Shopping Product Reviews

What are penny auctions?

Recently, a friend introduced me to a number of sites that claim to sell valuable items at extremely low prices. Having never heard of Penny Auction and Reverse Auction, he was pretty skeptical. The idea that someone is going to sell an Xbox 360, an iPod Touch or a PS3 slim in return is pretty far fetched. But after further investigation, I must say that his claims were largely true. There are sites, like Biddor and Swoopo, that will sell you items for pennies on the dollar. There are also sites like BidBlink, which run reverse auctions, where you can not only win items, but also get paid to win them. However, there are some pitfalls.

Penny auctions have a built-in fee. Most auctions charge between 60 cents and a dollar per bid, selling bids in sets of twenty or more. That means that for every offer you make, you pay a small fee. Each offer increases the price by a certain amount. Sites like Biddor and Bidray increase the amount by a penny. Other sites, like Swoopo, increase by six cents or twelve cents, depending on the value of the item. On most of these sites there is also a timer, which increases with each offer release. Generally this time is between ten and thirty seconds. So it’s not that they sell a 720p LCD TV for $5.00, but the sheer number of people bidding means the winner of the penny auction gets a few hundred dollars off.

The other way these sites are run is the “reverse auction”, in this case, each bid reduces the price. Once again, you pay a flat fee per offer. With a reverse auction, like Bidray’s, your account is credited for whatever sub-zero amount the item is likely to fetch. If the item doesn’t drop below zero, you pay the remaining amount. In most cases, this is still between 10% and 25% of the normal price. Other auction sites like Winnit pick a winner based on the lowest single bid and give you suggestions to help you guess the right amount to win the item at that price.

All of these sites are auction style and give participants the opportunity to win items for much less than what they would pay at any store. Sites advertise winners who have won new Wii, PS3 and Xbox games for less than $3.00, or LCD TVs for less than fifty dollars. While for most of these sites this is true, there are things to watch out for.

Now your limit: getting caught up in the auction can cause you to end up bidding more than you had planned. Knowing how much you plan to spend ahead of time is a good system.

Reputable Sites – Deals sites like Swoopo, Biddor, Bidray, and Winnit are run by reputable companies that offer a fun and exciting entertainment shopping experience.

The last thing is to know what the site offers. Some sites offer Bid Butlers, which will allow you to set up automatic ranges that your computer should bid on for you. This allows you to stay competitive and in the auction, without exceeding a certain price range. Also find out if the site covers shipping. Winning a 37-inch LCD TV is nice, but paying $40 shipping makes it a little less exciting (although it’s still a good deal).

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