« Older Entries

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.

Tags:

The Various Advantageous Features Of Small Business Start Up Loans

The most essential requisite for starting a new business is finance. Because banks and other conventional lending sources are apprehensive about giving loans to start up businesses, it is an important task for these business owners to arrange for appropriate financing sources. Since there is a huge difference between small business start up loans and loans for established businesses, it is extremely important to find a suitable lending source according to the requirements of the business. Start up loans are more dependent on loans for all of their financial needs than established businesses, and needs to be financed for almost everything required to set up the business. So before you start a new business, it is overly important to make a detailed research of the market to find the most appropriate lending source and loan deals for your business.Let us discuss some of the important features of small business start up loans:
These loans are mostly provided by the Small Business Administration (SBA), which is a United States government agency providing financial support to small businesses and aiming at building up the strength of the country’s economy by supporting the establishment of small businesses. SBA does not provide these loans directly to borrowers, but through private-sector lenders that are guaranteed by the SBA.
Since start up business owners do not have enough capital, these loans are mostly obtained at lower interest rates.
SBA acts as your guarantor, and helps you in acquiring business start up loans in case you do not possess properties for mortgage purposes.
Small business start up loans can be obtained very fast. You get them as soon as you apply for them. This is extremely helpful for new business owners who are mostly dependent on loans for all their business requirements.
These loans can be secured even by individuals having poor credit histories, including arrears, bankruptcy, late or missed payments, insolvency, IVA etc. Small business loans provide an opportunity to the borrowers to improve their credit history.
These loans can also be used for refinancing an already existing business.
Business start up loans can be available in any amount, ranging from a few thousand to more than $100,000. It is advisable for borrowers to make a meticulous research on the market and a detailed comparison between the terms and conditions offered by various lenders to find the most suitable one for your business.
These loans are available for anyone having plans to start a new business.Starting a business involves various details. Here are some of the important purposes a business start up loan can be used:
Purchasing the office space.
Purchasing essential machineries, furniture and other office equipment.
Purchasing necessary electronic equipment like a computer, fax machine, printer etc.
Hiring staff and paying for their salaries.
If you are new in the world of business, it is always advisable to consult an experienced and knowledgeable counselor to discuss your best options for a business start up loan, and the various ways of finding the right lender for you. It is also important to make perfect and flawless business plans before you decide to apply for loans.

Tags:

Corporate Governance and Small Businesses

Let’s start with some review of what types of companies primarily drive the US economy. We know that there are about 16,000 publicly traded companies represented on the NASDAQ, NYSE and the AMEX. The key economic driver in the US is the 27 million small businesses. The Small Business Administration 2008 Presidential Report on The Small Business Economy clearly communicated “the economy generated 1.1 million net new jobs in 2007. In the first quarter of 2007, 74 percent of the net new jobs were in small firms with fewer than 500 employees and 22 percent were in firms with fewer than 20 employees.” Yet, the gross amount of attention in the media and the federal bureaucracy is around what is happening in the Markets. This is understandable with the volumes of dollars transitioning in this public environment. The economic recovery program is not addressing the core of the economy, small businesses. More than ever the public market environment is being questioned about corporate governance. The new legislation being considered for public companies has sections that may very well trickle down and require the small businesses to adhere to similar if not exact rules on Corporate Governance.

A simple definition of Corporate Governance for the small business:

Corporate governance simply refers to the set of internal policies, rules, and procedures that a company follows on a regular basis to ensure that it operates in a fair, equitable, and appropriate manner for the benefit of the company, its management and its shareholders. A corporation usually has a board of directors and a senior “C” level management team. Most small businesses do not have these organizational entities clearly defined and functional. For private companies that are registered as a corporation and have investors, the various states require these entities to have a governing board. Yet many small businesses incorporate for tax issues and do not necessarily pay attention to the concepts of corporate governance.

How does Corporate Governance apply to small businesses?

All businesses should look at their organizational structure and continually assess what will allow the company to perform in an optimal way. The simplest way to implement this is to have an advisory board. The advisory board is non-paid individuals that have business or industry specific backgrounds that can contribute ideas or mentor management. In more formal and traditional cases a small corporation has a board of directors comprised of the founders, a spouse, an employee and maybe – just maybe an outside director. The focal point of corporate governance within small businesses is that all businesses need to set company strategic goals, provide the leadership to put them into effect, supervise the management of the business, and if the company has stockholders, report to the stockholders on their stewardship. For those small businesses that do not have the hierarchical structure in place to implement formal corporate governance plans, it is recommended that regular self assessment of the company will be the starting place for accountability, to enhance performance, grow the company and be a greater contributing force in the economy. At the end of the day, if you follow some set of policies and procedures and are reporting your stewardship of the company to someone even if it is your dog, then you have accountability that is key to corporate governance practices.

Will the government impose its will and definition of Corporate Governance from the public markets into the small business environment?

This imposition of government from the public market companies to privately held companies is making its way through the halls of congress. One idea being tagged onto present legislation is to extend Sarbanes-Oxley down to privately held companies. Anyone that knows anything about SOX is aware of the high cost to implement the documentation processes and the reporting. Pushing this down to the small business environment would be cost prohibitive and stunt economic growth. The general politics of mandated corporate governance is to wait and see how new legislation will affect the small businesses driving the US economy.

As a final note, every company, no matter what size it is, will see the positive effects of implementing the principles of corporate governance. The facts remain that there are 27 million plus small businesses in the US who are the job creators and the drivers of the economy. The greatness of US business is that it performs the best when individuals come together in a free market environment to meet the needs of the economy and society. In the end, best practices of corporate governance can be freely implemented to benefit the company or corporate governance can be instituted by the government, which can cost more in resources, planning and profit. Take the time to assess how your small business views corporate governance and how this will enhance your growth in the market place.

Tom Niewulis, Jr. is passionate about small business. He works with small businesses to develop management teams in implementing organizational strategic vision decisively by using good judgment and initiative to lead and develop organizational teams. As a member of the National Association of Corporate Directors, Tom brings insights to companies regarding leadership, risk management and corporate governance such that they grow in efficiency and market opportunities. He shares the inner workings of business from years of in the trenches experience and presents knowledge with levity.