Every day, it seems there is a cool new way to buy stuff on the Internet. One of the latest and most fun methods is called a Penny auction. It’s becoming hugely popular and for good reason.
What Is A Penny Auction?
Penny auctions combine pure entertainment with intense bargain hunting. But, it’s not bargain hunting in the sense of spending hours rummaging through a thrift store. Rather, penny auctions provide online shoppers the opportunity to buy brand new, must-have items like plasma HD TV’s, Apple iPads, and top-of-the-line digital cameras for literally pennies on the dollar.
So, how do they do it? The first thing to note is that these sites are 100 percent legitimate. The merchandise is all authentic, brand new, and unopened in its original packaging.
The key to their ability to sell for so cheap is that these sites charge a small fee for each bid placed. The amount of the fee is small, so it’s inconsequential to the bidder relative to the value of the item, but because of the number of auctions they hold and the number of bids they receive, the sites are able to cover the difference between the cost of the items and the winning bid price.
It’s not uncommon to see items selling for less than 10 percent of their retail price.
How Penny Auctions Work
The different sites vary in how they set up the auction, but here are the basics. For each item, they display the item description, the value, the current bid amount, and the username of the current high bidder.
Each bid raises the price by a penny, and when the time remaining is fewer than 20 seconds, it extends the auction time by a few seconds. This allows interested participants to counter the high bid. The challenge here is that you can get caught up in the action, which extends the auction time, and end up spending more than you think you’re going to spend when you started bidding.
Like with gambling, it’s fun to watch the action and even more fun to participate. By observing just a few auctions, you quickly gain the skill and develop an understanding of which auctions to participate in, and when you should bid. The site’s FAQs also give valuable tips that can help you win auctions at prices that translate into massive savings.
Smart Penny Auction Tips
- Set a spending limit so you don’t get caught up in the action and end up paying more for an item than what you want.
- Visit during non-prime hours when there’s less competition.
- Lost a bid? Check future auctions. These sites get product in bulk so if you lose on this first iPad, chances are another one is going in an hour or less.