A friend recently introduced me to a number of sites that claim to sell valuable items at extremely low prices. Having never heard of Penny Auction and Reverse Auction, he was quite skeptical. The idea that someone is going to sell an Xbox 360, an iPod Touch or a PS3 slim in exchange is pretty crazy. But after further investigation, I have to say that his claims were largely true. There are sites, like Biddor and Swoopo, that will sell you items for pennies on the dollar. There are also sites like BidBlink, which run reverse auctions, where you can not only win items, but also get paid to win them. However, there are some pitfalls.
Penny auctions have a built-in fee. Most auctions charge between 60 cents and a dollar per bid, selling bids in sets of twenty or more. That means for every offer you make, you pay a small fee. Each offer increases the price by a certain amount. Sites like Biddor and Bidray increase the amount by a penny. Other sites, like Swoopo, increase by six cents or twelve cents, depending on the value of the item. On most of these sites there is also a timer, which increases with each offer launch. Generally this time is between ten and thirty seconds. So it’s not that they’re selling a 720p LCD TV for $5.00, but rather the sheer number of people bidding means the penny auction winner gets a few hundred dollars off.
The other way these sites are run is the “reverse auction”, in this case, each bid reduces the price. Once again, you pay a fixed fee per offer. With a reverse auction, such as those at Bidray, your account is credited for the amount below zero that the item can fetch. If the item doesn’t drop below zero, you pay the remaining amount. In most cases, this is still between 10% and 25% of the normal price. Other auction sites like Winnit pick a winner based on the lowest single bid and give you hints to help you guess the correct amount to win the item at that price.
All of these sites are auction style and give participants the chance to win items for much less than they would pay at any store. The sites announce winners who have won new Wii, PS3 and Xbox games for less than $3.00, or LCD TVs for less than fifty dollars. While this is true for most of these sites, there are things to be careful of.
Now your limit: Getting caught up in the auction may cause you to end up bidding more than you planned. Knowing how much you plan to spend ahead of time is a good system.
Reputable Sites – Deal sites like Swoopo, Biddor, Bidray, and Winnit are run by reputable companies that offer a fun and exciting entertainment shopping experience.
The last thing is to know what the site offers. Some sites offer Bid Butlers, which will allow you to set up automatic ranges at which your computer should bid for you. This allows you to stay competitive and in the auction, without exceeding a certain price range. Also find out if the site covers shipping. Winning a 37″ LCD TV is nice, but paying $40 shipping makes it a little less exciting (still a great deal though).
