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Pay Per Bid Auctions - How Do Penny Auctions Work Anyway

If you dig around online wondering "how do penny auctions work" and "what are penny auctions?" you'll see the most popular threads from people who scream at the top of their lungs that "penny auctions area all scams".

It's important to specify that there are some penny sites that do scam their users by creating never-ending auctions. This really is most common on sites that sell their own products - essentially the penny sites that don't offer a true marketplace for people to sell many.

To call every penny auction a scam is like saying all mechanics or automotive repair shops are scammers. Yes, a number of them are unethical within their business practices but i am not saying all mechanics are bad news.

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With that said, let's tackle the main question...

How can Penny Auctions Work

Most work off an identical auction model in which a method is listed for any penny. These items could be anything, but they're typically popular brand name items and electronics, gift certificates, cash prizes, etc. To be able to place an offer on the item you have to buy a pack of bids; each bid costs anywhere from a few cents to greater than a dollar depending on the site.

As you invest in the item, the cost increases by 1 penny and the timer around the auction resets. These countdown timers on pay per bid penny auctions are anywhere from Ten seconds to 60 seconds. The last person to bid once the timer reaches zero wins the auction. That each pays the listed cost of the product once the auction ends.

In most penny auctions, users get items for a fairly steep discount though there are some pay per bid sites that don't concentrate on countdown auctions. Another common bid auction types are Buy it Now auctions (referred to as a "reveal the price" auction), Lowest Unique Bid and 100% off (or zero bid) auctions.

Each of these auctions works differently, and requires a different strategy. There will have something in common however and that's always a nail-biting anxiety to getting the item in the end.

No matter what type of bid auction you join, you'll be facing steep competition that requires a reasonable amount of planning, as a result of deciding how many bid packs you need to purchase. Since some auctions can take a reasonable amount of time to accomplish and could require a substantial investment of bids and time, the very last thing you want to do is run out of bids.

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Are Penny Auctions Legit?

Around other traditional sites like eBay, yes - but not these. The most important part of setting up a strategy for bidding is ensuring you research and review the entire site in terms of policy, rules and the way the system works.

Make use of the information open to determine whether the website you select is reputable or if lots of users have experienced problems collecting their items - or losing constantly. Protect your own interests and you'll be able to use the data gained here on how penny auctions work in order to find success in your own attempts.