Huntsville Alabama Startup Has The Answer To Losing Money On Penny Auction Sites

Over the past few years penny auction sites have exploded. Just about every TV network has a slew of ads promoting one penny auction site or another. “Imagine getting the new iPad for $25” that’s how they attract bidders to their site. Many people have avoided penny auction sites because of the old adage, “If it sounds to good to be true it probably is” however, if you understand how penny auction sites work, with a little luck it can prove to be very profitable.

For those of you not familiar with the penny auction site, here’s a little primer of just how it works. You register for the site and link a payment source. The product that you’re bidding on starts off with a penny and moves up in price as more people bid on it. Easy enough right? Well while you’re bidding on the item at penny intervals, there is a payment or a bid cost that you incur, it could be anywhere from $.25 to $.99 so as you increase the cost of the item you are dumping that much more money into the auction itself.

When the penny auction closes, let’s say for that New iPad for $25.00 that could have been 2500 bids. If that penny auction site is charging say $.25 per bid that’s $625 they just made for the new iPad which would have cost you $499 in an electronics store. Now say you’re the winner. You would pay $25.00 the cost of the winning auction, but lets also say you have 100 bids in.  So now you’re paying $275.00 for the new iPad not $25.00. However, look it at for what it’s worth you just saved half price on a brand new iPad. What happens with the money if you don’t win?

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