As author of the article, I hasten to stipulate that the theme of penny auctions is quite controversial and murky. The problem is that all bets are made online, and the products are provided by the organizers of the auction. It is impossible to assert that this auction is a complete scam, though here it is sold LCD TV for a couple of hundred dollars. It is impossible to claim that it is completely white project. I will give only an opinion about this, and try to cover the entire structure of this idea. So, let’s begin.
Penny auction – is an online auction in which the goods of different purposes are played – smartphones, digital cameras, laptops, gaming consoles, flash drives and more. This electronic auction is unlike any other that the initial cost of put up goods is in several dozen times lower than its real market price.
Conditions: Starting price of any commodity – is 1 dollar. With each bid the price goes up by 25 cents. Each bid increases the duration of the auction at a fixed time specified on the page of concrete auction. For the opportunity to make a bet it will be charged a token amount that is what let penny auction make so much fun and sell new products at prices that are in ten times lower than the market. The winner is the party who made the last bet.
Many people first saw this wonder of the world ask the same question: “Can it be a scam?”, “Why can I be sure I’m not cheating?”
The essence of the system of such auctions is very simple. In fact, the money makers do not receive profit not from the auction price of the goods, but from bets that make the bidders.
Let’s try to understand better and calculate everything in figures.
Let’s take as an example one of the lots which auction price is 402 dollars. Auction ended on the sum of £ 27 dollars. It was made 11,190 bets (calculate (27 – 1) / 0,25). The winner made the 3127 bets it means that it costs 187 dollars. As a result, the he bought the lot for 214 dollars. (187+27). Saving for a happy owner was about 45% of the total cost. Not bad.
If we look from the side of people who organized the auction then, provided that all bets were made by human beings, the lot was sold for 699. (11• 627) that is higher of the market prices by 66%. In fact, profitability is higher, since the organizers of the auction do not buy goods at market prices. If we consider as an example the cheaper goods, we see that the organizers can sell the product in 30 times cheaper without compromising themselves.
It is therefore it is devised and implemented such a bidding system.
Do you like auction sites? Then you for sure have to site.
And keep in mind that we live in the world of high online technologies. It wouldn’t be smart not to make use of the online network to find anything to get it at the best prices available on the market. Search engines, social networks, blogs and forums – all this will assist you to make a decision on many issues.
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