Penny Auctions Tutorial

What are Penny Auctions?

Penny Auctions are timed auctions where users pay for each bid they place. Each bid placed adds a small amount of time to the clock. The last bidder to place a bid before the time runs out wins. Products won on penny auctions are typically brand new. Many are sent directly from Amazon.com!

Each site has its own particular rules and quirks, but all of them have the same basic characteristics:

  • The user must first sign up at a penny auction site and buy bids. Bids typically cost anywhere from 10 cents to 1 dollar each.
  • The item price usually starts at $0.00 or some small price (usually 90% to 99% off).
  • Each bid raises the price by one penny (hence penny auction). Some penny auction sites have auctions where each bid raises the price by a higher pre-defined amount. Some sites even lower the price on each bid!
  • Every time a bid is placed, anywhere from 10 seconds to 2 minutes will be added to the timer. This prevents sniping at the last second. This is similar to real (in person) auctions, where the auctioneer will allow time for bidders to outbid each other after each bid.
  • Some penny auction sites let users employ autobidders (also called bid buddies, bid butlers, etc). These tools let you automatically bid any time someone outbids you.
  • If no one bids before the timer reaches 0, the last bidder wins. They have to pay the displayed price plus shipping.
  • What if you lose? On some penny auctions sites, you lose the money in bids that you placed. On other penny auction sites, you can convert your invested $ in bids towards a discount in purchasing the item. This is usually called 'Buy Now'.
Tutorial

How can PennyStats help you?

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  • PennyStats doesn't host auctions directly. Instead, we track other penny auction sites that auction off products. We help you pick auction sites that are trustworthy and offer the best products and deals.
  • Look through our rankings and reviews to find a penny auction site you think is trustworthy. Or, look through our live listings of auctions going on to find a product you're interested in bidding on.
  • Go to the site, sign up, and buy some bids, and bid on the item!

Are Penny Auctions Scams?

Nope. You have to understand the rules. These rules can lead to you getting great deals -- just don't expect it to happen every time. Sometimes you'll be outbid and will lose. If the site you're bidding on offers Buy Now, you'll be able to convert your losing bids to a discount on the item, effectively not losing anything. But if the site doesn't offer Buy Now, you will get nothing if you lose. With a good strategy on a site without much competition, this can still mean you'll get a great deal.

You have to understand that there are elements of risk to penny auctions. If you have the mentality that you are going to spend five bucks in bids to win an HDTV, then you're basically gambling. If, however, you were going to buy an HDTV anyway, and you're bidding on a penny auction site that offers Buy Now, you're giving yourself a great chance to win the product at far less than retail. But if the worst happens and some nutcase outbids you every time, you'll end up paying roughly retail -- what you were going to pay anyway.

That being said, just like any website / webstore out there, there are a few penny auction sites that are fraudulent. They employ what are known as fake "bots" to shill bid against real bidders. Any auction is susceptible to shill bidding -- where the owner of the item bids against real bidders to drive up the price and profits. It happens on eBay and at in-person auctions. That being said, it's trickier to detect on penny auctions because the auction company itself can bid. Shill bidding is illegal and immoral and we aim to help drive our users to only the trustworthy sites.