How to Make Money with Online Auctions

Penny auctions and online auctions are among the most popular and growing niche websites on the Internet today. People love the opportunity to pick up big name products for a fraction of the price – but there’s more to the phenomenon than that. The fact is that online auctions are fun – they combine elements of competition and gambling to make the whole online shopping experience a lot more fun.

Several major networks and news shows have reported on the online auction phenomenon – and on penny auctions in particular. All of them concluded that most online auction websites are legitimate and users can certainly score great bargains – if they pay attention to what they’re actually spending. Those low, low prices in the display only represent part of the price on penny auctions, they point out. To figure out the true cost, you also have to count in the cost of the bids you used to win the right to buy the item at that low price and the shipping cost.

What they don’t generally talk about is the best way to make money with online auctions – running or working for auction websites. Consider the money facts and you’ll get a picture of the amount of money you can actually make when you run an online auction site.

In order to bid on products, users must buy packets of bids at $.50 to $1 each. Most auction websites sell bids in packets of 25 to 500, with discount pricing on bulk purchases. They also often run special auctions to purchase bids at a reduced price or promotional auctions that refund all or part of the bids losers spend on their bidding. Those promotional costs mask the huge amount of profit you can make, though. Here’s an actual auction example to give you an idea of the scope of profits from penny auctions.

The Item: KitchenAid Artisan Mixer

MSRP: $459.99

Wholesale Price: $125-$150

Auction Price: $19.98

Now that’s a bargain, right? Even at wholesale prices, the winning bidder got one of the hottest kitchen tools on the market at an 85% discount. How can the auction websites do it?

Simple. They’re crowdsourcing their profits. That $19.98 bid price means that there were 1,998 bids placed at $.50 to $1 each: they raked in at least $999 and up to $1,998 in bids on that mixer for which they probably paid less than $200. In addition, the winning bidder will pay the bid price plus shipping and handling, so the auction site makes anywhere from $700 to $1,700 in profit on that single item. Multiply that sale by dozens of auctions happening every minute and you begin to get an idea of the awesome money-making potential of operating a penny auctions site.

If you’re looking for an incredible earning opportunity without the responsibility of owning an auction website, you can look into an affiliate sales program with one or more of the dozens of online auctions and auction websites operating on the net. Check out other money making opportunities with online auctions today to find out how much you can make.