple reasoning for this is because there are several aspects that make up the entire business model, the monetization model being just one of them.The newbie internet business owner needs to consider the marketing plan and the long term viability of any business. As well as the products and/or services that the business model offers. If the would be business owner does not agree with, or does not like any of the above they should not get involved with that particular business model. There are literally thousands of different types of businesses a would be entrepreneur can get involved with, there no reason to sweat one or two that isn’t enjoyed.Its been stated over and over again that to truly be successful in any type of home based business, ‘passion’ must be part of the equation. This is especially true in the world of home business. And finding the best home based business is really just a matter of finding a business model that you enjoy, that has a product line and or service that you are in agreement with.There are plenty of different types of products and services that can be promoted, so there is no reason to think that a particular opportunity is better or worse because of one aspect of their overall business model. The aspiring entrepreneur should take his/her time and find a business that they are truly passionate about and will enjoy being involved with for many many years.The reality is there is no best business. There is only the best business for you and finding that particular model is really a question of what it is that you are looking for. There are plenty of opportunities and businesses out there that will try to get you involved based on hype and time sensitive offers, do not fall for these. Take your time to get involved with something that is right for you, your personality type and your lifestyle.
Motivated People And Their Success Within A Part Time, Home Based Business
A growing number of people are becoming involved in business opportunities where they are working part time from home. Some of them do so because they are good marketers and others because they want to make lots of cold hard cash. A personal business at home will allow a person to work on their own and in most cases; you can run the business without needing to hire others on a regular basis. A person who owns a home based business is motivated in an entirely different manner as compared to a person who runs a corporate firm.Here is a look at some of the things that motivate people to start a legit home business:• Money
• Performing simple tasks over a short period of time
• Good lifestyle and ability to travel
• Autonomy
• ProfitsBenefits and the Advantages of Owning and Operating Your Own Business:Pulling the trigger to start your own marketing business makes perfect sense regardless of whether the economy is thriving or stuttering. Before starting the best part time business, take a look at the following benefits and the advantages of striking out on your own business venture:• Be your own boss
• More elasticity of options
• Invest small sums and reap big returns
• Do what you love to do
• Be more successful
• Be more productive
• Tax benefits
• Take pride in what you are doing
• Live a relatively stress-free lifeIf you are not satisfied with your present job and if the pay is not good and you are also fed up of all the pressure of working for someone else, then a home based business is the perfect solution for all your problems. These ventures are currently much in favor with most people because they allow you to stay at home and make money without too much stress or bother.One of the main characteristics of a great business opportunity is that you do not have to invest too much money to get it off and running. In fact, you can start a home based business without investing a cent or at the very least you only need to invest a very small sum of money. Secondly, a great home based business is one in which you get to sell products and services that you can sell no matter where the buyers live.A great home based business is also great when it involves selling products and services that are very popular and much in demand. With such products and services, you won’t even have to look for customers because they will come to you.Another characteristic of a great home based business is that it will give you a chance to make huge profits. The start-up costs are low while the returns are high. Competition is less and it is also easy to sell products and services that are in demand. The best digital home based businesses are reviewed in detail in my free guide, which you can find below. However, which one is best for you depends on what you are looking for.I hope this article has been helpful to you in learning more about how you want to approach your future endeavours. Please contact me anytime!
The Point of Budgeting In Small Business
Too many small businesses operate without budgets. And many small businesses that do have budgets aren’t getting as much out of them as they could. We’ve seen it time and again.It isn’t because the mechanics are difficult to manage. Everyone knows the basics of how budgets work: you track money coming in, you track money going out, and you do your best to plan for the future. In fact, the very simplicity of that formula is what leads some small-business owners to consider budgets not worth the trouble.Therefore, what we’ll discuss here isn’t what budgeting entails, because if you don’t already know that, you can find it out with ease. We’re more interested in why you should budget in the first place. Our suggestion, to put it plainly, is that budgeting is a way to amplify the very creativity and adaptability that allow small businesses to thrive.Budgets’ ReputationYou don’t become an entrepreneur because you have a burning love of spreadsheets. At least, not usually. Being an entrepreneur isn’t supposed to be about budgeting. It isn’t supposed to be about paging through endless columns of variable costs or putting caps on spending. It’s supposed to be about having the freedom to blend innovation and risk-taking with passion and expertise. It’s supposed to be about removing barriers, not building them.That being the case, small-business owners often see budgets as antithetical to the very spirit of entrepreneurship. According to this perspective, budgets impose stifling limitations. They’re artifacts of mega-corporate culture devised by clammy-handed people in windowless rooms with poor lighting. They may be necessary evils for sprawling, inhuman conglomerates, but when it comes to organizations that rely on individual personalities and individual decision-making, budgets are more burdensome than helpful.You might say the constraints imposed by budgeting make small businesses less nimble. Since nimbleness is one of their main advantages over larger rivals, budgets actually decrease small businesses’ ability to compete.Or so the story goes.Some of it is accurate. For instance, it’s true that passion and innovation go hand in hand with entrepreneurship. It’s true that small businesses should strive to leverage their size into a competitive advantage. And it’s true that budgeting for small businesses is much different from budgeting for colossal corporations.What’s not true is that budgets impose constraints. Budgets don’t actually impose anything. They merely describe constraints that are already present. Perhaps more importantly, they describe a business’s ability to cope with and even manipulate constraints placed on it by forces internal and external.Constraints and Entrepreneurial CreativityIf you’re an entrepreneur, you’re aware that your business doesn’t operate in a vacuum. It’s part of a staggeringly complex system. For instance, you have your relatively immediate concerns, such as your employees and your local government. You also have your relatively big-picture concerns, such as national debt and foreign trade policy. No matter what, when you start a small business you’re going to be hemmed in by laws, regulations, and unavoidable economic realities, all of which will have a major impact on how you operate.In other words, no small business starts out in a position of unfettered freedom. The very conditions that allow small businesses to exist also impose a variety of constraints. Working capital, interest rates, the minimum wage, the minimum competitive salary for professional employees-there are countless factors that limit what you can do and how much money it takes to do it.You can acknowledge the reality of these factors, but if you don’t have a budget, then you might not know the exact ways they’re affecting you. What particular constraints does a business in your industry have to deal with? Are there some that have a disproportionate impact on you because of the way your business functions? Can you make changes to reduce their impact? Are there constraints that you handle in an especially productive way? Can you turn this productivity into an advantage over your competitors? Do you approach some constraints the way everyone else does, even though you could be doing a better job with them?These are the sort of questions a budget helps you answer. It doesn’t create limitations that weren’t there before. Rather, it gives you a way to assess the pre-existing limitations that every small business in your industry has to deal with. The more thorough your assessment of those limitations, the greater your ability to work within them, work around them, or in some cases, make them work for you.Making limitations work for you is where entrepreneurial creativity comes into play. If you have enough details on your business’s limitations, then you’ll be better able to turn those limitations into innovations. A budget will help you marshal your creative energies and find the opportunities for profit embedded in the market’s constraints. It tells you exactly what assets you have to work with, and helps you map out how those assets can be put to the most productive use given the rules of the industry.After all, most of the market-based constraints you experience will be shared by your competitors, who also have limited amounts of money and freedom. Which of you comes out on top won’t be determined by who has the fewest constraints, but by who does the best job of manipulating common constraints to find the possibilities they hide.Speed, Spontaneity, and ProfitSmall businesses, precisely because they’re small, tend to be better than their larger competitors at taking quick, decisive action. It’s one of their vital advantages. By the same token, it’s one of the challenges that all entrepreneurs are bound to face. You’ll be forced to react on a moment’s notice to emerging opportunities or perils in the market-that’s a given.What’s less certain is the profitability of your reactions. Obviously, acting or adapting fast doesn’t do much good if it yields a loss.So what information will you use to make your quick decisions? Do you have a detailed, practical breakdown of your business’s strengths and weaknesses? Do you know exactly how many resources you can afford to redeploy at a moment’s notice? Do you know how efficiently different aspects of your business tend to use the resources you devote to them? Are certain aspects of your business already strained? Are certain aspects flush with the potential for expansion?A budget gives you a diagnostic readout of your organization. It tells you how much stress the business can handle and which areas can handle it. Hence, it helps you decide whether acting conservatively or aggressively in the short term will enhance your performance over the long term. Without a budget, you’ll be relying too much on guesswork, and many of your quick decisions may be needlessly risky.Supply-chain RelationshipsA budget not only helps you assess yourself, but also helps you assess your relationships with other entities, like vendors and subcontractors. This will be especially important when the market is in flux.As you know, successful entrepreneurship entails evaluating the vast array of forces that constitutes the market and determining where-for someone in your industry, someone with your passion and expertise-the opportunities and roadblocks lie. But no one can predict with any certainty how the market will behave tomorrow. There will be surprises. Sudden chances and sudden setbacks.We’ve already noted that the way you respond to these inevitable surprises will play a critical role in the profitability-or survival-of your business, and that your ability to make the right call at the right time will be drastically greater if you have a budget in place. This is not only because a budget tells you about your own resources, but also because a budget helps you deal with other organizations that affect you.Let’s say you experience a sharp increase in demand for your product. It’s good news, but it brings up questions: Do you have enough working capital to provide your product to a large number of new customers/clients? What are the current resources of each division of your business? How many more resources does each division need if it’s going to ramp up its activities? How efficiently does each division tend to use its resources?These are all internal questions that may well lead to others, such as: What do your vendor accounts look like? How much new inventory can you afford to purchase? What type of sales will you need if you’re going to pay off the new purchases on time? Can you afford to hire subcontractors to help with the push?And, of equal or greater importance: What’s your plan for a downturn in demand? Will you find yourself in a precarious position with your vendors? Will you be able to keep promises to new customers? Will you be able to pay your subcontractors for the hours they’ve put in?Indeed, budgeting can provide invaluable support for all your relationships. As noted on Inc.com, “your suppliers are in all likelihood mapping out their expectations for the year and you can help them do so by providing your outlook. As a best practice, you should share your budget and the variety of scenarios you might face to see whether they can handle each level of demand” (Field 2010).Since your business is one element in a network of other businesses, it’s important for you to be able to communicate both your capacities and your expectations to the people you rely on. A budget serves as a tool for facilitating such communication. It gives you a concrete way of describing not only where you stand, but also where you will stand in a given scenario. Thus, it helps foster strong partnerships and avoid uncomfortable conversations.This doesn’t mean sharing every detail of your budget, nor does it mean sharing some details with everyone. It simply means that guarding your budget like a state secret takes away some of its efficacy. You can use select portions of your budget to assist you in negotiating with critical partners-i.e., you can be prudent about the information you divulge without being obscure. How much do your current business partners know about your budget? Is it enough for them to understand your capacities and your needs?The BankSpeaking of business relationships: you don’t want to mess around with the bank. Plain and simple. This is a relationship that should be as friendly and open as possible. And what do bankers like? Budgets. As the American Bankers Association (ABA) says, “You are flying in the dark financially if you don’t have a budget for all income and expenses.”Come to them without a budget, and bankers are going to feel like you’re wasting their time. They’re certainly not going to be interested in loaning you money (or more money). “Prepare for your financial review with your banker,” says ABA. “Have current inventories, cash flows and balance sheets ready.”When your banker asks you how your debt is structured, and whether you have an imbalance between long- and short-term debt, what are you going answer? Trust us: if you show up to that meeting with a budget, you’ll be glad you did.FlexibilityJust as the market’s unpredictability makes budgets useful, it also makes them fallible. A budget is like any plan: it will contain inaccurate predictions and require ongoing revision. That’s simply a condition of commerce; some academic models are predicated on entrepreneurs having perfect foresight, but we all know that’s not the case. Businesspeople, even the world’s most celebrated financial prognosticators, get it wrong sometimes.That doesn’t render planning completely useless. Even if your plans don’t entirely match the way reality unfolds, they serve as benchmarks against which you can assess your progress. They record where you wanted to go, where you actually went, and why the two didn’t coincide. In that way, they indicate which areas of your business are performing well, and which need to be modified in order to meet next quarter’s goals.When it comes to small-business planning, certainty is off the table. Nothing is guaranteed, including budgets. But setting expectations and monitoring progress remain indispensable to long-term survival. They help small-business owners analyze why they’re drifting off course, and also help them formulate corrective measures.How do you see a budget? As a static report that turns old news into flimsy predictions? Or as a series of living documents that records how you adapt to change?PersonnelThorough budgeting calls for a great deal of effort, and many small-business owners can’t spare the necessary time or energy. Frankly, while the minutiae of budgeting are of interest to the entrepreneur, they are not the entrepreneur’s main job. If they were, then a good head for numbers and a background in financial analysis would be prerequisites for entrepreneurship. Yet plenty of small-business owners have succeeded without an affinity for mathematics or statistics. Entrepreneurs don’t all begin as certified public accountants.That being the case, most small-business owners hire a bookkeeper. A bookkeeper collects and organizes your financial information, which, again, is time-consuming and requires close attention to detail. Too much time and too much attention for small-business owners to sacrifice. But even if you’re not involved with gathering and sorting your financial information, you needn’t remain aloof from it. To get the most benefit from budgeting, you’ll want to be accustomed to reading your financial statements and locating important data in your financial system. When you meet with your bookkeeper, are you talking about his or her methods? Is he or she showing you how your financial information is organized? Are you able to navigate your bookkeeping software on your own, so as to pull up specific pieces of data without your bookkeeper’s assistance?Proper bookkeeping is important, but it rarely goes far enough in the analysis department. You’ll notice that the bulk of our discussion has revolved around using budgets to orient yourself in the market-i.e., using them to take advantage of opportunities and to minimize risks. That requires more than tabulating numbers; it requires interpreting them. It requires fitting your numbers into a larger picture.Is there anyone in your organization besides you who (1) monitors your finances on the close-in, detailed level, and (2) relates the details of your finances to your big-picture performance? If not, chances are you’d benefit from a dedicated financial person. Someone whose duties involve painting a comprehensive picture of your financial universe-more comprehensive, that is, than the picture you’re able to paint on your own, simply because you have other things to do.As with most aspects of running a small business, getting the most out of budgeting requires skillful delegation. If a budget is going to inform your decisions at major turning points, then it’s a good idea to have someone to consult with, someone who’s been looking at the same numbers as you while also looking at the same problems.TakeawayThe value of a budget doesn’t rest on the accuracy of its predictions or the stringency of its cost-cutting. Instead, the value of a budget rests on how well it articulates your business’s financial strengths and weaknesses. A budget exists to help you balance risk against opportunity, to help you determine whether aggressive or conservative action is the right thing for the moment. It also exists to help you communicate with your business partners-to, in other words, cultivate healthy, mutually beneficial relationships with the organizations you rely on.Above all, a budget exists to de-mystify, or express in concrete terms, the limitations imposed on your business by the market. Thorough budgeting, especially when undertaken with the right personnel, can enhance your creative initiatives and merge adaptability with profit. In short, budgeting is a way to sharpen, not blunt, a small business’s advantages.CitationsAmerican Bankers Association. Ten tips for small business owners during tough financial times. http://www.aba.com/Press+Room/PR_Small_Business_troubledtimestips.htm.Field, Anne. 2010. How to budget and manage inventory for 2011. Inc. http://www.inc.com/guides/2010/10/how-to-budget-and-manage-inventory-for-2011.html.
Internet Marketing – Do You Understand It?
It’s no secret these days that internet marketing can do wonders for your online business and it can mean a variety of things.
If you are serious about your professional or business goals, then you ought to know how the different forms of internet marketing can lead to your desired goals and success, because this is an invaluable tool in your marketing program.
It can encompass affiliate marketing, selling your own product or service online, or even selling on internet auction sites like eBay and UBid. But even for brick and mortar companies, even those who don’t sell anything online but rather cater to local customers, it can expand the business and give the company more exposure locally. You can market your business Locally and make a difference. But professional internet marketing can skyrocket your business. Businesses that use it can also save money because of a reduced need for a sales force.With an online business there’s no inventory to carry, no shipping of goods and virtually no overhead. Internet marketing eliminates the cost of production, construction and employees.
Overall, marketing via the internet can help expand from a local market to both national and international marketplaces. Using it can bring you thousands of visitors who are potentially interested in your business. It can include information management, public relations, customer service, and sales.
Nowadays, targeted selling can be implemented using various means but each of them has the same goal of attracting more visitors to your website, increase traffic, and ultimately increase sales. It can do all that and so much more because exposure, response, and overall efficiency of internet media are easier to track than traditional off-line media-through the use of web analytic. For instance-IM can offer a greater sense of accountability for advertisers. Seen in various formats and unlike traditional marketing media (like print, radio and TV), entry into the realm of internet marketing can be a lot less expensive.
It may take a while but, if done right, building a website for internet marketing can be a very successful way to market your business online. Whether your company has an e-commerce, brochure or media site, strategy internet marketing can help drive increased organic search traffic to your site by identifying who your target audience is, how they search, and focus in on attracting them in larger numbers. Any aspiring candidate who wants to enter the world of internet marketing can achieve higher revenue by viral marketing. Viral Marketing: Describes any strategy that encourages passage of marketing message by individuals to others, creating the potential for exponential growth in the message’s exposure and influence. Such strategies take advantage of rapid multiplication to explode the message to thousands, and even millions.
opt-in e-mail newsletter is just one of the many techniques internet marketing can utilize in your e-mail marketing campaign. Working with a broad spectrum of companies means with their pool of experience and creative flair text, internet marketing can bring ideas to life, with attention grabbing results. Internet marketing can be tricky because the area is so diverse. If you have joined an affiliate program/company, merchants of that program will provide you with advertising tools and copy that you can use for marketing. Advertising tools include, banners, pop-ups, e-Courses, product data-feeds, periodic articles, classified ads, text Links, interviews.
These advertising tools will be discussed in later posts. Note: While we may know that doing affiliate marketing can be a good source of income, we need to put in mind that this is just like any type of business that we may want to get into where we will need to put in a lot of effort. More and more businesses are understanding that internet marketing can be used to their benefit in a number of specific ways, and with many benefits. With all of this said, Internet marketing can be a tangled web of confusion if you don’t have a plan, and while it can be an enjoyable and profitable experience and can offer tremendous value over traditional marketing avenues, it can also be very frustrating, time consuming, money draining and anti social and there may be considerably more risk for the unaware.
Please note that Internet marketing can offer tremendous value, just be sure that you investigate the opportunities with a critical eye to avoid the potential pitfalls. A career in online marketing can fill the needs that many businesses are finding themselves with. In order to truly benefit from the solid foundation that internet marketing can offer your career, you simply need to invest yourself in learning how to get traffic to those businesses you are trying to promote.
Online Advertising: Remnant Traffic
What is “remnant traffic”, and why it is good for advertising?
‘Remnant traffic’ myths.
There are a multitude of myths and misconceptions concerning different aspects of online advertising which are still misleading for both Internet users and advertisers alike. One of these misconceptions is the definition of ‘remnant traffic’. Some advertising networks and agencies have their own glossary open for public use, where remnant traffic is often defined as “the most inexpensive ad inventory traffic by disreputable sites or empty ‘parked domains’ advertising inappropriate content”. Is remnant traffic really as bad as we are led to believe?
In order to understand what remnant traffic truly is let’s look more closely at what the traffic is the remnant of.
Premium traffic: The easiest way to understand is to imagine the banner of a famous brand on a top website’s homepage. In fact premium traffic is the “cream” of a website’s audience. Websites that provide premium traffic are guaranteeing to the advertiser that the audience will note the ad. They will primarily display the banner at notable places so ALL visitors to the site will see it.
This gives us our opposing definition of ‘remnant traffic’. First of all this term had been considered as the unsold inventory of our big brand advertiser above. Another stereotype is that historically remnant traffic was thought of as sold by low traffic ‘unpopular’ websites only, as they have no hope of attracting big name brands as advertisers. In the absence of alternatives these low traffic sites place banners from blind networks, which offer inexpensive ads often of doubtful content and quality.
Thus there formed a situation where premium traffic is considered as top websites traffic and remnant traffic is the traffic of the other less popular resources online. That would sound quite reasonable if it wasn’t found to be largely untrue under detailed consideration. In order to sort out the fact from the fiction let’s look at the nearest relation of online ads – advertising on TV, radio and traditional print media.
As it turns out there was already a very close definition of ‘remnant advertising’ in TV, radio and print media.
Is there ‘remnant advertising’ in the other media?
TV remnant advertising is advertising at any time except prime-time. The further from prime-time an advert is shown, the more discounts a channel offers to advertisers. Discounts on TV may reach 90% for unsold inventory. Discounts on radio are also prevalent and depend on time of broadcast and usual audience listening figures. These discounts may range from 25% to 75%.
Another rule operates for printed media as they are selling physical advertising space. Advertising space nearer the middle of the newspaper is priced vastly differently from a front page advert cost. In this case a direct comparison can be made between advertising on the front page of a newspaper with a banner on the homepage of a popular website.
The win-win nature of remnant advertising was accepted long ago in traditional media advertising and so the approach to premium and remnant ads was formed as the market matured. It is obvious and logical that those media may offer discounts up to 90% for unsold time or space. This is called remnant advertising. In this case both the channel and the advertiser are gaining. The channel covers 100% of scheduled advertising inventory; the advertiser is placing his advert with resources required with a great discount. So as we can see the place for remnant advertising was found in traditional media. Further remnant advertising is working effectively and not giving rise to the rejection of potential participants whether they be advertisers, advertising agencies or publishers.
‘Remnant traffic’ as it is.
Now let’s return to the Internet. If you look through the homepage of any top website, you will usually see only big-brand advertising in all the most notable places. Obviously this is premium traffic, somewhat analogous of prime-time on TV or magazines’ or newspapers’ front pages. If however you leave the page and return to it once or twice, the displayed advertising begins to change before your very eyes from a big brand to smaller or less well known advertisers or brands.
It turns out that as well as TV channels sell their prime-time, large websites sell impressions with a ‘first demonstration’ privilege. By refreshing a page several times we leafed through the big brand premium ad traffic and may now in fact see true ‘remnant advertising’ on a popular website. So that means top sites also have remnant traffic don’t they? Undoubtedly they do and they monetize it as well as traditional media do with their remnant advertising through great discounts. Separately it should be noted that this is the same mythical remnant traffic, which some networks and agencies associate with something inexpensive, negative and full of inappropriate content. These terms are obviously mismatched with the reality of remnant ads on top websites. On these top websites, remnant inventory may still be very expensive and high quality both for ad placement and ad content. Thus we have dispelled this particular myth.
But what should small low-traffic sites do? They do not attract huge site traffic numbers and thus cannot place premium class brand advertising. Are there any alternatives except the placement of inexpensive ad of sometimes very doubtful content, as described at the beginning of this article’s?
Can we benefit from using ‘remnant traffic’?
There are currently four main alternatives each with different pros and cons:
(a)You may place contextual advertising from one of the big search engines. Such services offer banner display advertising too. Among the advantages we should mention flexibility and adaptability of ad settings, rotations, localization etc. The disadvantages include delays with site verification and authorization to collaborate this program and delays with revenue payouts for displayed ads. Example: Google AdSense
(b)You may place a banner from one of the ‘blind’ ad networks. The principal advantages are that it is fast, simple and will generate money for anybody without exception. The disadvantages are lower revenues and the very real possibility of the appearance of inappropriate or shocking advertising content. Example: Clicksor
(c)You may register at a specialized remnant traffic ad network. These networks specialize in monetization of remnant traffic only. Both medium and high traffic sites use their services to fill their remnant ad inventory. The principal advantages are a generally high return in comparison with the alternatives and guaranteed clear and appropriate ad content. The main disadvantage is the current inability to monetize Chinese, Korean or Indian traffic sufficiently using these ad networks. Thus this alternative should be chosen in the case of sites with predominantly European or US traffic. Example: Fidelity Media
The Finer Points of Internet Auctions
WHAT IS A PENNY AUCTION?
Penny auctions have exploded in popularity with the massive growth of the internet. However, few people know the true origins of penny auctions.Beginnings actually stretch back to the Great Depression. Those were hard times for everyone, but even harder for farmers. Farmers struggled to bring in steady income because of droughts and crops not selling as well as they had previously. As a result, the banks would foreclose on the farmers who couldn’t keep up with their mortgage payments.
The banks weren’t satisfied with just repossessing the house, they wanted to raise as much capital as possible, so they resorted to selling off the possessions of the owners of the repossessed houses. There was not much the farmers could do about it so they began bidding ridiculously low prices, pennies, on the items while threatening others who dared to bid higher than a few pennies.
The auctions of today hardly resemble their tremulous beginnings. Being part of a penny auction today is exhilarating, fun, and addictive. It combines the selling format of auctioning with a little bit of chance factored in.Auctions are a game of strategy but also a game of luck.
The premise behind penny auctions is giving people the chance to win an item at a drastically reduced price.Auctions make that possible by spreading out the cost of the product among multiple bidders. In order for a person to take part in an auction, they must pay a set price for each bid. For example, if a person wanted to bid on a fifty dollar Amazon gift card then he would spend a dollar for each time a bid placed. If he ended up winning the gift card, then he would only have spent a few dollars for a fifty dollar gift card. Usually penny auctions sell bids in packages.
HOW PENNY AUCTIONS WORK!
The main foundation of penny auctions is the pay-per-bid format. It is the key that allows bidders to win items at the fraction of their retail value and allows the auction owners to keep their site profitable. Most y auction sites run on the same premise: people pay a set amount for each bid, whenever a person places a bid within the closing seconds of the auction time will be added, the last person left with a unique bid after the clocks runs out will win the item. There are a large variety of items that can be won, but they tend to be popular electronics or gift cards to popular stores.
There are two types of auctions: lowest unique bid auction and highest unique bid auction. Lowest unique auction sounds confusing but it is actually quite simple. A unique bid is when only one person has a bid at a certain price. Bids usually start at one penny, a bidder can then place a bid at two pennies. Until another bidder places a higher bid, the most recent bidder will be the lowest unique bid because that was the only bid at two cents and nobody bid higher. However, penny auctions generally don’t stop at one penny. It is not uncommon to find auctions that end up at a couple hundred dollars based on the popularity of the item being auctioned. However, the same principles apply for those auctions. Highest unique bid auctions follow the more traditional auction format such as eBay. The person with the highest bid at the end of the auction wins the item.
Auction site owners turn a profit by selling bids. Say twenty people are bidding on a ten dollar gift card at one dollar per bid, at the end of the auction if there were twenty bids placed in total then the site owner would have made twenty dollars with a ten dollar profit.Auctions do seem like a win-win situation:The site owner makes money while the bidder gets an item for dirt cheap. However, not everyone wins in penny auctions. The people who paid one dollar each bid but left with nothing to show for their investments will not be so happy.
HOW TO WIN!
Penny auction has a lot of chance mixed into it, but one can incorporate strategy that will help raise the chances of winning. Playing smart can make all the difference between gambling and auctioning.
The first crucial tip to winning penny auctions is to know how to manage your bids. Your goal should be to win as much as possible without spending a ton of money buying bids. Managing your bids means that you should already know how much you are willing to risk in order to win an item. The amount of capital you are willing to risk will determine how many bids you can use. Once you know how many bids you have to spend on an item, then you will be better able to manage how and when you place a bid. That will keep you from blowing away all of your bids in the first few seconds of the auction.
The next tip is to practice time management. When fighting in the trenches of penny auctions, you have two enemies: other bidders and time. Knowing when to bid is a must if you want to have success. Placing a bid when there is a lot of time left on the clock is never a good idea. You have to remember that the key to winning a penny auction is being the last one standing when the clock runs out and that each bid increases the amount of time left. It would be a good practice to wait until the last few minutes of the auction before you begin to bid.
The final tip for successful auctioning is to keep your emotions under control.Auctions have a lot of similarities to gambling, and just like gambling, your spending can get out of control. If you keep your emotions level, it will keep you from making rash decisions and blowing loads of cash. Keep your mind clear so that you can gage the behavior of the other bidders and outsmart them.
HOW TO AVOID SCAM SITES!
Penny auctions are a great addition to the web whether you want to win an item that otherwise you wouldn’t be able to afford or if you simply enjoy the thrill that comes with bidding in auctions. Unfortunately, scam sites have tarnished the reputation of the legitimate penny auction sites. However, there are ways that you can protect yourself from scamers and enjoy your auctioning without having to worry about losing your money due to dishonesty.
Checking the reputation of the auction site before you start spending your hard earned money is always a good idea. Chances are other people have tried the site before you and some of them have left reviews. The reviews are your way to gage whether a auction site is trustworthy or not. If a site is getting overwhelmingly negative reviews, then that is a clear indication that you should steer your business elsewhere.
Another tool you can use to protect yourself is checking the Alexia ranks of the auction sites. Alexia rank will give a solid view of how much traffic the auction is getting. If you see a huge difference in the amount of traffic Alexia is projecting and the amount of active bidders on the site, then warning signals should be ringing in your head. Some auction sites have been known to set up robots that automatically bid on projects in order to keep the auction going and inflate the price. That is known as shill bidding. You can sniff out those sites by comparing the traffic the site should be getting to the amount of users using this site.
CONCLUSION!
New legislation may come out later down the road that will officially make penny auctions gambling, but until then, it is a fun, exciting auction that allows one to win the item they’ve always wanted but couldn’t afford.Auctions are also quite lucrative for the site owners because of the pay-per-bid strategy they’ve incorporated. Penny auctions had humble beginnings with farmers who just wanted to get back at the banks who kicked them out of their house. More recently, auctions have enjoyed an explosion in popularity with the rise of the internet.
There are two main formats fora auctions, lowest and highest unique auction, however they both run on the same premise where the last unique bid wins the item. Winning a penny auction will require a certain amount of mental tactic and a bit of luck. However, you can increase your odds of winning by practicing certain techniques such as managing your bids wisely, learning how to work with the time, and keeping a level head and your emotions under control. When you combine those three strategies to your bidding plan, you will find that you win a lot more often.
It is important that you do your due diligence to protect yourself when participating in auctions. Not every auction is run by honest and trustworthy people. There are people out there who just want to take your money. You can protect yourself by ensuring that you only bid on sites that already have a very positive reputation from real users.
How to Find Great Live Auctions for Resale Items
Hi, my name is Walt. I’m an auctioneer with 25 years of experience in the auction business and licensed in the state of MA. I own Quick Auction Service, a company that specializes in building and running custom auctions, I’m also the webmaster of my own site and have been on eBay for 8 years. Besides eBay, the types of auctions I run most frequently are antiques and on-site estate auctions, although I’ve run everything from business overstock auctions to charity & special event auctions.
I enjoy sharing my knowledge and stories of the auction business. My goal for article is to help folks get the absolute most out of their auction experience.
Whether your fresh out of the package or a seasoned dealer I think I can offer something in this article to help you with your auciton adventures.
There may be as many reasons to attend auctions as there are types of auctions to attend. Maybe you want to attend an auction to buy items for re-sale on eBay, or some other market. Maybe you want to furnish your home with wonderful antiques, or you want to furnish your home as inexpensively without sacrificing quality.Some folks are just looking for a fun night out. With a little perseverance all these things are possible.
There are antiques and estate auctions, auto auctions, overstock auctions, absolute and no reserve auctions, real estate auctions, specialty auctions where only one genre of items are sold, tailgate auctions, live auctions, online auctions, sealed bid auctions, silent auctions, charity and fund raising auctions and many more.
Can you really buy for pennies on the dollar at an auction? You bet! Many times I’ve seen folks buy and re-sell at the same auction on the same night for a good profit, although be advised, this should only be done after the auction is over.
There are a lot of ways to find an auction, but here are some tips on how to find and attend the best ones.
Visit the genre of shops in the area that apply to the type of auction you want to attend. IE: If your looking for a good antique auction to attend, stop in the local antiques shops and ask for what there are for good auctions in the area. Sounds obvious right? But listen to what they don’t say as well as what they do say. Oftentimes when a dealer speaks poorly about an auction he or she attends, it may be likely that they are trying to keep a good thing secret. Think for a moment, why would a dealer keep attending a lousy auction?
Newspaper ads: I personally like to find ads in the classified ad section rather than flashy display ads. Flashy ads are usually indicative of an auction that will be high priced, may have reserves, (a set price on an item), and usually an enormous crowd. While any auction can be profitable to attend, it is usually best to steer clear of the glitzy ones, at least for the beginner.
Here’s the minimum you want to find out before you go. If there is a phone number in the ad, call and ask for the terms of the sale. What forms of payment do they accept? Is it an absolute auction? An absolute auction is one that has no minimum or reserve bids on items. These are the best auctions to attend! Is there a buyers premium? A buyers premium is like a tax that everyone who makes purchases at that auction must pay above the winning bid price. Most auctions these days do charge a buyers premium, 10% is not unreasonable but I feel much more than that is greedy, and the auctioneer that charges over 10% is counting on most bidders not doing the extra math as the bids quicken in pace.
A fair auction will have ample time to inspect the merchandise, usually at least 2 or 3 hours. Find out when inspection starts and make sure to attend! Never attend an auction if you can’t make the inspection, not unless your prepared to gamble. Most auctioneers sell at a rate of about 100 items per hour, which is why they sell “as is”. They simply don’t have the time to give a detailed description of all the items. Since almost all items at auction are sold AS IS, there are sure to be some damaged, refinished, fake and incomplete items at any given auction. Beware of any auctions that offer very little or no inspection time.
Good auctions will usually have 150 to 400 lots. A lot may be one item or a group of items. The exception to this are specialty auctions, auto auctions, real estate auctions etc.
When you attend your first sale, take note of the 1/2 dozen or so dealers that buy the most often. See if you can find out about other area auctions they attend.
When you do find an excellent auction, attend it as often as possible. By frequenting good sales, you help increase the bottom line of that business. It’s difficult for many auctioneers to keep the quality of merchandise consistent, so good attendance certainly helps. And when an auctioneer gets to know you as a buyer, he/she will go out of the way to accommodate you, to keep you coming back.
Hiring An Auction Company
Estimating your assets value:
Typically, one of the first questions a business owner will ask me is, “how much will the assets bring at an auction”. After taking the time to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the current market trends. It is important that the company give realistic expectations so the seller can make informed decisions based on their best interest.
Compensation and Expenses:
Is the company you are considering working for you or against you? The agreement you decide may determine this.
A business owner should carefully consider how the auction company is compensated. The most common commission structures include: straight commission, outright purchase of assets, guaranteed base with a split above to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee structure.
In a straight commission structure, the company is paid an agreed upon percentage of the total sale.
In an outright purchase agreement, the auctioneer simply becomes your end buyer. The company purchases your assets and relocates them. While this can be an option in some unique situations, keep in mind that they will want to purchase your assets at a very reduced price to make a profit at a later date.
In a minimum base guarantee, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything above that amount either goes to the auction company or split with the seller. While a seller might feel more comfortable doing an auction knowing that he is guaranteed a minimum amount for his sale, keep in mind that it is the best interest of the auction company to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher compensation for the sale.
In a flat fee structure, the auctioneer agrees to show up for the sale and call the auction. There is no incentive for the auctioneer to get the best prices for your assets. The auction company is compensated regardless of the outcome of your sale.
What is the best option for business owners? In my experience, an agreed upon straight commission structure. This puts the responsibility on the auction company to offer the best outcome for everyone involved. There is an incentive for the auction company to work hard for both parties, set up and run a professional sale, get the highest bid and sell every item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.
Auction Expenses:
In most auction agreements the expenses to conduct an auction are passed to the seller. If the auction company pays for the expenses, it is simply absorbed in higher commission rates.
All expenses should be agreed upon in advance in a written contract. Typical expenses will include the costs of advertising, labor, legal fees, travel, equipment rentals, security, postage and printing. A reputable auction company will be able to estimate all expenses based upon their experience in previous auctions. An agreement should be actual costs charged as expenses, not an estimated amount.
Advertising is typically the highest cost in conducting an auction. The auction company needs to set up an advertising campaign that will promote the sale to its best advantage and not overspend to simply advertise the auction company.
Once the auction is complete, the auction company should provide a complete breakdown of all expenses to the seller, including copies of receipts within the auction summary report.
Buyer’s Premium:
What is a buyer’s premium? If you attend auctions regularly, you are very familiar with this term. The auction company charges a fee to the buyer when they buy an item at auction.
The buyer’s premium has been around since the 1980′s and is standard auction practice. It was first used by auction houses to help offset costs of running brick and mortar permanent auction facilities. Since then, it has spread to all aspects of the auction industry. It is prominent in online auctions and allows auction companies to cover added expenses incurred from online sales.
It is the responsibility of the auction company to provide clear disclosure of the buyer’s premium to both the buyers and the sellers. Those not familiar with auctions are often taken back by the buyer’s premium. They looked upon it as an under handed way for the auction company to make more money. Reputable auction companies will provide full disclosure within the auction contract, advertisement and bidder registration.
Typically, an auction company will charge online buyers a higher buyer’s premium percentage than those attending an auction in person. Extra fees are incurred with online bidding and are charged accordingly to online buyers. This provides the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there is no way to do this.
Pre-Sales:
We’ve all been there. We’re looking forward to attending an auction only to find that some items were sold prior to the auction date.
As an auctioneer with over thirty-six years of experience, I can honestly state that pre-sales will hurt an auction. When a company decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online sources, equipment vendors or to other businesses. The seller receives instant cash and avoids paying a commission to an auction company.
Auctioneer’s find themselves appearing to acting in a self-serving capacity when potential clients say they are planning to sell off parts of their inventory prior to an auction. It’s hard not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to earn a commission on those sales but it is more important that the auctioneer protect the sale from potential negative backlash that comes from pre-selling. The buying public knows when an auction has been “cherry picked” prior to the sale and it reflects in their bidding. It becomes a sale of “leftovers” and that impacts prices.
A buyer who purchases prior to the auction usually does not attend the sale. They already bought equipment at a good price with no competition. If they do attend the auction, they tend to let others know of their great pre-sale purchases which again, impacts prices and the overall excitement of the sale.
It is important to understand that auctions work best with a complete inventory. You want competition on your higher end equipment. The easy to sell items make it possible to gain respectable prices for hard to sell items.
When a business owner decides to liquidate their equipment assets, there is only one opportunity to do it right. Hiring a reputable auction company will assist you with a professional, orderly and timely liquidation.
Five Tips for Selling at Live Auctions
Ah, the old-fashioned country auction! The idea of a country auction conjures up certain images for people. The image of a fast-talking auctioneer offering up an antique table or chair is a popular example.
People who are buying household goods or collectibles are looking to get their items at the lowest price possible. However, the people who are selling their items at auction are hoping for the highest price!
Unless a person is in the business of buying and selling antiques or other items, not a lot of thought goes into how goods are prepared for sale via the auction process. However, if you are one of the growing number of people using auction venues to sell your collectibles or other inventory, there are a few things to learn first about how to sell at auction before you bring a truckload of stuff over to the next event.
Tip 1: Make sure the things you want to sell are a good “fit” for the auction house you’ll be using.
Never bring a load to an auction house without actually having been to one of the previous auctions. It’s important to get a feel for the type of goods that the house sells. For example, at one very rural country auction it was common for the owners to sell live chickens, pots and pans, car parts, and farm equipment.
After close investigation, this would not be the right venue for selling your daughter’s “Hello Kitty” collection. On the other hand, the spare John Deere parts that you bought at last week’s yard sale might be just the right thing for the buying crowd at this auction.
Tip 2: Be sure you clearly understand the terms and policies of the auction house.
Visit with the auctioneer ahead of time. Call to find out what the best days and times are to visit. One of the worst possible times to drop in for an informational visit with an auctioneer is the day of the auction. Call ahead and ask. While you’re at it, find out what are the best days and times to drop your stuff off.
Once you have a little time with the auctioneer, you’ll be able to find out what type of commission he or she takes from consigners (which is you), and what type of paperwork might be needed. Some auction houses send out Form 1099 tax forms at the end of the year. An auctioneer may need to see your identification and have you fill out a W-9. Be prepared.
Find out what happens to your items if they don’t sell. For example, some auctioneers may have a minimum starting bid. If, for some reason, one of your items does not sell, it may be grouped with another one of your pieces. Know the auctioneer’s strategy beforehand so that you aren’t surprised on pay day.
Tip 3: Make sure the auctioneer knows what you’re selling.
It might be perfectly obvious to you that the signed print you are consigning is a rare and valuable piece of art. However, the auctioneer may not know this particular artist. Make a note of anything particularly special about your items, and leave the note with the piece. Be sure to tell the auctioneer about it as well. He or she might determine that this is something to highlight on the company website or in the newspaper listing.
Tip 4: Present your items neatly.
No one likes to have to dig through a box full of grimy and greasy car parts to see what treasures might be in there. Separate the parts and lay them out on a flat, or use more than one box to de-clutter the lot.
There is no need to buy fancy display boxes. It’s easy enough to go to the local convenience store or supermarket and ask if you can have the emptied boxes or flats that they are discarding.
While it’s good to present clean items, take care not to ruin the value of anything by over cleaning. For example, if you find some old cast iron cookware, clean the obvious dirt and grime, but don’t scrub it to its original finish. For many people, this ruins the value of the item. So, clean and tidy and organized is the key here.
Tip 5: Don’t complain to the auctioneer if your stuff doesn’t sell for as much as you’d like.
The phrase to remember here is, “You win some; you lose some.” That’s just the way it is. There are some days where an auction house is loaded with people who all seem to want what you’re selling. There will be other days where the crowd is sparse, and the bidding is simply not competitive.
Remember that it’s in the auctioneer’s best interest to sell your things for the highest possible hammer price. But sometimes, it’s just not going to be a stellar sale. The auctioneer is only human, and is also disappointed if a sale doesn’t go as well as planned.
If you notice that every time you bring a bunch of goods to sell that you’re not realizing as much as you think you honestly should, try another auction venue and compare apples to apples. That is, bring the same types of items to the new auctioneer and compare the results.
Unless the auctioneer is particularly disagreeable or inconsiderate to you or buyers, there is no reason to confront him or her about a sale. If you find you just don’t care for an auctioneer’s style or methods, find another one. Believe me, there are plenty of them out there!
The primary thing to remember as you learn how to sell at auction is that the business is unpredictable at best. You will have good days, some not-so-good days, some great days. The more you sell, the more experience you will gain, and the more enjoyable the business will be.
Real Estate Auctions – The New Land Rush
On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.
Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.
Real Estate Auctions Work in Up or Down Markets.
Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.
The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.
When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.
Evaluating Your Real Estate for Auction
Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.
Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.
Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.
Locate a Qualified Real Estate Auctioneer
Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.
Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.
You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.
Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.
Types of Real Estate Auctions
Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:
Absolute Auction
The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.
Minimum Bid Auction
Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.
Seller Confirmation or Reserve Auction
With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.