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Penny auctions, you have probably seen banner ads in your browser and even commercials on TV. The auction prices sound too good to be true. That is because they are! It is a scam that could cost you more than buying the item directly.
Penny auction sites, including QuiBids, Beezid, Deal Dash, and others, advertise that you can purchase items for pennies on the dollar. For example, you could get a $500 Apple iPad for as little as $50. WOW! That sounds like a great deal.
When you sign up for your "Free" account, they give you a nominal amount of bids for free. You have to purchase the rest. Bids are bought in bundles and, of course, if you spend more, the bids will cost a little less. The introductory offer is usually about $.60 a bid.
After you have purchased your bids, you can go try to win your iPad. The bidding starts at $0.01, but you will only see that price when an item is first posted. Each time you bid, it costs you a bid token and the price goes up $.01. So if they sell an iPad for $50.01(+shipping and handling), then there were 5000 bids on that item. Let's assume the average user paid $.50 per bid. The penny auction site just pocketed $2,550. That's the penny auction scam.
"Yeah, but somebody got that iPad for $50!", you say. Sure, but how many bids did that person use up to get there? How many hours did they spend waiting for that specific item to close, only to not win it and have to start all over? What are the chances that you will be the one to have the last bid when the price seems so rock bottom for the item offered? The probability is very, very low. Add to this the confusing and distracting way the items are presented on penny auctions sites, it is hard to focus on only bidding on one item. If you fall into the trap of bidding on more than one item, it becomes much more difficult to know exactly how you have spent on that item.
Let's say you spent $100 on 200 bids at $.50 per bid. For an item with 5000 bids, that's only 4% of the bids. So AT BEST, you have a 4% chance of winning the item. Better odds than Vegas perhaps, but like a casino, penny auction sites don't stay in business by giving money away.
So, you might get lucky and win an item for a good price, but you are going to spend a lot of time and money to do it. It is more likely that you will throw money towards an auction and never win that iPad. The penny auction site makes money no matter what.
I have been lucky enough to get some wonderful bargains on eBay. The thing that I tell people who are new to the auction site is make sure you know the value of what you're bidding on!
When my daughters were younger, I loved to dress them in very traditional smocked dresses which were definitely out of my price range. However, by researching online the names and prices of clothing brands I knew to be reputable, I was able to decide if an eBay listing was worth going after money-wise.
I also loved to have my girls in long wool church coats in the winter and was able to do so thanks to eBay. I had one beautiful plaid Rothschild wool coat that was older or "vintage" that was in wonderful shape and always inspired positive comments, and I only paid fifteen dollars for it on eBay!
Other things to be aware of are shipping costs, bidding wars (don't get sucked in to one of those!), and the seller's feedback rating. With a little research and planning, I think eBay can be a wonderful way to stretch your budget!
By Kristen Lausman from Grand Rapids, MI
I would like to add a post for potential eBay Sellers. I was a seller on eBay. Read all of eBay rules and regulations BEFORE becoming a seller. The Buyer is fully protected, the Seller has next to nothing in protection from bogus bidders and/or buyers.
When trying to get something via an online auction, it is best to set your max bid in your mind and stick to it. On eBay you can do a search, then save that search to alert you if any items get placed for bid that meet your criteria.
This is a warning to all. EBay is a reputable auction site, and that's a good thing. However, many other "scam" auction sites have recently come into play.
You can find good deals at online auctions but one trick that some sellers play is they offer a low bid price for the product, but have a really high shipping price. Never bid on an item until you have calculated the cost of your bid and the shipping charge.
How I look at not getting burned by eBay sellers. I normally look for good deals, the description that is clear enough that I can see it in my mind. I look at the price of the item and how much is spent on shipping.
When bidding on eBay or other sites, always check the sellers rating. If below 97, I check I check the comments from other buyers before bidding.
Check online auctions for bargains before you make a purchase.
Ask a QuestionHere are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community or ask a new question.
I'm thinking about trying to sell on eBay, but I need complete written instructions on what to do as I have never sold anything online. I can't seem to find anything out, i.e., how to start, what to do, what to buy as far as supplies, etc.
By Marilee M.
There are simple tutorials on ebay. I doubt anyone will take the time to give you a button by click list of what to do. You can't break it so you might want to just try and see what happens.
This gal has tutorial that are free for 7 days and just 25.00 per month. If you know someone who already gets her services, you might ask them to share their knowledge. She does have a vast knowledge of eBay, so give her a try if you can.
And, eBay has this seller tutorial as well. Good luck.
I cannot give a click by click instruction, it would be too much to write out here. First thing is to sign up for an account. Are you aware that you have to pay when you list an item? Then you pay a fee again depending on what the ending price is? Those have to be paid with a debit card, or bank account through PayPal, so you will need a PayPal account as well.
When people pay you with PayPal, they take more of your money for using their service. You will need a scale and boxes, bubble wrap, permanent markers, plastic bags, envelopes, gas to and from the post office that you have to account for when determining a starting price, and a reserve price if any. Clothing DOESN'T do so well on eBay unless it's a one of a kind item. I won't buy on eBay unless the price is a savings from what I would pay in the store locally or nonlinear elsewhere.
There's a wonderful group on Facebook called "Stay at home moms selling on Ebay". After you join you can download her free ebook on starting up your Ebay business. Plus you'll be able to connect with tons of other people that have been doing Ebay for a long time.
Thanks for asking this question - I have wanted to sell on eBay as well, but have absolutely no clue how to do so. It seems so intimidating, so I'm trying to muster the courage to try!
There might be someone in your community who does ebay selling. My neighbor does and I take things to him, rather than mess with things. I save my boxes and packing I get from things to share with him, allowing him lower costs.
I understand how eBay works, but how do sites such as Bidz.com work? I don't quite understand. If someone could explain in simple language, it would be nice. Thanks.
It has been a while since I have looked at Bidz but if I remember right you have to purchase "bids" for lack of a better term. Each "bid" allows you to make a bid on an item no matter how much you are putting in as a bid.
For example, an item is at $10 and you want to bid on it. You have to use your purchased "bid" to say you want the item for $20. If someone bids over you then you have to use another "bid" to increase your bid. If you had made your first bid more than $10 (say $20) then you wouldn't be using another "bid".
And if I remember right you buy the "bids" in blocks. I think you can even bid on "bids".
Needles to say I thought it was confusing and expensive. No telling how much you end up spending on "bids" that you waste to get an item.
But again... to be clear... I haven't been on the site for many months. Maybe even for over a year.
Here is some very simple language. Don't bother with any sites that make you buy bids. It is a huge waste of time and money and you'll never win.
I agree with momma30. These sites that make you buy bids to bid are ripoffs. Avoid them at all cost!