Penny auctions are just like athletic races. In a race, people are competing with each other while the time runs out. In the same way, a penny auction is a race between bidders interested in the purchase of same product. When the auction begins, the starting price is at $0.00. Bids are placed increasing the final auction price by an increment of .1 cent per bid. During this time bidding starts and all the interested people bid before the set time runs out. When the time finishes, the person who placed the last bid is the winner and the product is theirs to claim.
In these types of auctions, you have to pay for every bid you make, and that seems to be the number one reason why penny auctions are misunderstood or even called a scam. In these auctions, you pay for bids before hand, and then use strategy when and where to place these bids.
For example, a person makes ten bids in an auction and wins at the tenth bid. He had spent the 10 bids from the pool of bids he already paid for before even beginning the auction. Another person makes twenty bids in an auction and loses even after twentieth bid. He as well, has paid for those bids. If you see profit-loss after just one bid, then either all people are in loss or just the winner is in profit and all others are in a loss. But when you take a collective overview of a person bidding in five different auctions and winning just one, then most probably he will still be way ahead in profit even after losing four other auctions. As an example, say a person is bidding for a playstation with move whose actual price is $400, he spends $27 for purchasing a bidpack of 30 bids and exhausts them all. Then he spends another $27 for another bidpack of 30 bids and loses them all again, then finally, spends another $27 and wins the auction.
He has spent about $81 in bids and got the playstation for a final auction price of $15 dollars. The total amount he paid was about $96 bucks for a brand new $400.00 playstation move bundle. Of course, you can see where this goes. Had he would have used a bit more strategy and waited he would have spent less bids. Had he also bought a larger bidpack, say a 200 bidpack for $120. It would have worked out to costing him about $135, gotten the playstation bundle, and then had about 120 bids left over (the total amount of bids he bought in the first place) so that he can participate in another auction with a decently strong chance of winning it. Strategy is a big key player in the penny auction world.
Penny auctions are carried on at many online websites. The popular misconception about them is that they are all scams. Not so, but there are a few that have been known to charge people and not honor the wins. A very reputed penny auction site where you can bid safely is at Beezid.com. They honor their wins to their customers, have real proof that the customers are happy, and not just by showing off a bunch of winners on the site, but by checking out their facebook fan page and seeing all the positive vibes on there from real people who have used the site. They seem genuinely happy with Beezid.
There are a lot of success stories of penny auctions bidders where some of them even get a product worth $500 for just $5, simply incredible savings. The products are brand new and are shipped within a reasonable timeframe. Check out Beezid.com and take your time over there to learn the ropes before you jump in on the action. Once you understand how it works and get comfortable with it, you will have much more success with it than those who just jump in there blindly. Registration is free, they will give you 10 free bids when you register, and you can use those in their Cherry auctions. Those are special auctions reserved for newbies who have never won an auction before. A really good training area to get started.
