The penny auction websites are becoming very popular in the web. The items that these sites commonly offer are great up to date items that can be delivered like smart phones and gadgets. The end price of the items is usually very low compared to the original retail price of an item. The highest bidder can sometimes get a $500 item at prices around $50. The auctioneers don't really lose even if the price is really low because of the bidding fee system.

How can this be profitable to the auctioneer?

The penny auction industry is questioned by some because many websites are also their own auctioneers. The system of how penny auctions work is not without the possibility of cheating. There is a fee per bid that you make. The average fee in US based websites is 60 cents which may seem small but can grow if you bid many times. If you bought an item for $100 in a website that has a 1 dollar bidding fee and you bet 300 times in order to win the item, you will pay a total of $400. The other bidders who bet against you must also pay fee per bid rate multiplied by the number of times they bid regardless of whether they won the bid or not. This system of bidding make many people question: "are penny auctions a scam?"

Tips in how to win penny auctions without risking too much money

You must know when to bet if you want to win in a penny auction. You must do your research on the people in a website that bids to know their bidding behavior and their betting limits. You must target specific items to limit the scope of your research about the other bidders. You will be prepared if you get all the necessary preparations beforehand. Once you have a list of people making bids in your preferred item, watch for the usual selling price of that kind of item. If you have all the information that you need, it will guide you on when to enter the bidding when to stop bidding if your opponent is too persistent.