The Lowdown on Online Auctions

If you keep up with the latest trends, you’ve probably heard the term “entertainment shopping.”  It’s typical marketing speak for something you probably know better as online auctions or penny auctions. The most popular of these are the penny auction sites, where you place bids in increments of a penny, and win the item you’re bidding on if you placed the last bid before time ran out. Penny auctions are so popular that you’ll see reports about them on the evening news and ads for them during prime time. Are you curious about these online auctions and how they work? Here are the basic facts you should know before you start bidding on any online auction site.

Buying Bids

Penny auctions are not the same as the better known auction sites like eBay, which operates on an English auction system. In an English auction, you bid on items against other bidders. At the end of the auction, the bidder with the highest bid pays the full amount for the item. If you don’t win the item, you don’t pay anything.

In penny auctions, you buy bids in advance at a pre-determined rate, usually between 40 cents and $1 per bid. Every time you place a bid on an item, the bidding price on that item will go up by a penny – but it will cost you the price of one bid. Your bids are used up whether you win the item or not, so even if you don’t win the item, you’ll be paying to bid.

Timing Auctions

Another difference between typical online auctions and penny auctions is how the auctions are timed. In a typical online auction site, each auction is set to last a specific number of hours or days. When the timer runs out, the highest bidder wins the item. Penny auctions run differently, and it’s important to understand how the clock runs on each penny auction website you visit. Generally, each auction runs for ten to fifteen minutes, but the auction doesn’t end until the bidding stops. This is a lot closer to the “going, going, gone” of the auctioneer that most people are familiar with.

Bidding Strategies

Obviously, the fewer bids you have to place to win an item, the less the item ends up costing you. That’s why bidding strategies are important. You’ll find lots of advice about bidding strategies at penny auction review sites and on online auction sites.

If you’ve never tried bidding on penny auctions, give it a whirl, but study the site first so you know how to bid and what each bid will cost you. The most important thing to remember is that this is supposed to be entertainment – set your limits and have fun.