Penny Auction Sites Info

Some one today asked me about these penny auctions sites that are out there, so just thought would share my information about them.

Now we all know about the popular auction sites, these are where the item is on a set time auction you bid and if your the highest bidder at time of auction end then you win the auction at that price.

The penny auction sites work in a slightly different way, im not going to mention any individual site names, but these basics are mostly the same for all of them. You see a item that is listed the price starts from zero pence, you place bids at just a penny and the price just keeps going up by 1pence at a time, the auctions are normally for just 1 minute, but as a new bid goes on that item it then starts again for 1 minute, so if you have placed a bid and no one else bids in within that minute you win the auction at that price.

Now this seems great, but for you to put on a bid it costs you per bid, for example a site I was looking at, the bid price was 60p per bid, you can also txt in your bid but this works out at £1.50 per bid. I will now give you a few examples, prices below where at time of writing this article.

A macbook air at a rrp of £1149.00, had been bidded up to £108.57, but this means that 10879 bids have been placed, and at 60p per bid that means the auction site has made £6514.20, thats well over £5000 profit on rrp, but someone will have got a good bargain

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Again a iphone 3GS 32gb rrp £549.00 had been bidded up to £33.92, so again with the maths that makes the auction site £2035.20, but again the winning bidder has got a good bargain.

Now as you can see from the above the auction sites do make a great deal of money, but they can loose out sometimes i.e. a canon SLR camera kit with a rrp £1290.00, when for a total of £8.37, so that just made the auction site £502.20, but as you can see from the previous examples they are making enough money off other items, that they can afford to let it go at that price.

You also had to pay a shipping fee and vat needs to be added ontop of the winning figure and shipping combined

So are they a scam, well no not really, as you can win at a very low price with just a little outlay, but you could still keep putting bids in at that nominal amount loads of times and not win anything, so these bids could amount up and you still have nothing to show for it, but on the other hand you may win a expensive item at a very cheap price. but again as you can see these sites are making possibly alot of money, and the person with the highest bid does get a very cheap.So just bear in mind if bidding on a item on these sites that it is costing you each time you put on a bid i.e. if you put on six bids that would be a total of £6.00.

In my opinion these sites are more like a lottery than a auction site. As its the same as playing the lotto, you pay your money and take a chance, and if you win anything that great, but if you dont was only a small outlay for a chance.

Now I know some people will disagree with what I have said, but this is just giving people the information of the way these sites work.

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5 thoughts on “Penny Auction Sites Info

  1. Kevin,

    Thanks for your post and quick explanation of penny auctions. To some extent, winning an auction is luck of the draw. At the same time, there are some strategies that penny auction bidders use that seem to be relatively successful.

    If any of your readers want to learn more about penny auctions, I would encourage them to check out our carefully-filtered penny auction directory:
    http://pennyauctionlist.com/the-penny-auction-directory/

    Thanks.
    Josh

  2. Hi Kevin,

    ** Disclosure I work for YooBeeDoo **

    Read your post with interest. I agree that there is fairly limited scope for strategy on regular penny auctions. When we designed http://www.YooBeeDoo.co.uk we wanted to create an ‘auction’ system that allowed bidders to use more strategy (amongst other important changes) than traditional penny auctions. Our system has some basic similarities to a regular penny auction (eg resetting timer and small fee per bid) but otherwise operates in a completely different way. The best way to understand our central auction model is probably to watch the ‘How it Works’ video on the site.

    You might also be interested in reading our “Better Deal for Bidders” section (link right at the bottom of the homepage) – we’re pretty proud of how we’ve approached the whole project.

    Thanks for your original post, it was a good read.

    David

  3. Hi,
    I have visited your blog and have found it helpful, mostly about the information about penny auction. Penny Auctions are an excellent way to get great bargains and deals if you are willing to put in the effort! Penny auctions are a fairly new auction model that is quickly becoming very popular in the US. Penny auctions permit individuals to do just what it entails, win trendy products at a fraction of the price and for pennies.
    Thanks for the great post, very helpful information here.

  4. Thanks for starting this blog. Anyone who wants to bid on a penny auction just have to do a lot of research on how your opponents play and more importantly, about the company that you will be investing your money on. Those who have mastered the skill of bidding and have developed their own strategy can really get the items at just a fraction of the actual cost. You need to have your own strategy before you bid. Jumping in unprepared will just result in losing more money. While it’s true that a PA company can earn a profit of 50% or even more of the actual cost, it’s not true that PA companies get profit from every single item that they put on auction. A macbook or hdtv could close at less than a dollar. We see lots of budding PAs and they keep on coming. Despite the many complaints that PA companies get, other sites are still existing coz they never run out of bidders/users who have actually won at their site and saved hundreds of dollars. You can’t be a pro bidder overnight. Over time, you’ll be able to develop your own skills and strategy to outbid your opponents. However, penny auction is not for everybody. It takes a lot of patience and skill to win a penny auction.

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