Penny Auction's For Silver And Gold....

Those bidding sites are relatively new and pretty smart from a company point of view. They give you the free bids knowing that it is not going to be enough.

And most items will go for a little cheaper then what they are worth, the cheap items they advertise are very rare. If an item sells in stores for 100, some people will go up to 99 to get a deal...

But even with you winning the bid close to this price, you have to pay for the item, and then on top of that you have to pay for your bids. So while someone may win an item for 100$, there could also be thousands of bids on it, which also had to be paid for...

Now these sites can be a lot of fun too because they are very interactive. I joined one, just like you with the free bids. I tried to go ia t the most obscure hour where there would be the least amount of people... no luck, haha

This would be fun eh....

I drive myself nuts at times with these schemes I come up with, but they give you bids every time to suggest to a friend to sign up, and if they do, you get free bids. If we got several of us sending each other site invites for the main four or so sites that deal in bullion, well, that would amass many free bids for those in the link. Totally legal, they like the attention and exposure, and some would buy some bids I am sure to go with there free ones to stack up a better chance to win. Naaaaaaahhhhh, it would never work, or would it....

Here's how "penny auctions" work, and why you can run one 100% legitimately and the winners get stuff at 98% off the normal price.

You buy the right to bid. To get you started, they may give you 5-10 "free bids", but after that, it costs typically a buck a bid, with lower prices for quantity, like $60 a hundred.

Up for auction is a $100 item, like a $100 GC or a pair of ASE. For the moment, let's say the seller pays the full $100 for the item. Obviously, if he gets it wholesale, he makes more money.

Bidding starts at 1¢. Each bid increases the price by 1¢. Thus the name "penny auctions".

As mentioned, a new bid resets the clock, until no one bids for 15 seconds or whatever the timer rule for the site is.

The last bidder gets the item for the top bid price, plus the usual s&h. Yes, you read that correctly. If the last bid was $2, the seller cheerfully sells you $100 worth of silver for $2+$5 shipping.

How is this profitable?

Remember that part about buying bids? In order to get to $2, 200 bids had to be placed. In the simplest example, use two bidders only, bidding against each other. Each one paid $60 for 100 bids, and the winner is the guy able to make the last bid with his last purchased bid.

So the seller (the auction site, I don't know any of them where you can run an auction) got $60 from the first guy, $60 from the second guy, and $2 from the winner, for a total of $122, a $22 profit on his $100 investment. Run a mere 100 auctions a day, and you're talking substantial money!

This is if the site is run 100% legitimately, and the seller pays full retail for the items. If he bought the ASE for $80, that's just another $20 for him.

Returns? Ain't gonna happen. Let's say you're the winner of two SAEs for $7 delivered. One of them has a minor flaw, like, I dunno, having been run over by a Sherman tank. We want satisfied customers, PLEASE send them back for an immediate $7 refund. Heck, you could even refund the guy's bid money, since you still get to keep the other bidders bid money.

I posted this info on another forum, and suggested a partnership with someone willing to set the program up.

Look at all the "straight" auction sites, and consider how complicated those programs are. A penny auction only needs four things: assignment of lot numbers, countdown timers, who has the top bid, and how many bids each bidder has left.

Consider how much a dishonest site can make. The simplest cons would be non-delivery and shilling. A shill works even better on a penny auction than it does on ebay. If you get the other guy to bid 100 times and he wins, you still get to keep the $60 he paid for those bids. Push him too far and end up bidding your own item back, and you still get to keep the $60 he paid for those bids.

These sites are what I would call a "statistical scam". They sell merchandise for a premium over retail price but disguise that behind a clever lotto type bidding system that creates a few winners and many losers.

It is the equivalent of raffling off a $200k home for $400k by selling 1000 $400 raffles. There will be one "winner" who gets a home for $400 but 999 losers. In reality, everyone is a statistical loser since they are paying $400 for a ticket worth $200.

In Vegas, they call that "dumb money" and the people who make those bets are known as "squares".

Very interesting info all....

I see new sites popping up to that are not yet running, so their are many taking advantage of it as Biggfredd mentioned, via starting the sites. Wonder how much the overhead would be on a site like that a month, pm's, website, and all?

I requested info on a couple not started yet, hoping you may get extra free bids on brand new site, and perhaps limited new members may give a small window early on to get something....

I have a dream, a dream to acquire a bar or coin of silver and gold, for next to nothing, and again I am not tapping into my gold and silver money to buy any stinkin bids, so if I can't figure out a loop hole it just aint gonna happen. I am not holding my breathe on that first win, that is for sure....

Another funny note pertaining these sites, I had an email come in the other day through ebay, from a gold coin collector who had researched these auctions and found this thread via google search I guess. He could not message me not being a member so he contacted me through ebay, and I basically told him don't do it unless you are gonna go big....

Anyhow, he was dreamin about some PM's for penny's on the dollar as well, lol....

I didn't win any gold but I won my wife a pair of Aquamarine and Diamond earrings plus twenty bids on BeeZid for one cent. Then I won a $200 pair of Oakley Sunglasses with a fancy case and two sets of lenses for 31 bids at .70 each. All of this started out with 60 bids that my wife had bought for $42 and she wanted me to do the bidding. I came very close to winning an iPad 2 also. The trick to the auctions is to wait until the timer starts to reset to 8 seconds as the auction nears the close. Before this the timer is resetting to 15 seconds every time. I also waited until there were only three people other than myself bidding. I figured between the flurry of the betting on a quick timer I had a 25% chance of winning and I did.When the timer resets that fast people are using up a lot of bids in a hurry, so you just have to have your bid in while the other three bidders are waiting for another guy to waste his bid to keep it going. I won the earrings for one cent by watching the auction start timer get down to zero. Usually people put a bid in way before the auction starts in case no one is paying attention to the start of the auction. In my case they weren't and I just put a bid in as soon as it hit zero. Instant win! I even got free bids and a badge for winning an auction with one cent. The earrings are actually solid gold with nice gemstones. The bids alone were worth $14. I doubt if I'll do anymore on those sites, but when I did I cleaned house for $42.

They make insane profits on the auctions. I see $600 laptops going for $40. That's 4000 bids at .70 a bid. I wish I could sell a $600 laptop for $2800. The Oakleys that I won went for $6.48. 648 bids times .70 is a lot of money for a $200 pair of glasses. It must cost millions to set up the website and advertise but I'm sure that they recoup their costs pretty quickly with the profits they make on everything. I'm not about to go on another auction anytime soon. I'm gettin' out while the gettin's good.