Penny Auction sites are growing in popularity as more and more consumers are making massive saving on everything from cameras to new cars. But what are Penny Auction sites and how do they work? Read on to find out and start saving…
How do Penny Auction sites work?
Most people are familiar with auction sites such as eBay but Penny Auction sites work a little differently in that you do not just place bids on items, rather you buy a bid package and then use your bids to try an win the item you’re after.
The first thing you’ll have to do is register with the site, which is usually free, but before you make a bid you will have to buy a bid package or credits. You then use these credits to make a bid, each bid will use one or more credits, depending upon the item, and will raise the price of the item by one penny, hence ‘penny auction’.
You then need to keep an eye on the timer, if someone else places a bid then the timer is reset, if not and it counts down to zero then you are the winning bidder and the item is yours.
Selling on Penny Auction sites
As with other auction sites you can sell items on Penny Auction sites and this is usually free to do.
So if you have any unwanted items that you want to get rid of then you can post them on a Penny Auction site and see how you get on. However, if people are getting items at a lot less than market value, how are you going to make any money?
How it works is that you will get a percentage of the final bid, so if you sell an item for £1.00 then you may get half of that amount, nothing to write home about! However, if there were 100 bids at 50p each then you will get a certain amount from each bid that is made.
So, if you get 25p from each bid, that equates to £25.00 plus the 50p you made from the sale price, which sounds much better!
Although it sounds quite complicated it’s actually an easy system when you get used to it and can actually make you more money than a normal auction site, particularly given the amount sites like eBay charge in listing fees and sellers fees!
Have you ever grabbed a real steal on a penny auction site, paying far less than market value for an item? Or have you ever made a killing on an item that you didn’t want and sold on a penny auction site? If so, let us know…
Rob is a personal finance blogger & owner of www.click4personalfinance.com, a personal finance blog which hopes to provides insight into the crazy world that is money.