Have you heard about the newest auction sites that are sweeping the internet? They are called penny auctions and they are making a lot of money. A consumer may at first see the ads and wonder if they really do give away their products for pennies on the dollar as they advertise. In a way, they do and in another way they don’t. Let’s just say this. The site is making lot money. However, the consumer can waste a lot of money and come away with no winning merchandise.
Do you like to gamble? Then be even extra careful of the penny auction sites. They can become addicting.
Now your next question may be this. Can I really win an Ipad for $20 on these sites? You can and you can’t.
Here is a basic run down on how most of these sites work.
Step one:
The consumer registers and then must pay for credits or points. On most sites these credits are used to place bets on items they want to bid. If you win an item, you may still have to pay for the final bid price. This will depend on the site.
If you don’t purchase any credits you can’t bid.
Step two:
Once you have your bids at hand, you can begin bidding on anything you like, just like you would at Ebay. The catch is these bids do not have a real end time, like Ebay. If the end time says 2 minutes it can actually mean 2, 4, or 6 hours. During the last bidding seconds of the clock, the clock will reset itself for so many seconds (generally 12 to 15 seconds) to allow another bidder the chance to bid. If another bidder decides to bid, the clock will again reset itself and on and on the bidding and the resetting goes.
Why?
For each bid that is placed, a user has to give up a credit. A credit usually costs about seventy-five cents each. If you begin calculating how many credits one user may use to try to win an item, you may find that the person has spent over a hundred dollars on trying to win that item. However, he/she probably hasn’t been the only one bidding. Generally, there are 20 to 30 bidders, depending on the popularity of the prize. This can be mean a lot of wasted bids and a lot of wasted money has been spent because by the end, of the bidding and only one person will have won the prize, the others will finally give up or run out of credits.
Step three:
The winner of the prize must pay for whatever the prize has ended up to costing in real money. This is usually a small amount. Sometimes, this fee can and will come out of their credits. Other times, the winner will have to give out their credit card information.
Step four:
The winner of the prize will be sent their prize.
Some of the down-sides to these auctions are:
• Nobody can win every auction
• They become addicting and you may find yourself buying more credits
• Your finger can become finger happy during the auction process, thus you find yourself giving away your credits and your money quickly
• People forget to calculate the number of credits it costs to win an item and the prize of the credits
• The site makes money from each auction
• Many consumers walk away from the site after wasting hours of time and lots of money.
Yes, the truth is you can win at these penny auction sites. Yes, you may actually walk away paying less for an electronic item than you would if you paid for it via a store, even when calculating all the credit costs. Yet, you may find yourself playing the auction irresponsibility and you might find yourself wasting money way too easily. For this reason, for most people, it may be best just to steer clear from these sites and stick with the traditional auction sites such as Ebay.
Sources:
Experience
