This is an exciting post for us because it is something we have done for a while now and have had good success doing it.
What is it we do? we win items on penny auctions and sell them for profit, of course this isn’t a 100% reliable business strategy so don’t go quiting your day job just yet. However it can be great for a bit of extra income on the side.
A quick look at how penny auctions work -
Usually the item that’s put up for sale is provided by the auction site operator. The price starts at or near zero and the price increases by 1 cent per bid.
However, in order to make a bid, you have to own a bid credit. Each bid credit costs between $0.50 and $1 and you have to buy them in advance, usually in packages of around 100, after registering with the site.
So, to keep it simple, if a bid costs, say, $1 a time, a package of 100 bid credits will set you back $100 and each time you bid and up the auction price by a penny, it costs you $1.
Buying and selling is actually commonplace on penny auction sites, it is the reason when you look at some user’s bidding history and see that they have won hundreds of items, chances are he/she probably sold them on for profit. We have spoken to many people that have made thousands doing this but there will always be an element of risk involved so take the necessary precautions and weigh up your options before you consider it.
The secret? don’t go for the Ipads! “what?” I hear you ask, “isn’t that where the money is?” that is what many people believe, sure if you can win an Ipad for under $50 then you will always make a nice profit however it’s slim that you will consistently win at that price.
Which is why you need to bid on ‘random’ items, these could be anything from golf clubs, to kitchen cutlery such as a set of knives. Most penny auction sites will list many items that people wouldn’t necessary go for. And it’s these items that are much easier to win. Remember, you are bidding on items that you want to sell afterwards, so it doesn’t matter if you bid on a life size toy story doll… because the idea is to sell it asap for a quick and easy profit.
Always bid on the auctions that you think you have a good chance of winning, it doesn’t matter what the item is because there is probably a market for any item and selling them is usually the easy part which we will touch on later. So bid first sell later is our motto.
Successful bidders can win anything from a television to a car or a cash sum, for a fraction of its real cost.
Sandeep Anantharaman is one bidder who has won in style. He bid less than £7 for a new Mini. Not surprisingly, he is delighted:
“I did not expect to get the Mini when I started bidding. But once I got the message from the auction site telling me I’d won, I couldn’t believe it. ”
Penny auction sites have grown quickly and now have hundreds of thousands of users.
Read more – BBC
Once you win the items, selling them isn’t too much of a problem. There are many sites you can use to do this and our personal favorite is probably Ebay. You can literally sell ANYTHING you find on penny auction sites on ebay because there is simply so many people using it, you can guarantee that somebody will be interested, even ridicules items like half of a chair can be sold on Ebay, amazing.
Even if Ebay isn’t an option then you can still probably sell off your winnings, there are many sites similar to ebay that can be used for selling physical goods online such as vivastreet for the bigger items. If that doesn’t work then try your friends! posting an ad on facebook or twitter make drum up some interest, although this may depend on the item. You may have difficulty selling half a chair on facebook but electronic items are still a great bet!
We are not sure how long penny auctions will continue to go on for, you can check out our post on the future of penny auctions here. But we feel there is still quite a few more years at the very least depending on how popular the sites become. So don’t rush into buying and selling until you are 100% ready.
Having said all this, it’s important to know where you stand on penny auctions. Afterall, there is never any guarantee that you will win. Here is some advice from the office of fair trading:
Advice from the OFT
- Watch out for misleading or fraudulent sites. Look for online reviews or comments about the sites to see if other consumers have experienced difficulties.
- Know what you are getting into: since you pay to bid, penny auction websites are more like lotteries than traditional auction websites. Sites can offer deals – but purchases can also turn out pricier than expected once all bid costs are added in.
- Remember, under the Sale of Goods Act 1979, where the seller is acting in the course of business, you may be entitled to return goods and get your money back if they are of unsatisfactory quality or not fit for purpose. This applies equally to penny auctions as to other traders.