Most people are on the lookout for ways to cut costs but still enjoy the lifestyle they desire. The traditional haunts for high-quality products without their hefty price tags are store sales and factory outlets. The Internet also offers great savings, for example, on trading sites where used items are bought and sold, and auction sites like E-bay, where consumers can save on anything from baby clothes to lawnmowers. The recent crop of penny auction sites have registered on bargain hunters’ radars. Sites like these offer up to 95% off the ticket price of brand new electronics, designer apparel, cars, gift cards and cash, but can they really help your bottom-line?
The important thing to note about penny auctions is that you pay to play. If you are an E-bay regular, you are probably familiar with the ins-and-outs of free bidding. With penny auctions, however, each bid costs money. Membership on these sites is usually free, but you can’t bid unless you buy a bid package. Bids increase the selling price of an item by minimal amounts, from 1 to 10 cents. However, bidders pay a higher price per bid, often between 50 and 80 cents. The more bids in the package, the lower the cost per bid. Auction sites still turn a profit when they sell, say, an LG Blue-ray player for $5.10 because they gain from selling bids, rather than from selling the items.
Other than that, penny auctions are similar to other types of auctions. Each auction item features a timer, displaying how much time is left. Each new bid extends the auction time and when the timer hits zero, the last bidder can purchase the item at the final price. Some amazing deals have been won this way, for example, gold bars worth thousands of dollars sold at less than ten percent of their value. It’s hard to say no to prices like these, but penny auctions really only benefit two parties: the auction sites and the winning bidder. Everyone else loses, that includes hundreds of bidders just like you.
In other words, if you have very limited funds, penny auctions are not reliable way to save money. Since you are bound to lose some auctions before you actually win, unless you are extremely lucky or skilled at auctioning, you must be prepared to spend some money before you win. Also, sites like Swoopo and Pricebenders tend to feature items such as designer bags, store gift cards and pricey electronics, which tend to be ‘wants’ rather than the ‘needs’. If you have a history of getting caught up in auctions or social-gaming sites, you should also steer clear of sites like these since they can spark compulsive behavior. On the other hand, penny auctions are worth a look if you are looking for a little fun with a chance at the buy of a lifetime. Staying realistic about your chances and bidding sensibly makes for a harmless bit of fun, with the possibility of a pot of gold at the end of the auction.
Do you want to avoid the mistakes that stop beginners from scoring big on Penny Auctions? Visit this penny auction site for advice from multiple winners, listings of the best sites, tested strategies and more!
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