Penny Auctions

I've seen them all over the net and on tv but never really gave them much thought until I was browsing threw one of them tonight. Penny auctions have gone from a small single site that had a few items that were worth some money to a high dollar cash flow that is just ridiculously popular. I know that many of you have probably done the math but it really blew me away when I actually thought about how much money these sites are generating. For example, if they sold a camera that retails for $700.00 for $20.00 they are more than doubling their expenditure; so if they raked in approximately the same amount of profit for most of their products, minus a few failures, they are making thousands a day... who ever first implemented this idea is a person who's hand I want to shake because that person is a genius, although evil genius might be more appropriate.

>Selling something worth $700 for $20
>Making money

You pay a monthly fee to be a member of those sites.. selling or buying.

i knew it...

Sorry I forgot to include the fact that each and every bid raises the amount paid by a penny, hence the name, and that each bid cost a dollar to make add that to the fact that only some have monthly memberships most make you buy a minimum of 10 bids. On a side note they do have an incentive to buy a larger number, which is a few extra bids. Back to the point at hand, if you do the very hard math of multiplying the two numbers you will see the reason I said that they are, as my ghetto neighbors would say, making bank.
Again my apology for not including one of the main points so that my babbling makes a bit more since.

i find this interesting

Don't invest in them. I'm not sure about the montly fee, but in the fine print of the Terms of Agreement it states that they "reserve the right to end the bidding process of any auction at anytime." What they do with that is remove the bid at the last minute, but make it appear as though someone else won. So you keep bidding but you usually end up losing because "someone else got the last bid in before you did, etc." Sometimes, that's actually the case. Sometimes, you might actually win something. But it's a once-in-a-blue-moon happenstance. Diabeetus.

Some of them require a token in order to make a big and you have to buy the tokens in large bundles that can cost $100+

Costs a dollar to raise the bid by one penny. I bet it makes for some interesting dynamics for bidding wars. Since the company has an incentive to drive the bid up as much as possible... I wouldn't be surprised if there were numerous dummy accounts set up just to drive up bidding, as well as steal specific bids to sale them again.

There would have to be a very transparent auction process for me to ever use it.