Penny Auction Sites Emerging as the Go-To Place for Consumers Seeking Spectacular Deals
Consumers are beginning to understand penny auction sites, and adoption is picking up at a decent pace. The holiday season promises to drive higher year over year volumes.
- (1888PressRelease) November 08, 2010 - For a while, penny auction site operators were having a difficult time developing critical mass to ensure the viability of their business model; however, with the prolonged economic morass, more and more consumers are taking a second look at penny auction sites, and many are finding great deals that cannot be had elsewhere.
Many are asking how penny site operators can continue to offer great deals on highly coveted items such as Apple products, and that's a fair enough question. A quick examination of the penny auction model will illustrate how penny site operators are able to not only survive, but also offer highly sought after and expensive items for seemingly pennies on the dollar.
Through penny auctions, people can win a certain item for a fraction of its real selling price. For example, imagine a hypothetical five-dollar bill being auctioned off via a penny auction. The auction may start at 50 cents and each bid increases the price by a penny (hence the name penny auction). People participating in the auction purchase their bids at a fixed price, say at 30 cents per bid. Participants can bid only as many times as the number of 30-cent bids they purchased. So, for that hypothetical five-dollar bill to have reached 1 dollar, 50 bids worth 30 cents each would have been thrown in by different bidders, and the five dollar bill has actually "earned" $15 from the penny auction despite the fact that its going rate is still at $1. The last bidder to put in his bid before time runs out finally wins the hypothetical five-dollar bill.
It goes to show that through a penny auction, bidders can win items for a fraction of what it's worth, while the auction site also earns money from all the bids that participants have purchase at a fixed rate (in the example above, at 30 cents per bid). Penny auctions require strategy and attention on the part of the bidder, and that is where the action and the fun originate for many participants.
Penny auction sites are also highly susceptible to loses, if consumers fail to show up and bid. Revisiting the hypothetical five-dollar bill, consider the ramification if a lone bidder shows up to partake in the auction. For a measly 30 cent bid, the consumer will have won five dollars. That's six cents to the dollar. Of course, the aforementioned is a hypothetical question, but the essence is all there: great products with the potential of being available at rock bottom prices. The value for consumers is compelling and the allure undeniable.
True bargain hunters consistently canvass numerous venues in their quest to score the best deals. "An increasing number of bargain hunters have begun staking their claims at penny auction sites, and the momentum is building heading into the busiest shopping season of the year," notes Peter Lessard, managing partner of pennyauction.com.
Pennyauction.com promises to be one of the largest penny auction sites in the United States. The site is poised to launch on November 15, 2010, and when it opens its doors, it will auction off loads of coveted products including, but not limited to electronic equipment, televisions, computers as well as household items and gift cards.
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