Who wouldn’t be attracted to the chance to buy a new Mini at $1358? And how about getting $5,000 cash at the remarkably discounted price tag of $399? A good deal is something that many buyers can’t bear to miss. And the number of users at the many penny auction sites on the Internet is proof that even the mere chance of getting a good deal has the power to draw customers and their dollars. But who really wins at auctions like these? More importantly, who actually stands to lose? Before you embark on a new auctioneering adventure, be sure to read these important facts.
Penny auction sites charge for each bid. Unlike auctions where bidders set their price, this type of auction has a fixed incremental bid. The original penny auctions had bids of one penny, but auction sites featuring bids of 10 or 15 cents are also common. Users sign up and pay for packages which allow them to place a specific number of bids. Sites also allow users to purchase bids in bulk, offering them a much lower price per bid for volume buys. Next to each auction item is a ticker, which tells you when the auction ends. Each new bid adds some time to the ticker.
These days, some penny auction sites set auction deadlines in response to complaints from bidders that the extra time for each new bid means that some auctions can go on indefinitely.
The prices on items for sale at penny auction sites are so ridiculously low that many people think the site owners are running some sort of con. How could a company possibly afford to sell a Sony Vaio laptop worth more than $1,000 laptop for just $234? Actually, the companies offering this type of auction make a great profit. With an opening price of zero, one cent per bid, a selling price of $234 translates to 23,400 bids. If the company is selling bids at 50 cents each, this means a total collection of $11,700, which gives them more than $10, 000 of pure profit. So no matter how crazy the price tag seems, the winner at a penny auction is always the company that is running the auction.
Who else stands to gain from penny auctions? Well, the winner of the auction, of course. Go to any of these sites and review their past auctions and you will find details of amazing deals, such as a Samsung Home Theatre system for $5.88 and a Canon Powershot camera sold at 22 cents ! Winners of these auctions walk away with in-demand consumer products at massively discounted prices, plus shipping charges if any. All the other bidders lose the amount they spent on their bids. While these losses can start out at negligible amounts, they can quickly add up if users start bidding uncontrollably. As with e-bay, these auctions can be addictive and time-consuming. If you have a compulsive personality, participating in penny auction sites might prove to be a costly and frustrating habit.
There are lots of penny auction sites offering free bids to new users. Our free penny auction site shows you where to get these risk-free bids and how to use them to win great deals on the latest laptops, cell-phones and electronics.
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