Q: What is a penny auction?
A: Penny auctions are timed auctions, users pay-per-bid, and the last bidder when the timer hits 0 wins.
How it works:
- Users purchase bids
- Items being auctioned typically start at $0.00
- The price will raise in increments with each bid placed. (typically they raise by 1 penny per bid, hence the name, however there are auctions where each bid will raise the price by a higher pre-defined amount).
- With each bid placed, more time will be added to the timer, varies from a few seconds to minutes.
- The last bidder showing when the timer hits 0 is the winner, and has to then confirm their win, pay any final auction price (+ shipping) to receive their item.
- Some penny auctions enforce win limits, make sure you read all terms & conditions carefully.
Q: What is a reserve price?
A: The reserve price is set by the penny auction website, and will not sell the item until that price has been met, this is not common, but some sites do have undisclosed reserves and hold reserves by using shill/bot bidders.
Q: What is a penny auction timer?
A: A penny auction timer is what defines the beginning and end of an auction. Unlike most timers, these timers get time added on to them with each bid.
Q: What is the item price?
A: The item price is the price of the item being auctioned off. This price typically starts at zero, and increases with each bid placed. The price becomes final once the timer reaches zero.
Q: What is a bid price?
A: The bid price, is the price it costs to buy one bid from a penny auction site. Most penny auctions sell these bids in “bid packs” in small groups of bids. 10, 20, 25, 50, and 100 bids at a time. Many sites offer lower pricing for larger bid packages.
Q: What is a bid buddy/bid butler/future bidder/autobidder?
A: A bid buddy/bid butler/future bidder/autobidder will make bids on your behalf within the price range you set, and the number of bids to use. Bid buddy/bid butlers only bid when the timer gets below a certain point. This bid buddy/bid butler “trigger time” is different with each penny auction site, but is typically less than 30 seconds.
You can set the bid buddy/bid butler to bid for you:
Price range: $2.00 – $10.00
Bids to use: 50
With the above set criteria, the bid buddy/bid butler will bid for you once the price is above $2.00 and below $10.00, but only when the timer is at or below the website’s bid buddy/bid butler trigger time.
Q: What are free bids?
A: Free bids are given for a variety of reasons:
- New registration
- Customer appreciation
Most sites give a few bids upon new registration to allow a user to “feel the site out” before investing any bids in it.
Once a member, a lot of penny auction sites have referral programs where you get a set amount of free bids for each new user that signs up from your referral.
More rarely, upon either a glowing testimonial, or compensating for a delay or problem a customer encountered, a penny auction site may issue free bids.
Q: What are win limits?
A: Win limits are used to keep one or a group of people from dominating a penny auction. They often limit the amount a person or user account can win, inside a specified time frame.
Q: How can penny auctions stay in business when expensive items end for less than 90% retail prices?
A: Penny auction sites purchase from wholesalers and buy items at a large discount. The ending price of a penny auction may be 90% below retail, however it is the cost per bid x number of bids used to determine the total amount of money the auction made.
Q: What is a power bidder?
A: A power bidder is a person who will bid beyond an items value to secure a win. Often this is a person who wants their name to scare other bidders away from items they want, and are the source of win limits.