Penny Auctions Scam?
78Can you really win at penny auctions?
I read an article recently criticizing the new craze of Penny Auctions. Penny Auctions are where bidders can only bid an item up by one penny at a time. The catch is that they have to purchase their bids in advance.
The article complained that Penny Auctions are in fact gambling because a bidder is not guaranteed to win an item even though they may have used bids in the effort. To this I have to disagree
Gambling means a game of chance, like roulette. The ball lands either on red or black, and is not influenced by any outside sources (although some may argue that the person tossing the ball on the wheel may have undue influence, this is a topic for another blog).
Penny Auctions on the other hand are much more involved than merely chance. Of course chance comes into play. Chance comes into play in many aspects of our lives, even crossing the street. If by chance there a truck gets a flat tire and loses control the moment you are crossing the street, then chance just played a role in your life. In a Penny Auction you may find that there are many bidders going after an item, or only a few...this may be a result of chance.
However chance is not the only factor that determines the winner of a Penny Auction. As I mentioned there are other factors that come into play. For example, most Penny Auction sites will have a timer that counts down until the auction is over. If a new bid is placed, that timer restarts and counts down all over again. Monitoring the clock, or as I like to call it, Clock Management plays an integral role in winning a Penny Auction. When the clock is high, and has a long way to go, a person usually shouldn't place a bid. When the clock is nearing zero however, a person may want to consider using one of their bids.
Watching how many people are bidding on an item is also critical. If there are only a few people going after an item then the bidding strategy must change as opposed to if many people are bidding.
Unfortunately there can only be one winner with any auction, whether it's an online auction, live auction, penny auction, or standard auction, is irrelevant. While Penny Auctions may be a little riskier, because in essence you are using bids that you've payed for with no guarantee of success, the reward is also much greater.
For example, let's say you are bidding on a flat screen television, with a retail price of $2500. If a bidder uses 500 bids, at say, $1 a bid to win that item, then they win that television for $500. A deal like this can't be found anywhere else!!
Penny Auctions are also much more exciting and inclusive to the user. Unlike the standard ebay auction where a user places a bid, and either wins or not, a penny auction keeps the user actively engaged, with numerous opportunities to win their item of choice for a great bargain. The key is good bid management, and making sure to set a limit for the number of bids that you are willing to expend on a certain item. Sometimes you may not get the item you were after, and other times you will. The savings from the times that you do win however will usually greatly outweigh the amount you used on the auctions you didn't.
Finding a good penny auction site is important as well. Some will have better price points for their bids, others will offer a larger variety of items. Finding a site that has a low price point per bid, with a great selection of items is the key. Check out 5050auctions.com which has one of the lowest price points out there, and where winners actually recieve 50% of the bids they used back to their account
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Comments
I would agree with BUZZ. We have to buy products, locate suppliers, spend hours in front of the computer to post products etc. etc. and then if someone can buy the product that retails for £1000 for £500 then they are still getting a bargain.
Yes not everyone wins, but then nothing in life is free. We at BD Auctions charge only for bids and not for the acutal auction price and also give customers free delivery. So customers get as much as they can.
At the end of the day, the penny auction sites are giving people the chance to buy products that would otherwise cost them a fortune in the first place.
Excellent article! I agree that it's not totally gambling, there is strategy, skill and reputation involved. If you are a known "bulldog" bidder, it scares other regular bidders away from the auction. Likewise, if you become known to just bid casually and not put down many bids, you can be an easy target to the major players. Some people are very serious about their penny auctions, they jot down notes and statistics from their auctions. I would compare it to poker, which is actually considered a sport in some contries (seriously! Russia considers it a sport..)
One thing the article doesn't point out, but is mentioned in the comments, is that a lot of sites are scam outfits that deploy fake bids (ie. "bots") so that auctions cannot end without posting a guaranteed profit. This is a straight up fraud. PennyAuctionWatch.com is a good resource to check to find out who's legit in this emerging industry.
I co-founded Zoozle.com to serve the penny auction community with a high quality of service and an honest, fair environment. Lots of auctions end at a loss for us, but that is the name of the game. There is risk for the auction house and bidders. One thing is right though, you have to be in it to win it! Happy bidding!
i only trust the founding fathers
I love love love this site!! I've won a bunch of stuff, and almost always I get it within a week. Love that. I also love getting half the bids I used back, as this allows me to win more without buying more bids. And I love that any item I win never costs more than 50 cents! I did have an issue with an auction one time that seemed to end prematurely, and their support department handled it quickly and with no hassles. All in all, one of the best penny auction sites I've been to. A few heavy hitting bidders on there, so you need to know what you're getting into before you committ to an item, but otherwise great odds of winning. And not just small items either. I've won a wii, a laptop, and a blu-ray player from this site. And I keep coming back for more
I completely agree with Buzzing Bob..
if it were so easy to be running an penny auction website, one would see atleast a gazillion similar sites popping up ..
Many Penny Auctions out there are failing. They look at successful ones and think that this is a great get rich quick scheme. The fact is, it isn't. It takes a lot of hard work and unless you are prepared and able to work hard (just like any business) you'll ultimately fail. For all those would-be bidders, there is no fee to watch the auctions. You can gain valuable information and make a decision on if the site is right for you without spending a dime. Also, make sure to read the TOS before signing up as well. This will save you a lot of headaches.
Please see these links:
http://bidcactusisascam.blogspot.com/2009/08/penny
http://bidcactusisascam.blogspot.com/2009/08/bidca
http://bidcactusisascam.blogspot.com/2009/09/penny
Do not believe anymore in pennyauctionwatch.com! SCAM SCAM SCAM!!!
I just became aware of the "penny auction" phenomenon. I stumbled onto Swoopo recently and thought I'd give it a shot for $20 to see if I could actually win some truly amazing bargains.
It became immediately clear that I was way out of my area of expertise. I couldn't understand what the deal was with the countdown timer and I sure didn't understand the "Bid Butler" well enough to risk anymore 6 cent bids.
It looked like a real suck hole with no comprehensible pattern to who was winning these things. I poured over the "Help" section... which was massively vague (to me) and I wrote to Customer Service to see what I was missing. (Customer Service referred me back to the "Help" section.
I just started the account on a lark, for entertainment...
with a modest chance of at least getting $20 worth of "something" at a good price. I figured that I could be patient and check into it once and a while, placing a bid here or there, with a least some confidence I'd end up with something other than a series of 6 cent misadventures.
I did not want a second job and I darn sure wasn't looking for another project.
I gotta tell you that I still don't understand why the timer clock does what it does. It seems to have a life of its own. (Customer Service will not go deep into explanations and their search engine and "topic list" is pretty inadequate... at least for someone as uninformed as I am.)
I'll give it a few more attempts before I ask if there's a way to cash in my "bid reserve" money.
I still find Craigslist far more "bargain abundant" and straight forward.
There is one more conduit for the true bargain seeker.
The most reliable, cheapest, and adventure predictable I have found to date is...
dumpster diving.
True, electronics don't fair well after they've been left out in the rain overnight... however you just can't beat FREE.
I'll keep trying the penny auction "game" for a bit longer, but I'm beginning to think my time is more valuable than a 6 cent donation to bid against someone with a degree in statistics and permutations... who clearly hasn't seen the light of day in some time.
If I were me...
I'd probably hop in my car and cruise the streets on the nights before garbage pickup. Soap is cheap and the stuff people throw out is flabbergasting sometimes.
Before you put a lot of money into penny auctions
I think this is a fairer opinion on whether penny auctions are a scam. The author also includes some legal opinion:
This website it’s the best penny auction website you will find. With your bids you get premium information where you can see how many are bidding on a auction and how many bids remain. It’s a great genuine website and now is the time to get great bargains. Register and try the virgin auction witch are free to bid and win it’s that simple and 100% genuine. The Customer Service that users receive is fantastic you will not get service like this anywhere else. There is also a new tool where you can now chat to other people on PsychoAuction with PsychoChat and tell them which items they should not bid on because you want to win them yourselves! Also new: If you purchase more than 500 bids within 7 days and use them on an object without winning it, they give you back half of the used bids. It’s great fun and you win also great place and the best. You don’t need Mathemitcal skills you can see how many bids remain. see for yourself, i have won 27 items so far and there have been many winners in the last week i won a netindo wii, LG TV and a 1000 cash and i am no expert in penny auctions.
Stev01: HTTP://WWW.PENNYAUCTIONWATCH.COM is not a scam, nor am I-the owner and editor a convicted felon. What is your problem? Can't scam anymore because Penny Auction Watch has collected dozens of comments re: your identity fraud scam penny auction site? It's pitiful what you're doing get a real job please.
To BUZZINBOB,
You mentioned that you are the owner of buzzerbidz.com.
and let me ask you a question, you said
" If a person bids $15.00 on a $299 product and is the successful bidder the penny auction pockets $1,500. But, would if the product sells for 34 cents? Then the penny auction would make a whopping $34 losing $265 "
You are the creator of this, you surely wont let anyone win by 34 cents. you will have your bots or whatever timer that you set for items not to win by anyone if lower than certain amount.
At the same time. those pictures or whatever items was won by anyone. those all you fake picture or even people who work under you. Basically you guys are bunch of scam bastards of trying to con others' money. please ... you will go to hell with the money you have earned...
To anyone who are agree with Penny Auction and left your supportive comments here in this website. You know who you are, bunch of scam bastard might have brain that only thinking how to make easy money. but at the end...you will have nothing left. Trust me. It is nothing to be proud of creating such a website or even have these sort of ideas. Telling people that is not easy to create this sort of website and telling how hard it is. please...i know there will be many people out there who are curious about penny auction and also people who are greedy. Yea those are the people will fall into your scam...
SHILL BIDDING. It could people who work for the site bidding against you or automated bots.
I am not an owner nor a staff of any of these kind of penny auctions. I came across a penny auction called www.Bids4penny.com about 3 months ago and purchased 100 bids. at first I didn't know if this is true or not but I just wanted to give it ago... I place 20 bids on a Xbox 360 and won the item for £5.70 which was unbelievable. I thought they are going to send me a bill for a full price and ask me to pay for the item in full but they sent me an invoice for £5.70 + £15 and I paid that as well... I received my Xbox 360 within 12 days and I couldn't believe my eyes... The second time I tried bidding on an ipod touch and didn't win it. the third time I tried it on a Nokia n97 and I won the phone for £7.40 and this time I thought they really going to send me a huge invoice but again they sent me an invoice for the final price and I received the Nokia within 4 days. so far I have won a few items on their website. I don't care what people say about penny auctions but I can tell you that they are not fake and you can really win bargains. I realised that the newer the website is the more chance of winning you have.
I'm unclear as to why BUZZINBOB would be in the penny auction business if he's so unhappy with it.
Why? Because it can be a hugely successful business model if done right. I've never participated in one, owned one, ran one, bid on one, anything like that, but I can tell you that they are making a decent profit on everything. It looks like a scam on the outside because people are not only buying bids, but also paying for each of their bids before they are placed. But think about this, and I read this somewhere else. Say you are in a race, all of the competitors put down 25.00 on the race, and the winner gets the pot. It's really the same thing if you think about it, the only difference is that some of the money goes to the race facilitator (site owner) and the rest goes for the trophy (The product you bid on)
I can't see how they are a scam yet, besides what I've read. But there is always a way to avoid it.. DON'T BID! Caveat Emptur (sp?) Buyer Beware. Do your homework before you blindly jump in and start bidding.
can you really win at penny auctions?
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do you think penny auctions are a gamble?
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BUZZINBOB says:
6 months ago
I am not here to hide who I am. I am the owner of buzzerbidz.com. I have read lots of comments saying that these penny auction sites are making money hand over fist. Let me tell you it is no walk in the park to get one of these sites up and running. These take countless hours to set up and run. We have to find suppliers, ship out items won, search for new items to list, answer e-mails, help people with accounts, Learn how to read scripts and the list go on and on. I don’t think that most people realize what goes into these auction websites. Read the example above from anonymous: If a person bids $15.00 on a $299 product and is the successful bidder the penny auction pockets $1,500. But, would if the product sells for 34 cents? Then the penny auction would make a whopping $34 losing $265. And take into consideration that buzzerbidz give bonus picks at the end of each auction to the successful bidder to receive additional bids and no one counts the free bids that were placed on certain items. This also takes away from profit. These auction’s are a lot of work to run and it is like any other business. (to make a profit) Take your average fast food burger joint. Do you really think that it cost $1.20 for them to make a large soft drink? Think again! It only costs about 5 cents netting them $1.15 per soft drink. If they sold 500 of them a day, they would make $209,875.00 per year! And thats just on soft drinks. Granted some people will not always win, but if you are fast enough to be successful even if you put in $12.00 on bids and won a playstation for $15.00 it would cost you $28.00 for a brand new playstation valued at $350.00. We all have been at a carnival and tried to knock the bottles down to win a prize. Some of us won a huge stuffed teddy bear and some of us won a plastic spider ring. Some spent a $1.00 to win the bear and some spent $20.00 to win the ring. We as humans love entertainment and this is what buzzerbidz is all about. Meeting new friends while obtaining heart pounding excitement while shopping for things you want. I am just tiered of hearing all of the negative comments about these penny auctions. If you like them, then play. If you don’t then don’t play. It’s that simple! I just felt that I had to throw in my 2 cents worth! ( no pun intended)President Of Buzzer Bidz Inc.