If you are an internet user that regularly uses the internet to shop, then it is likely that you have come across something called penny auctions. At first, they might come across as fairly suspect. What they claim to offer is the chance for you to get a top quality product for a tiny percentage of the original retail price. Imagine going into a high street retailer and getting this kind of deal, it simply is never going to happen. You need to decide whether penny auctions actually represent a great opportunity for you to save yourself lots of money.
How do the sites make money?
In order for you to determine whether or not these sites are scams, you first need to understand how they work. For most people, they simply do not understand how they can make any money when they are selling items at these unusually prices. The reality is that they are not selling items, they are selling bid credits. The profit they make is from the bid credits that they sell to bidders, which are needed in order to participate in the auctions.
The bid cost will often vary depending on the value of the item, which means that the penny auction site will normally need to sell a fairly large number of bids in order to break even. Sometimes, they are going to get more bids than this, which means that they are going to generate a profit. Obviously, they also get the value of the purchase price, although this is always going to be fairly minimal, so is almost insignificant.
What is the process?
The process for the bidders is fairly simple. Penny auction platforms are typically free to register to. All you need to do is sign up to your favourite website and log things such as your name, email address and your registered home address. You can choose to purchase bid credits straight away, or you can hang around and do a little research first. You can place as many bids as you like on an auction. Generally, you will not be able to do a last minute bid to win an auction. This will usually extend the auction by a set amount of time, which means other bidders will then have the chance to get into a bidding war with you.
Will you need a strategy?
Each person has a strategy, even if they do not realise that they do. The successful bidders with the successful strategies are the ones that have more experience. Over time, you will get to know what really works and what really does not. This will mean that you start to win more and more auctions, for less and less money. Of course, this is the ultimate aim for every bidder. Every bid credit that you use is going to cost you money and if it costs you money, then this will eat into the savings that you would could make. Most people do research by looking at old auctions and trying to find patterns. These patterns can help them to decide which is the best way forward when it comes to bidding to win.
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Penny auctions come in a variety of shapes and sizes so make sure you have a good look around before signing up and purchasing your first bid pack https://www.bidgrid.co.uk/en/how_it_works.html
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