If you have been looking for some new ways to save money, then you might have considered using penny auctions. Penny auctions are an incredibly unique format in comparison to what the majority of people are used to. For instance, on a normal auction, bidders increase the price rapidly and items can quickly jump into the hundreds. With penny auctions each time a bidder places a bid, the price of the auction will only increase by a penny. This is a fairly unique concept and the reason why many people are sceptical about it is because they don't truly understand exactly how it all works.
So how do they actually make money?
Most people are confused about the concept behind penny auction sites. The reality is that the auction websites do not make money by selling items; the sale price is usually irrelevant to them and makes up a small part of their revenue. Instead, they actually make their money by selling what are known as bid credits. For every bid credit that a person buys they are able to bid on an auction. Bidders can choose to bid as little or as much as they want on auctions. They could bid just once on an auction, or they could bid 10 times.
What does it cost for bids?
The bid cost will have been set prior to the auction by the company that is hosting the auction. Generally, the site will have a specific percentage that they choose for each auction. For instance, one site might choose to set the bid cost at 0.25% of the RRP value of the product. Another site might choose to put the bid cost at 1% of the RRP value of the product. The thing you really want to do is find a site that is consistent when it comes to the bid cost. Buying these items will be much more simple if you have a budget and you will also be more likely to win.
What products are featured on these auction sites?
Different websites will choose to host auctions for different websites. For instance, one auction website might choose to go for mainly electrical items. So, their item range might consist of things like TV sets, DVD players and even mobile phones. Other sites might include sporting goods or even training courses; the possibilities are endless.
What discounts should be expected?
The discounts of the RRP purchase price are generally pretty huge. It's not uncommon for items to end for around 90% below the normal retail price on penny auctions. The problem is that a lot of people don't factor in the fact that they are actually going to have to pay for the bids. Even though bid costs are fairly small, they can all add up to a significant amount. For those people that don't factor in these costs, they could find that after paying for the costs, they are not actually saving much money at all. It is all about preparation.
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Want to know more about penny auctions? BidGrid run a kind of penny auction site and make it perfectly clear in 4 simple, they also have a simple video tutorial. Registration is free and they also have free practice auctions where you can win site credits https://www.bidgrid.co.uk/en/how_it_works.html
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