By now you must have heard about the latest online craze known as Penny Auctions that enables everyday people to buy top brand products at prices way below retail. These switched on buyers are involved in a new way of shopping called Penny Auctions, where bidders strategize and outwit each other to get unbelievable deals and save hundreds or even thousands of dollars off the normal retail price of top label items.
So how do Penny Auctions work?
A prospective bidder signs up fpr a free account and purchases bids to use in the auctions. The cost to buy bids differs on each Penny Auction site, and is also different for each country. For example, in the US, a bid on a particular Penny Auction site might cost 60 cents, whereas visitors from New Zealand may pay 90 cents per bid. This is due to currency exchange rates. In the end, all visitors pay about the same amount for each bid. For the purpose of simplicity, all figures used here will be in US dollars.
How much does it cost?
Penny Auctions are different from standard auctions in that you do not necessarily bid what you think a particular item is worth. There are several auction formats, but the general idea is to try to bid as late as you can in order to be the top bidder when the countdown timer runs out. The winning bidder then buys the product for the Final Price of the auction, which is often hundreds of dollars below the retail price. Now and then the winning bidder can win a product simply by placing the last bid, and have nothing else to pay to get the product, not even shipping!
Auctions start at $0.00, and each bid bumps up the final price by 1 cent. So an auction that receives 50 bids will have a final price of 50 cents.
Auctions have a countdown timer, usually set to start at 10 or 20 seconds, depending on the Penny Auction site involved. The timer is bumped up by 10 or 20 seconds respectively each time a bid is placed. So that on an auction that begins with 10 seconds on the clock, if that timer has run down to 4 seconds and a bid is placed, the timer will be bumped back up to 14 seconds, and the countdown will resume from there.
The auction ends when the timer reaches zero seconds and no more bids are placed.
What happens at the end of a Penny Auction?
If you are the leading bidder at the end of a Penny Auction, you generally have two options.
1. Go ahead and pay the Final Price of the item, as determined by the auction, at which point the product you bought will be shipped direct to you. In some cases, you do not need to pay anything, and your item will be shipped to you automatically;
2. OR, you can swap the item for more bids, and then bid for another item.
Who is eligible to participate in Penny Auctions?
The specific terms and conditions of each Penny Auction site vary, but generally speaking the criteria on each site are pretty much the same.
Here are some general guidelines.
You need to be 18 years old or older and able to legally enter a contract. This is a standard rule for any online auction site. What this means is that if you are 17 years old you may not join, but once you turn 18, you may.
Only people living in approved countries may bid. Most Penny Auction websites are only viewable in the counties where participation is allowed, i.e. The USA, Europe, Australia and New Zealand plus others. For various reasons, some countries are currently excluded from most Penny Auction sites.
Each Penny Auction site has their own rules for bidding, so make sure you read them prior to signing up.
How to Keep Safe When Using Penny Auction Sites.
As with any type of internet shopping, it is important to protect yourself when signing up to Penny Auction sites. Only join sites that specifically guarantee that they do not use any automated bidders to manipulate auctions, and also those that do not allow their own employees and their families from bidding in auctions. It is very important to protect yourself against scams. Sticking to the larger sites is the best way to do that.
So, next time you are thinking of buying some famous brand products on the internet but are sick of eBay, consider the benefits of using Penny Auction sites, and have some fun while you save hundreds of dollars on great products.
Guest Blogger: Michael Nunn is a former eBay user who now believes in the power of Penny Auctions. For more information on Penny Auctions, visit 2bit.co - The Source of Everything