How do Penny Auctions Work?

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How do Penny Auctions Work?

With your traditional auction site like eBay bidding is free and you only pay if you win the auction. With penny auctions you have to buy your bids in advance and they cost you in the ballpark of around $0.60. So let’s say you place 2 bids and you lose then you will have lost those two bids. The kicker is that each bid only raises the auction price by $0.01. This is how penny auctions can afford to let items that retail at $2,000 sell for only $35.00. If each bid only raised the price by one penny then that means 3500 bids were placed on that auction before it finally ended. If each of those 3500 bids cost $0.60 then the penny auction actually made $2,100 minus their cost of the item leaving them with a 100 dollar profit on the auction. What is really great about all of this is that there is no minimal amount of bids needed to win so you can very well win an auction with only 1 bid as long as you are the last person to place a bid.
If you’re completely new to penny auctions and your thinking to yourself "Ok I can just wait until the last second and snipe out a win like I do on eBay." Your Wrong penny auction timers are also very different from your traditional online auctions. With penny auction the timer is set in intervals. The Quibids intervals start out at 20 seconds, what that means is if the timer is at 5 sec left and someone places a bid the timer will reset to 20 seconds. This gives everyone a fair advantage to jump into the auction. Some sites keep their intervals at the same length for the entire auction. Lucky for you Quibids is ahead of the game and lets the intervals get shorter as the auction goes on. The way it is set up is the intervals will start at 20 seconds but when the price reaches let’s say $1.00 the intervals shorten to 15 seconds and then finally down to 10 seconds. You can think of the intervals as adding a more realistic approach to auctions with a kind of going once going twice sold type of effect.

Common Questions about Penny Auctions

If I lose do I have to still pay the final ending cost?

No if you lose you are only out the bids you paid for.

Do you pay for your bids before or after the auction?

You have to buy your bids before the auction.

Are the items new or used?

While I can’t speak for every penny auction site. Quibids provides brand new products. Because Quibids rarely keeps any items in stock when you win the item is actually shipped from a store like Amazon.com, sometimes the items come from the company that makes them!! Quibids also clearly states that all products are new. So if there was ever an issue they would have to make it right.

Should I use a penny auction site with cheaper bid cost?

I have found that the lower the bid cost the higher the final price and the more bids you will need in order to win. Where as with the higher end being between 60 cents and a dollar the final ending price is lower as well as the competition levels being lower.