subject: New Format Online Auctions: Learn The Game [print this page] If you are curious about the latest trend sweeping the internet by storm, namely the penny auctions, then you have come to the right place. Here, we explain the ins and outs of the penny auction.
The first thing to note is that these auctions go by several different names: pay to bid auctions, live auctions and penny auctions. Remember, then, that whenever you see these terms, they are referring to the same type of auction.
The penny auctions operate in a similar manner to the traditional auction format, but there are several things that set the two formats apart. Here is a brief guide:
Both the penny auctions and the traditional auctions end when the timer reaches 0. For instance, an item may be up for auction for 3 days. However, in the traditional auctions the timer will end exactly on the specified time from the start of the auction. So in this example, dead on 3 days. With the penny auction, on the other hand, each time a person places a bid, the timer increases by a set increment, for instance, 10 seconds.
With a traditional auction, the winner is the person who stipulated the highest bid when the timer runs out. With the penny auctions, the winner is the last person to place the bid before the timer runs out there is no higher/lower bidding strategy.
With the traditional auctions only the person with the highest bid wins the item. With the penny auctions every person that places a bid must pay, and they must pay each time they bid. For this reason, at the penny auctions, players must purchase bids before they start their bidding the cost of the bids varies from site to site, and further depends on the size of the bid package bought (the larger the package, the cheaper the cost per bid).
Unlike the traditional auction, where the final price of the item is determined by the highest bid, in a penny auction, the item increases by 1p per bid placed. For instance, if 1000 people place bids, the final cost of the item is 10.00.
The format of the penny auctions means that the final item price is always kept very low, but the chances of winning the bidding war vary depending on the strategy employed and the number of bids placed. It can be a little frustrating, but there is far more to gain from these auctions than the traditional auctions:
The items at the penny auctions are always premium items, such as iPads and laptops. Furthermore, because they remain very low in price, they are a great way to grab a bargain.
They are fun. This is the most important reason for playing. The penny auctions are fast paced and exciting, with the action often starting when the timer reaches about 1 minute from its end time. It feels like a game of whack-a-mole, when there are multiple players bidding on the same auction.
It is a great place to socialise, you will get to know your fellow bidders and have fun, too.
