‘Penny Auction’ Sites Offer Big Bargains
At a time when we’re all looking for bargains, is there a catch to buying a $150 Nikon Coolpix digital camera for 34 cents? Or nabbing a $699 Apple 16GB iPhone for $8.06?
There is: While you stand to get a great bargain, you could be bidding against several thousand others in an online auction for one item, and each time you place a bid, it will cost anywhere from 60 cents to $1.
E-commerce is taking on a different spin with sites such as Swoopo and GoBid that appeal to the bargain hunter with a competitive drive. The giveaway prices on name-brand products, the limited and timed offerings, strategy play and fast pace attract shoppers willing to bid money for the chance to buy something at a fraction of its retail cost.
How do these auctions differ from those on eBay? The sites are selling the merchandise, whereas eBay is a place where sellers and buyers meet — it holds no inventory.
But the biggest difference is that to participate in a penny auction, shoppers must buy a bundle of bids and use one every time they raise their virtual paddle. Bids cost 60 cents to $1 each and are bought in packs of 10 to 700, depending on the site.
The auction companies make much of their money not from sales of merchandise but from the purchase of these bids.
While critics have questioned this form of e-commerce as a blink away from gambling, others have called it a smart business model for the Web at a time when new moneymaking ideas are scarce.
Photo by Swoopo.
Jeff Schwandt on June 16th, 2009 12:41 pm
See these blog posts from Jeff Atwood at CodingHorror.com
Profitable Until Deemed Illegal
(http://www.codinghorror.com/blog/archives/001196.html)
Penny Auctions: They’re Gambling
(http://www.codinghorror.com/blog/archives/001261.html)
Jaclyn on June 16th, 2009 5:37 pm
I think these sites are a great idea. Many people look for bargains even when times in the economy are good little own when they are bad like now. Why pay top dollar for something when you can get the same thing for a fraction of the cost?
RedHotFranchises on June 17th, 2009 2:20 am
Wow! It’s a Great Idea, imagine being able to buy a Samsung LN40A750 40″ LCD TV for LCD then reselling it on eBay for $1,000. This is grooving opportunity!
Mark on June 23rd, 2009 4:52 pm
Good luck getting a deal on Swoopo, there are too many bidders there. Zoozle.com is the best upcoming penny auction site, they have good stuff and are very honest and fair too.
Scott on June 30th, 2009 9:44 am
The basic idea for reverse auctions or penny auctions are great, however the execution is flawed, especially with some of the bigger sites that now have too much competition on them.
Bidso.com will be launching on August 1st, 2009 with a brand new reverse auction format with FREE BIDS. Pre-register at http://www.bidso.com to stay notified!
Danny on July 2nd, 2009 1:03 am
Hello. Also a cheap website are http://www.luckyprice.net Good Luck
Tanya on July 4th, 2009 3:29 pm
check out http://www.pennyauctionwatch.com it’s a really good site with a penny auction directory for more sites with less bidders than swoopo
Penny Auction Site Zoozle on July 4th, 2009 7:00 pm
As part owner of the penny auction site Zoozle.com, I can say running a site of this nature is a lot easier said than done! The accounting, shipping, customer support, marketing, software development, server maintenance, auction scheduling, etc is much more than I originally anticipated. Not to mention the risk involved, we end up losing on most of our auctions. Customer attrition is another shortfall since many bidders walk away unhappy because they did not win. Just a heads up for anyone who thinks this is an easy buck!
Swipe It Up on July 5th, 2009 10:46 am
I have to agree with you zoozle. As part owner of the penny auctions site http://www.swipeitup.com, the challenge to handle all of the accounting, customer support, marketing, etc is a great task. We’ve actually created 5 different departments to handle all these things and have tripled our workforce since inception. People think that sites like ours are making money hand over fist but we actually lose a lot of money on many auctions. It seems like the auctions that are making the good money are using bots, shills, and other methods to defraud their customers. For those interested in penny auctions feel free to visit our site and try it out. We give away 5 free bids upon registration and 5 free bids at the beginning of every month. Happy Bidding!
Penny Auction Watch on July 29th, 2009 7:52 pm
Hey guys if you like Penny Auctions check out http://www.pennyauctionwatch.com, it’s a penny auction watchdog site complete with a penny auction forum.
Thanks!
MadBid on August 11th, 2009 2:18 am
a lot of people have their reservations with the new concept of “penny auction” web sites..
i hope this blog sets them to rest for the better..
if not.. this is another blog link that may help
http://hubpages.com/hub/penny-auctions
Krystian on September 17th, 2009 8:14 pm
As an operator of a penny auction site, I can attest that it is not easy to make the model work profitably while running an honest penny auction site. There are many costs, but outsiders only see the auctions which did yield good profit. They quickly glance over the larger number of auctions which were sold well below cost (even when figuring the bid count).
Also, scam sites pose a major credibility problem. PennyAuctionWatch.com is a great service to the community. There are many people out there running scam penny auction sites. People need to have a place where they can turn to find out whether a penny auction site is legitimate or not.
At BidRodeo we fully support the effort of Penny Auction Watch and encourage others to form forums, blogs, and use social media to out the scam sites.
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