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The following article was published in our article directory on March 19, 2012.
Learn more about SpinDistribute Article Distribution System.
Article Category: Shopping
Author Name: Tami
By any terms, a penny auction is an online all-pay auction system based on interactions with various participants through incremental bids for a certain period. This is achieved by paying non-refundable fees to the auction. Once the time is up, the last person who outbids the other participants wins the auction and the items on display. He is also required to pay for the item won (which is now sold to him at a much lower price).
Auction activities are not that complicated, since participants are only required to pay non-refundable fees so they access the bids. Each of these bids automatically increases the item's value and price in small amounts and the auction time by mere seconds. The bid prices will vary per site and the quantity displayed at a time. Once an auction session is over, auctioneers name the winner of the bids and collect the item's final cost along with the money collected through the sale of the bids. Some auction sites come with a "buy it now" feature to allow users to use the money spent on the bids during auctions to the item's full retail price.
While this remains a sound and stable online platform for entertainment, penny auction activities constantly suffer criticisms from all angles. This is most probably due to the nature of some participants spending their fortunes and end up losing in the auctions, or worse spending more than they really have to (more of the item's retail value and more than they would eventually end up winning). This is so since analysts have discovered a pattern in the auction model very similar to that of gambling. And while it remains true not every auction site operating online are found to be scams, some are being tagged as online gambling. It all depends on the bidder having discipline over it. He has to do his homework and learn how the bidding system works so he can set a limit for himself and walk away upon reaching that limit.
In fact, penny auctions do not really meet any criteria of gambling. Even if these auction sites ask for upfront considerations so participants can access monetary rewards, the outcomes will be based on the skill of the bidder to read the bids so he can minimize the costs and never entirely on luck.
Some auction site operations have been closed down by the state as a result of their investigations. Based on some evidences presented, these particular auction sites were discovered to be scams and that they do not deliver their merchandise on time. Some were also found not affiliated with the Better Business Bureau (BBB), or they were members but with poor ratings.
To win, participants are encouraged not to go on a bidding spree here and there. The ideal way would be to focus on winning on a particular bid at a time. He must also understand he will lose some along the way, and that he must invest more if he wants to win bid items. It would also help if penny auction participants have strong Internet connections. Slow connection would always put them at a disadvantage over others.
Keywords: Penny Auction
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