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Technology manages to provide online consumers some great opportunities. One of the new opportunities available to people online is penny auctions. Many people are confused by penny auctions and it is easy to see why. They have become extremely popular over the last few years, mainly because they offer individuals the chance to save huge amounts of cash! What are they ? Penny auctions are auctions where the buyer pays to bid on an item, plus the final cost of the item. This is slightly different to traditional online auction websites, where the buyer will pay nothing for bidding, but they will need to pay the price that they won the auction for. Sites will vary, but prices will vary per bid. Essentially, each bid that gets placed will usually increased the price of the item by $0.01 on US websites and 1p on UK websites. How much do items sell for ? Items on penny auction websites sell for extremely low prices. Generally, consumers can expect to get 70% off the RRP, which obviously represents a huge saving. Of course, it all depends on the popularity of the products and the amount of people bidding. Some sites are general auction sites, so will list all kinds of items, where as others will specialise in things such as extreme sports or fashion. How can the website sell the items so cheap ? Unlike a traditional auction website, a penny auction website gets revenue for each "bid" that is placed. Bids will vary in cost depending on the website in question, but here is an example of how it could work. CD Player: RRP £100 Bid cost: £0.50 Price: £20 Bids: 2000 Revenue: £20 (sale price) + £1000 (bid revenue) As you can see, the website makes more than enough money off the bid costs. By creating a revenue stream through the bidding, they are able to sell the items are extremely low prices. So are penny auction sites worth looking at ? Of course they are! Penny auction websites offers online consumers a unique opportunity to get some top quality items at ridiculously low prices. Instead of having full RRP for items, they are able to get 70% off. Of course, sale items occur in most stores, but they are usually end of line items of last year's stock. Penny auction websites allow consumers to get brand new items at huge discounts. BidGrid are an innovative online penny auction site where it's the lowest unique bid that wins. See how it works.
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