Are You Interested In Buying Products For Up To 90% Off Retail? Penny Auctions have been around for many years, but many people aren’t aware of penny auctions or have any idea how they actually work. This lack of knowledge probably keeps many people from even checking them out. Maybe you’ve heard about the amazing prices people are paying for in demand items like iPhones, Laptops and even gold, and you’re thinking it’s too good to be true so why bother? If you’re one of those people, then I have good news for you. It is true. People are winning amazing items at up to 90% off retail. So how can this be? Well, that’s why I decided to write this article. I want to help educate people on what a penny auction is, how they work, and how the penny auction sites actually make their money.
Understanding The Penny Auction Process
If you’ve ever been to an auction like eBay, you know that you bid against other bidders against the clock that is ticking toward 0:00. Once the clock runs out of time, the highest bidder is the winner.
Penny auctions also have a time element but they work quite differently.
For purposes of illustration, lets say you go a penny Auction and we see a watch that retails for $1000.00 and you decide you want to take a shot at winning it.
Many Auctions start with the clock around 2 hours and count down from that point. Some individuals will bid immediately, while some will wait for the time to wind down. When the clock hits the designated time, for instance around 20 seconds (this varies with each auction) this is really when the action starts. If the clock goes to 0:00, the highest bidder will win when the auction at that time if no one bids before the 20 second clock runs out. (That’s really rare). However, if someone else bids, the clock then resets to 20 seconds and counts down until someone else bids and the clock restarts back at 20 seconds.
Every time someone hits their “Bid” button, the bid only increases by one penny. This is important and worth repeating: each time somebody bids, the bid is only raised by one penny. So if you have a $1000.00 watch, the bidding starts and $0.00 and climbs up by one penny with each bid.
So How Do I Win?
The auction ends once the 20 second clock expires and no one else bids. At that point the highest bidder is the declared the winner. More often than not, the winner walks away with an extraordinary deal.
So using the watch example, let’s say that the winning bid was $70.30. The exact cost to the winner would be $70.30 plus shipping as well as the cost of however many bids they utilized to win. So let’s the winner used 100 bids to win (at $1.00 per bid), therefore the entire cost of the watch to the winner in this particular example will be $170.30 plus shipping. If it costs $30.00 for shipping the winner would have received a brand new $1000.00 watch for a total cost of $200.30!
What Are Bids?
To participate in any penny auction, you must have a stockpile of “Bids”. Bids are like currency in a penny auction, and must be purchased (although there are ways to get free bids) at the Penny Auction site where you are bidding. The price for bids varies from auction to auction, but to make the math easy in our example let’s say we purchased them for $1.00 each.
So if you decide to go after an item that is really in demand, you would need to buy enough bids to make sure you can stay in the game. There are many strategies that experienced penny auction bidders use to win. We won’t go over those here. However, one real good rule of thumb is to go after items you would pay retail for anyway, and have enough bids to make it happen.Auctioneers in Kansas
The good news is that many auctions have a “Buy Now” feature, and they will credit the bids you spend toward the purchase of the item at retail, so the bidder does not lose what they spent on the bids.
For example, if you went after the watch in our example, spent 200 bids and didn’t get it, you could still purchase it for the retail price minus the 200 bids you spent. If you started bidding knowing that you were willing to pay retail for the watch anyway, then you still acquire the watch with no loss and probably had some fun doing it.
If Winners Get Such Great Deals, How Do The Auctions Make Money?
That’s a great question, and believe it or not, penny auctions that are managed well are very profitable.
Using the watch example above, we assumed that each bid costs $1.00. That means that every time someone bids (raising the bid by 1 cent), they spent $1.00. So in our watch example, the winning bid was $70.30. Doing the math, we know that there are 7030 pennies (and each penny represents a bid) in $70.30. If each bid spent cost $1.00, the auction company took in $7030.00 for an item that retails for $1000.00. Of course, they probably didn’t pay retail for the watch. What’s more, they also collected the winning bid amount of $70.30 from the winner. Therefore, the company won with a large profit, and the winning bidder walked away with a huge discount on a very nice item.
“Entertainment Shopping” That Everyone Can Enjoy
Penny Auctions are a blast and many of the auctions these days offer different enticements to get you to try theirs. While bidding for cool items is fun as well as entertaining, I recommend you have a plan just before you start bidding, especially for the more popular items. One really good approach is to only bid on items that you’d be willing to pay retail for and do it with a sufficient quantity of bids.
If you’re a competitive person and have the right approach and a good strategy going in, you’ll really enjoy the penny auction process.
Would You Like To Try Out A Penny Auction For Free?
There are a lot of fun and exciting Penny Auctions out there. One of the newest sites is the Bidsson Penny Auction. Currently, they are auctioning off some great items, like lap tops, Tablets, lots of Apple products and some very cool toys. Because they are a fairly new site (They came online in June of 2012) the competition is not as intense as other sites.