Penny Auction Review

If you're looking to buy a Apple iPad, you'd probably think it would cost you more than $1.22. And it would...unless you knew where to shop.

What would you say if you were told you could buy a Panasonic 37” LCD television for $5.13? You'd probably think it was stolen.

These prices are not that unusual if you know about penny auctions. Penny auction Websites are the latest form of shopping and entertainment to pop up on the Internet, and they provide both the fast-paced action of bidding in an auction and the ability to buy name brand merchandise at unheard-of prices.

Penny auctions are different

Penny auction sites work a bit differently from most auction sites on the Web in that members are not the sellers of the merchandise. The merchandise is offered for sale by the Website itself and members are bidders. Another major difference between penny auction sites and other sites is that with penny auctions, you have to pay to bid.

The last significant difference between penny auction site and others is that the auction never ends at a specified time. The auction ends when people stop bidding. This means that those nasty last-second snipers that pop in on eBay to ruin your day have no advantage here. If someone places a bid in the last couple of seconds of an auction, the auction is extended for a few more seconds. It only ends when the bids stop, so the highest bidder always wins.

Bids are sold in packages, or lots, of bids; you can buy anywhere from 100 bids to 1000 bids at a time. Bid prices vary from site to site, and cost anywhere from fifty cents to a dollar per bid.

Most penny auction sites even auction of packages of bids, so you can often save money on the cost of the bids themselves!

You can place your bid manually or can use an automated proxy bid system to place your bid for you. You simply tell the system how many bids you wish to place and the rest takes place automatically. Starting bids are often as low as one cent, offering tremendous potential for snagging a bargain if you catch other bidders not paying attention.

The merchandise offered for sale is always new and varies widely from site to site. Merchandise may include game consoles, such as the Playstation 3 or Nintendo Wii, Apple iPads and iPhones, Amazon gift cards, computer monitors, flat screen televisions and more.

Some penny auction caveats

While these auction sites can be fun and are loaded with bargains galore, there are some downsides. Since all bidders pay for their bids, even people who lose an auction end up paying money. If you are careless, you could end up spending a lot of money on bids for an item you ultimately do not win. Some sites compensate for this by permitting losing bidders to buy the item at the suggested retail price with the value of their losing bids deducted from the cost of the item. This means that no one need walk away empty handed.

Due to the unusual business model of penny auction sites, it remains to be seen if they will ultimately become as popular as eBay. The lure of a bargain is always a strong one, however. As long as people think they can buy that iPad for $1.22, they will continue to bid.