What are penny auctions?

What are Penny Auctions?

Penny auctions are like normal auctions except for the fact that in penny auctions, you must buy bids first to make you eligible to bid on an auction. Buy bids by purchasing our “Bid Packages” that contain a certain number of bids. All bids cost $0.10 each. To place bids in penny auctions, you MUST have purchased bids before you can place a bid. Each time someone bids, the price of the item goes up only 1 penny. All or most of the penny auctions will have a reserve price, which is how much it must reach before its allowed to sell. If an auction’s timer runs out and the reserve price has not been met, it will relist, and all previous bidders will continue to be listed as current bidders. When a Penny Auction relists due to the reserve price not being met, it will relist for another day, week or month and continue where it left off. The highest bidder wins at the “end of the auction.” The end of the auction is defined as: 1. when the timer runs out or 2. when someone uses the “buy it now” feature. This means, if people are bidding on the auction and let’s say there is 1 week left in the auction, anyone can end the auction instantly by paying the “buy it now” price. When you bid, you will use up your “bids” and will not get them back, even if you win or not. The winning bidder must also pay the final bid price if they win. You must calculate carefully the cost of your bids that you paid, along with the final bid price so that you do not pay too much for an item. If an item has a reserve price for $1.00 and the current bid is $1.00, this means we started the auction at $0.01 and had 99 bidders. If the bid is currently $1.00 then the reserve price has been met and if no one else bids, the person that bid $1 must pay $1 (plus he no longer has any bids that he placed). If he used 10 bids (10x$0.10) then he has invested $1 worth of bids plus $1 for the item = $2 total (plus tax and plus s&h if available). He may be buying a $10 item and only paying $2 total. If someone uses 100 bids then they would have paid 100x$0.10=$10 for bids, plus the final price of $1 so this person would be out $11 so if the item was only valued at $10 then that person would not be in profits. You may still want to buy so you are only out $1 after receiving the $10 item, or you can just be careful in the beginning and know how many bids you have placed so that you get a good deal. You never know the final price so please understand, all bids cost $0.10 each even if you win or lose since each bid is used up after you use it.

In full transparency, this is how our site makes profits and how it is sustainable:
We can list Penny Auction items for way less than the actual value, possibly even pennies. Example, we have a $10 bill auction with a $2 “buy it now” price. We start at $0.01 and when we have reached $2 in bids, we have had 199 bids placed. It is possible that someone could place only 1 bid for $2 for the $10 bill and win. If that happened, the bidder would be out $0.10 for the bid and $2 for the final price which means they only paid $2.10 for a $10 bill. We originally sold those bids for $0.10 each in a bid package, so we have earned $19.90 from 199 bids plus the final price of $2. This gives the site $21.20 minus the $10 bill and $1 to ship it, or about $10.20 profit for our site. We use this profit to pay server costs, website maintenance, plugins and new features, and to buy items to list on our site. We may sacrifice some of our profits to give low reserve prices on penny items. Placing bids may be risky if you do not win, but there is also potential to obtain great items for low prices. Have fun and try to win with the least amount of bids placed as possible for the most profit potential! If you buy a bid package and decide you don’t need/want the bids anymore, we will buy bids back from you if you contact us, but we will only pay 50% of the original cost. Register and visit “My Account” and “Affiliate Area” to get your referral link. If you refer others to this site, you can earn 5% commission when they buy bids or when they buy items! All sales final, no returns or exchanges for auction items. Some items are local pick up only, and some are eligible for shipping. We will sell your items in normal auctions or penny auctions, contact us for details.