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A Guide to Penny Auction Websites

Updated on December 3, 2011

For an everyday auction user, such as Ebay, penny auction sites can be a promising and extravagant opportunity to save high amounts of money. So what is a penny auction site? A penny auction site is an auction site where each bid raises the price of a product by a penny.

How Does it Work?


Unfortunately, there is always a catch with a "too good to be true" situation. In order to bid on a specific item, one must buy bids from the website. Bids cost anywhere from a quarter to a dollar, depending on bulk prices and the particular website. Every time a bid is placed, the countdown timer resets back to its original timer. However, timers usually start at ten or twenty seconds.

So if you bid to make a product jump from $1.31 to $1.39 and win, it will cost $1.39 for the product and a dollar for each bid. See how quickly bid potentially add up?

How Could These Websites Stay in Business?

I partially touched on this already, but allow me to go into further detail. Assume a bid costs a dollar and the product for auction retails at $1,000. Penny auction sites average about a 90% discount. This means the product sells for about $100. Therefore, about 10,000 bids were placed, since each bid only raises the product by a penny. Do the math: at a dollar each, the website just made approximately $9,100 off one auction!

Most of these penny auction websites fail within the first couple weeks on their existence. New websites mean only a couple bidders are bidding on an item, so the item will sell for literally a couple pennies, rendering no revenue for the website.

How to "beat" these websites


Being successful at a penny auction website is not too common, but certainly possible.

The key to success, which I personally proved to be true, is intimidation. Buy a bulk of at least 5,000 bids, which should be discounted for less than a dollar each, and pick a hot topic item to bid on. Most sites have an auto-bid option, meaning you can add any amount of bids to the table and the auto-bid will keep bidding until you are the leader and have won the auction. Stock up all 5,000 bids into the auto-bid feature and sit back. So, every time someone bids the computer immediately bids for you, putting you straight back up top.

So thousands of bids later, you have won a 72 (I think that's the size, or 73) inch flat screen television retailing at $3,000. Literally, you have lost a couple thousand dollars. Theoretically, mission complete. You have just scared all future bidding opponents by gaining a reputation as an auto bidder.


So a few hours later, another flat screen pops into the auction list and bidding commences, Soon after the auction reaches a few dollars, your infamous name pops as an auto-bid, again and again. Your opponents from the other flat screen quickly flee, knowing you are loaded with thousands of auto-bids. A few minutes later, you purchases a 72 inch flat screen television for $30. At the most, you spent about $200 total.

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