I've seen several commercials and internet ads for penny auctions like Quidbids. They all seem too good to be true. They claim you can purchase high ticket items, like Ipads for less than $100. Has anyone had any experience, positive or negative , with these sites?
Don't, those are very high risk / low reward business models, and the only people profiting with all of that are the owners. it's better if you just stay away from all that shady business.
Yes, it's true. The business concept allows them to sell items at very low prices compared to the market price. However, it is not always the best deal for us as customers. Let me explain... The penny auctions concept is that many people can bid on a certain item increasing the price 1 penny at a time. For example, if an iPad starts at $0.01, the next bid will increase the price to $0.02 and the next to $0.03, and so on... But here's the catch... Each bid costs you (as a customer) around $0.50 to $1 each. Bids are sold on packages. So following the iPad example, by the time that iPad reaches $50.00, the penny auctions company has already made between $2500 to $5000. Enough money to cover the iPad price plus a lot more extra revenue. You may get a good deal on penny auctions websites, but you need to have good timing because penny auctions have a time limit. If you have the highest bid at the last second, congratulations on getting a good deal. It can happen.
I've always been curious about how the whole system works and what the structure looks like, you explained it very well so thanks! At least they are still considered a legitimate business, right? I never knew profits for each item went that high though, seems like a very lucrative business model, I wonder why not more people put up such a business.
