Auctions and bidding on things is a practice as old as time. When a company or an individual have an item which they would like to sell, rather than set a fixed price they have the option to let the market determine the selling value. In a traditional auction, this means that interested parties will place increasing bids on how much they would be willing to pay for the item in question, and the person who bids the largest amount of money will pay that amount of money to the seller in exchange for the item. The losers in this sort of auction do not lose any money, but they also receive nothing in return for their lost time and effort. A more recent kind of auction has come about with the rise of the internet: the penny auction.
Penny auctions are run through many websites on line. Some of these sites are scams which only exist to steal personal information, however, most are legitimate enterprises, and interested consumers should consult the appropriate resources on each particular site. Essential, in a penny auction, interested parties place increasing bids of one penny until the timer on the auction runs out. These timers may run for days or weeks. However, most are much shorter, on the scale of hours or even mere minutes. These short time frames ensure that many people bid on the item in rapid succession, thus driving up the price which would otherwise stay very low due to the one cent increments in price increase over time. As with regular auctions, at the end of the timed period, the person who placed the highest bid gets to purchase the item on which they were bidding.
Unlike a traditional auction, however, the losers of the penny auction do not get to walk away without paying anything. Instead, they must pay one penny for each time they placed a bid on an item. Often these bids are placed thousands of times on a single auction so that the losers can end up spending twenty or thirty dollars and have nothing at all to show for it. The winner, meanwhile, can often get a computer or other expensive piece of electronic equipment for ten or twenty times below the regular retail price.
Because of their unique bidding/auction style, penny auctions are in some ways a gamble; however, the potential rewards are enormous. Users interested in participating in these auctions should make sure that the sites they visit are reputable. Assuming they are, these users need do little more than sign up, look for items they are interested in, and begin bidding. So much time as they remember that they must pay for each and every bid, then there shouldn’t be any issues. If they are concerned about their funds, then many sites will allow people to set spending limits, thereby allowing them to maximize profits and minimize damages.