What Are Penny Auctions?
Recently a friend introduced me to a series of sites claiming to sell valuable items for extremely low prices. Having never heard of Penny Auction and Reverse Auction sites, I was rather skeptical. The idea that anyone is going to sell an Xbox 360, iPod Touch, or PS3 slim, for change is rather farfetched. But after further investigation I have to say their claims were largely true. There are sites, such as Biddor and Swoopo, that will sell you items for pennies on the dollar. There are also sites like BidBlink, which runs reverse auctions, where you can not only win items, but get paid to win them. There are however some catches.
Penny Auctions do have a built in fee. Most auctions charge between 60 cents and one dollar a bid, selling bids in sets of twenty or more. That means for every bid you place you pay a small fee. Each bid increases the price some amount. Sites like Biddor and Bidray increase the amount by one penny. Other sites, like Swoopo, increase by six cent, or twelve cents, depending on the value of the item. On most of these sites there is also a timer, which increases with each bid cast. Generally this time is between ten and thirty seconds. So it is not that they are selling a 720p LCD TV for $5.00 as much as the mass of people bidding, means that the penny auction winner gets a few hundred dollar discount.
The other way these sites are run is “reverse auction” in this case each bid lowers the price. Again you pay a set per bid fee. With a reverse auction, such as the ones at Bidray, your account gets credited whatever amount below zero the item may reach. If the item does not drop below zero, you pay whatever the remaining amount is. In most cases this is still between 10% -25% of the normal price. Other auction sites like Winnit choose a winner based on the lowest unique bid, providing you with hints to help you guess the right amount winning you the item at that price.
All of these sites provide an auction style rush, and give the participants a chance to win items for much lower than you would pay in any store. Sites advertise winners who have won brand new Wii, PS3, and Xbox games for less than $3.00, or LCD TV’s for less than fifty bucks. While for most of these sites this is true, there are things to be wary of.
Now your limit: Getting caught up in the auction can cause you to end up bidding more than you planned. Knowing how much you plan to spend ahead of time is a good system.
Reputable Sites: Bid sites like Swoopo, Biddor, Bidray, and Winnit are run by reputable businesses offering a fun and exciting entertainment shopping experience.
The last thing is to know what the site offers. Some sites offer Bid Butlers, which will allow you to set up automatic ranges your computer should bid for you in. This lets you stay competitive and in the auction, while not exceeding a certain price range. Also know if the site covers shipping. Winning a 37″ LCD TV is nice, but paying $40 in shipping makes it a little less exciting (though still a good deal).
