Are penny auctions stealing the thunder from normal retailers? With some sites offering up to 95% off the normal retail price off brand new goods, how can the high streets beat these rock bottom prices?
High street shops are fighting back – the gloves are definitely on. How can these penny auctions websites make a profit if they sell items so cheaply? Well there’s more than one answer, getting overstock surplus, warehouse closeouts to great relationships with suppliers.
How can you tell if a penny auction is genuine? With so many sites offering attractive, high value products, it can be challenging to know which one to trust.
A normal retail shop on the high street can rely on its window displays and reputation that has been built over the years. Consumers can touch and try the products and pay for the items for a price that is fixed based on the shop’s running costs. You buy the item you want, you take it home and if there’s any problem with it you can take it back to the shop and ask for an exchange or refund. But a high street shop cannot afford to sell products at rock bottom prices because of their overheads.
Penny auctions don’t have a shop front so they have much lower overheads. In fact, you can set up an auction website quite cheaply – the real challenge is to get enough regular users bidding on the site.
What happens if you have a problem with a penny auction website? Do they reply to emails promptly? Do they issue refunds or give you a credit note like a normal shop would do? Do the items actually get delivered after you pay for them?
eBay: you set a budget in your mind of how much money you are willing/can afford to spend for an item and bid against other users to win it. If you are beaten to it, you don’t pay anything. There is a time limit to place bids (anything from 1 to 10 days) and normally the real bidding war happens in the last few minutes of an auction.
Pro: you can budget in advance how much you are willing to pay and if you lose at auction you don’t get out of pocket.
Con: users can take advantage of automatic bidding so you can end up frustrated as others are always outbidding you.
Penny auctions: you need to buy credits upfront in order to bid for an item. Whether you win an item or not, you still have to pay upfront. You need to decide how much you are willing to pay and budget accordingly. If you don’t take a rational approach to bidding, you could end up spending hundreds of pounds in a bidding war and not even win a product at auction. An auction could go on for a long period of time, as long as there are bidders competing against each other.
Pro: you can get high value items at a fraction of the price.
Con: bidding wars can get too heated and you may end up paying the full price for an item.
We found a great site where it’s actually impossible to lose in. MadBid have a new feature called Earned Discount. This means you can use the money you spend on bidding towards buying ANY product you want AND the prices are very competitive. What more could you ask for?