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The following article was published in our article directory on April 9, 2012.
Learn more about SpinDistribute Article Distribution System.
Article Category: Shopping
Author Name: Kelsie
Electronic gadgets can be costly . That said, if you are frustrated by the fact that you cannot keep up with the advancements in technology because your funds are limited and there are simply other things that you need to prioritize, you should definitely try penny auction. If you are not familiar with this and as such are puzzled as to how you can get hold of the latest gadgets this way, read the rest of this article for answers to the basic questions you might have regarding penny auctions.
What is a penny auction?
Penny auctions are a way of buying and selling items that requires interested buyers to outbid each other for the goods they want. The last and/or the highest bidder is usually the one who gets the item. Also known as bidding fee auctions, these are classified as an all-pay auction because bidders are required to pay a fee to be able to bid for an item. This means that whether or not you win, you need to shell out a specific amount to be considered eligible to get the item you are interested in.
How does a penny auction work?
In penny auctions, the first thing you need to do to be able to place a bid on an item of your choosing is to pay a fee or buy a bid package - the amount of which varies depending on the site owners. Once you meet this requirement, you can start placing bids on the item you want to get.
Before you start clicking on the "Bid Now" button, you should be aware that in penny auctions, every time you place a bid two things happen. First, the price of the item goes up. The increase is usually small - oftentimes the cost only increases by a penny. Second, the time limit before bidding for the item stops is extended by several seconds.
Penny auctions make use of the "last bidder wins" model, so if you are the last person to place a bid, you will get the chance to purchase the item that is up for grabs. This means that you have to shell out money twice before you get the item you want: first, so you can bid on it, and second, to purchase it.
What are the advantages and disadvantages of bidding for an item in penny auctions?
There is one obvious advantage to bidding for an item in penny auctions which is actually also the reason for their popularity in recent years. This is the fact that you can buy the item you want for a price that is significantly lower than its market value. This means that as long as you employ the right bidding strategies and win the bidding war, you can enjoy huge savings for a variety of items - the most popular of which are electronic gadgets.
When it comes to disadvantages, there are quite a few. First, before you win an item in a penny auction, you need to shell out money. Unlike traditional auctions, then, you stand to lose money if you fail to be the last bidder for the item you want. Second, as with other online endeavors, there's the risk of being duped if you are not careful with the penny auction site you choose to deal with.
Keywords: Penny Auction
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