Okay, I know this may be a crazy question because they have been around for some time now, but I’m curious about these penny auction sites I see all over the internet. I’m also wondering if any of you have ever used one and could possibly explain to me how it works exactly. From what I understand, you purchase bid packs (which is basically buying 1 bid). Now where I get confused is by how much you are really spending on these items. For example, when the ad on the sidebar says “I won an iPad for 11.97, did the winner use $11.97 in bid packs to win the auction, was that the final price of the auction, or did she pay more than $11.97? Someone help me out here, because I know that these sites aren’t just giving stuff away.
I understand that in terms of earnings, they probably make the most of their profit on the sale of bid packs, because only one person can win an auction so if hundreds of people buy and bid, they have sold nothing but a chance to win to many people. On the other hand what I don’t understand is how they are making enough to profit by selling such high value items.
Sure, I could do this research myself, but honestly I don’t have time, and would prefer to hear your own success stories (if you have any) from using sites like this.
I noticed that DealDash claims to be a fair and honest auction site, but I wonder if that is because they also offer you the chance to buy it now, after losing an auction. If that’s the case, then yes it is fair and honest because you are reimbursed for your bids if you make the purchase (assuming they don’t price gouge), but I still wonder, if the winners are truly winning or if they are Charlie Sheen “winning”!
At this very moment I see auctions for:
A $25 Target card going for $1.96 (with 20 seconds left)
A Keurig Mini going for $6.78
A 40 inch LG TV going for $87.00
So tell me people, what is the deal? I have found when things seem too good to be true, they usually are. Please tell me if I’m wrong!