Are Penny Auctions Legitimate?
You may have heard of the penny auction sites
, in fact, if you are reading this article, we are certain that you have. They are one of the latest crazes taking the internet by storm. People play for the lure of premium products at knock-down prices, the excitement and the sociability. However, they also get a bad press in some quarters. We believe that this reputation is ill deserved, and that this style of auction site is a great format. Here we will make our argument, and in doing so, will help you to understand what you can expect from these sites.
Auction or Not?
The penny auctions are auctions, but they differ from the more traditional formats.
With traditional auction sites, people bid a nominal amount for an item, and this is the price they are willing to pay if they win the bid, they win the bid if their nominal amount is higher than those of their fellow bidders if they do not proffer the highest bid, they do not lose any money.
The penny auctions are slightly different.
People pay for bids and then place them on an item. This means that you pay money up front, and that if you do not win the bidding war, you spend money.
This is the problem that some people have, they cannot understand why they need to pay money to bid, but can end up with no item.
The reason is clear, it works in a similar way to insurance, each bidder adds to a cash pool, which is then used to pay for the item.
Only one person will win the item, but everybody pays to take the chance that it may be them who wins.
It is a risk and this is what you must understand when bidding there are no guarantees and you are in the running with many competitors. It is basically a mix of home shopping and gaming, but in an auction format.
How to Avoid the Problems that Some Complain Of
To avoid spending too much money, you need to keep the bidding in perspective. We have explained the format now, and how bidding is a risk. You must work out before you start bidding how much money you are willing to risk to take the chance of winning. Set yourself a budget before you start playing, and never exceed this budget. Only use disposable income, and NOT money that you need for bills, food, rent, etc.
Remember that the aim of the game is to have fun. These auctions are fantastic fun and you must bear this in mind. It is exciting, fast paced, and adrenaline producing. It is all about beating the buzzer and that will give youwella buzz.
Just keep this in mind: you are playing a game, but you hope to win. Adopt this attitude and you will be fine. Do not use these sites as a means to an end, for instance, if you need a TV, save up for it, but if you want a TV but do not need one, then bid.
Once you understand the format of the penny auctions and how they work, you will know what to expect. Do not become despondent, overtime you will learn the rules, and we hope, win a bid or two, or three.
by: John Samual
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