Before deciding on your prize recall just why are you running the competition?
To attract a lot of interest, offer a prize that will appeal to a wide audience, like cash or vouchers. A more specialist prize should help your targetting. For example, if you run an Anime website then offering Anime DVDs is ideal, beauty products won't appeal to too many guys, whilst localised prizes can help narrow your audience further.
1. Getting Prizes From Sponsors
Many companies are prepared to offer promotional goods as prizes - you run the competition, they provide the prize in exchange for promotion on your website. Similarly, if you're involved in affiliate marketing, some merchants will happily donate prizes in return for added promotion!
There are also some PR agencies who handle competition prizes, e.g. DVD releases and movie goody bags. The main thing is don't be afraid to contact people and ask!
2. Supply Your Own Prizes
Alternatively you could get some promotional items made up -
for example mugs, mousemats, pens, keyrings, or t-shirts with your logo and
url can provide you with advertising after they've been won! These can be quite good prizes for loyal users of your site.
Finally, you could simply buy the prize yourself - one of our most successful competitions was for boxes of chocolates from Hotel Chocolat! By buying online you don't even have to worry about sending the prize yourself.
3. Vouchers & Discounts
Some sites believe giving money off vouchers or discounts is a prize - for example £100 off a holiday, buy one get one free style offers, or 10% off selected CDs. In our opinion these really aren't prizes. A prize is something the winner should receive for free, i.e. they shouldn't have to part with any money to enjoy their success. If you want to offer discounts, then offer them to all users don't make your site look second rate by fobbing such giveaways off as competition prizes.