What is a Penny Auction Website and How do they Work?

by Leonie L. Internet Marketing

Penny auction websites sell goods such as electronics, gift cards, hardware, home appliances using a pay per bid model. The winner gets a great deal, the loser some money. There are many of these websites so I suggest to Google "Penny Auction Sites" and do some homework. Many of the websites have "How it Works" videos for you to view and I suggest you do so.

How it works-the penny auction site puts up an item for auction for $0.00. A "countdown" clock starts ticking down. The person placing the last bid wins when the clock reaches zero and you will see a "SOLD." The winner usually greats a fantastic deal.

What's the catch? If you want to place bids you must purchase them first. The bids vary by web site but usually cost around $0.55-$0.90. Quibids offered a "starter" option at $0.60 for 100 bids for example but there are cheaper packages. Other popular sites: zeekler, beezid, bid rivals, bid cactus, happy bid day, and swoopo, but there are many others. When you click the "Bid" button you spend one of your bids. Not only does the price of the auction increase (usually $0.01 but varies) but time is added to the countdown clock which varies by auction websites. You can bid anytime until the timer hits "SOLD" and last one to bid wins. When you win you get to purchase at the closing auction price which is usually quite a savings.
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Your goal is to use as few bids as possible while being the last bidder on that item. You win? You can now purchase that item at the auctions closing price. There is only one winner per item. The bids you used are gone and there is no refund which means you can lose money. The winner however usually gets a good deal.

Let's use a simple example. You are the last one to bid on an item with the final bid total at 86 cents. The revenue generated for that item 86 X $0.60 (bid price) =$51.60. You spent 25 bids to win this item 25 X $0.60 = $15.00 plus the $0.86 final auction item cost. So you can see that the "losers" helps offset the costs. It is a pretty nice model for them but also great for the person who wins the items.

You should also be aware of a "BUT IT NOW" or BIN feature for losing bidders. You get credit for your bids but there is a risk of paying full retail price or inflated prices. You also pay for the shipping. Remember bids cost money and every time you use bid it is gone as well as the money if you do not win the item.

There is a strategy to this like any other auction and it is like gambling to some degree. Give yourself a limit and do not get sucked in. Perhaps start with some "lower ticket" items before going after the big items. If you like the competitive spirit and are reasonable you may enjoy it. IF you do not have a lot to lose then stay away and go to an outlet for the bargain prices.

Happy Shopping!

http://globalsale.zeekler.com/