Saturday, December 11, 2010

Can You Trust Penny Auction Sites?

It is a rare money-making venture on the internet that does not have plenty of articles about it with "scam" in the title. Even the most above-board direct sales company having impeccable management credentials is likely to have at least one Google listing for a "review" written by a disgruntled former distributor that trashes the company, products, management, etc.  Still other articles are written about how anyone who ever supported (insert company name here) at any time is a scammer. The person who lost money never considers the possibility that he or she did not have what it takes to run a home business, even part time.

While it is true that some are sincerely concerned about how easily people can be scammed on the internet (remind me to tell you about some of my own experiences!), still others use negative reviews to drive traffic to an article that prominently features a link at the bottom to their latest deal, urging visitors to "Check out a company where you can REALLY make some money!"

Puhleeze. How much more, then, are penny auctions going to raise the scam radar of those watchdogs who live and breathe to tell you how you ought to spend your money? Their warnings are not just paranoia.

Penny auctions, like penny stocks, are HIGHLY SPECULATIVE.

Let me repeat. HIGHLY SPECULATIVE.  Even though auctions start at a penny, if you don't know what you are doing, you can find yourself locked in an autobid with someone having deep pockets, and spend way more on an item than you intended to.

So what, you may ask? If I planned to bid on a Nikon Camera up to $100, and I end up getting it for $145 instead of $450, why does it matter about a lousy $45?

Because penny auctions, like penny stocks, are HIGHLY ADDICTIVE.

Let me repeat. HIGHLY ADDICTIVE.

Particularly if you start winning.

Have you ever turned 50000 shares of at a penny into $2,500, or $5,000, or more? Then you know what I am talking about. The same kind of thing can happen with penny auctions. They produce the same kind of rush as horse racing, or high-stakes casino gambling. Worse still, since you are paying online, it is a little like Monopoly money. You may reason away an extra $2 on an inexpensive item. (What if I lose the item for the want of just $2??)  You may reason away an extra $10 on an expensive item that you are paying online with a credit card, but those $10 overages quickly add up to an extra $100, or $200 or $500 if you are not careful.

Would you tear up five $20 bills and flush them down the toilet?

Of course not. So why is it so easy to whip out a credit card and pay $100 for something you really don't need and are not going to actually turn around and sell on eBay for full price?

I know this isn't the information you thought you were going to get in this article, but I wanted you to have a chance to think about whether you have the temperament to bid sensibly on a penny auction before I start talking about penny auctions in earnest.

If you have the discipline to play them right, penny auctions can be a lot of fun, and a way to pick up great products at a fraction of their actual cost.

If you have what it takes, watch this space Monday for a new series about penny auctions!


  1. Really good well-balanced article. I thought initially you were another penny auction basher and that they are just gambling, but you have some wise information and end with the fact that if someone does play them right they can get great products at a fraction of the price. All of us at have tried to take bid auctions (penny included) to the next level by placing them on a marketplace to make them truly fair, as we bring independent buys and sellers together. Hopefully this will help move them from simply site listed products to a proper bid auction marketplace.

  2. Thanks for the kind words. I love penny auctions, but they are not for those with gambling habits who cannot control themselves. I will be talking about some of the different penny auction sites in this series and will be delighted to feature Exceet in one of them.