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Penny auctions are becoming popular by the day and every month hundreds of new websites are
opening up all over the internet. Websites such as Swoopoo and Quibids are well established in
this niche and continue to grow. Consumers are also tempted by the extremely low price
advertised by these auctions with savings in excess of 90% for most items.
However, as is the case with anything that is too good to be true, penny auctions come with
strings attached. As a consumer, you should be aware of how these new auction models are
different from the traditional auctions such as eBay or even local auctions. This knowledge is
important because without this, consumers can potentially lose a lot of money in the process.
Here are some of the main differences you will notice between auctions from sites like Quibids and
sites like eBay:
Bidding is Not Free
This is the first surprise to anyone who has never tried penny auctions before. In any traditional
auction, bidding is completely free. You can place as many bids as you want and you will have to
pay the price of the item if you win. This is the case with eBay and in fact almost any other
traditional internet auction site. However, penny auctions are different in that you have to pay
money for each and every bid that you place. Thus the final price that you end up spending on a
winning item is the sum total of the winning bid on the item and the cost of all the bids that were
placed.
For example, in a Quibids auction, you might win an item for $10 after placing 40 bids. In Quibids,
each bid costs $0.60. The final price for that item should be calculated as $10 + $0.60X40 = $34.
The Timer Increments Every Time
Unlike a traditional auction, the time when a penny auction ends is not known because after each
bid, the timer increments. Unlike traditional auctions like eBay, here the timer is not set to a fixed
value. The timer only goes to zero if the time runs out and no one else bids. If instead, someone
bids before the timer goes to zero, then the timer gets reset.
This is another confusing aspect of penny auctions and is an important thing to remember. A
number of beginners are stumped by the changes in timer. They expect that 2 seconds left for the
auction to end actually means that the auction ends after 2 seconds, which is not the case. It will
end only if no one else bids in the meantime. If someone bids, the timer gets reset.
The 'Bid' is not Decided by You
In an auction site like eBay, you will simply enter the bid for the item and if someone outbids you,

2. he can bid any higher amount. This is not the case with penny auctions. Here, you can only bid
that will increase the price of the item by 1 cent (In certain special auctions, it can be 2 cents or 5
cents). Thus the bid amount is not decided by you - you can only place a bid and that will
automatically make the price of the item increment by 1 cent. (Thus the name penny auction)
No Obligation to Buy
In traditional auctions, once you win an item, you must purchase it, because otherwise the
auctioneer will lose money on the item. In penny auctions, the auctioneer like Quibids or Swoopoo
makes money from selling the bids and not from selling the product per se. Thus you are not
obliged to buy an item after you win it. However, in almost all cases, it is in the consumer's best
interest to buy it after he wins, because the additional cost associated with the product cost is very
less compared to what is spent on the bids.
You can Lose Money Without Winning
This is the aspect of penny auctions that makes them risky. You can end up bidding on a lot of
auctions and win none of them, but you will still lose a lot of money. This is very unlike an auction
of eBay where if you don't win an auction, you just don't get an item - nothing is lost really.
Therefore it is important to be aware of the right bidding strategies in penny auctions because
otherwise you will end up trying out many different auctions and winning nothing.
If you are looking for winning strategies for penny auctions, the best source is my blog. Visit
http://quibidsblog.blogspot.com/ to learn about Quibids strategies, Quibids review and everything
else you need to know to win big. The blog also features essential tools to win all kinds of penny
auctions.
Article Source:
http://EzineArticles.com/?expert=Sid_Kal
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Up to 500 Free Bids Over $300.00 in Value for #1 Penny Auction Site! Join Free today and I will
be giving up to 500 Free bids to all users who sign up!
http://500-Free-Bids.TheWorldIsforSale.TV/
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