Blog & Save

The best bargain brains on the web come together to share money saving tips to finely tune your personal finance in a coupon blog you can't miss. Join us on our quest of living well – while spending less!

The Tech-pert: Are Penny Auction Sites Worth the Price?

By Guest Blogger(view all posts by Rick.Broida)
at 11:57AM Tuesday May 10, 2011
under Shop Smarter

Could I interest you in a brand new Panasonic Lumix DMC-FZ35 digital camera for $4.26? How about an iPad 2 for $12.75? Or a $100 Bed Bath & Beyond gift card for $0.92?

Those aren't made-up prices. They're among the recently completed sales at Sixjax, a new penny-auction site where you can score some pretty big-ticket items for a fraction of the list price.

At least, that's the promise. The reality is a bit different. If you're going to pitch your pennies at a site like this (and there are many), be prepared for costs, confusion and--quite probably--disappointment.
Sixjax works like BidRivals, QuiBids, and countless other penny-auction sites that have sprung up over the years: You pay up front for a virtual "bid package," a fixed number of bids you can use to try to win an auction. (In Sixjax parlance, you're buying tokens; each token is good for one bid.)

With that done, just find an item you want, then start bidding. Each bid raises the item's price by a penny. When the countdown timer for that auction reaches zero, the last bidder wins. The challenge--the game, if you will--lies in making sure you're the last bidder. And that's trickier than it sounds.

For one things, bids aren't cheap. QuiBids charges 60 cents per bid, though the going rate at most other sites is 50 cents. Sixjax is actually the bargain of the bunch, with bids going for just 40 cents apiece (in packages starting at $10).

Sixjax


So, let's say you're bidding on a Kindle. There's no way to know how many other bidders you'll be competing against or how high the final price will be. If it ends up at $2.75, that works out to 275 total bids (remember, each bid drives the price up a penny). Let's say you have to use 50 tokens to win the auction. That means your total cost is $20, plus the $2.75 auction price, plus shipping (which might be $5-10).

Needless to say, a brand new Kindle for around $30 out the door is a killer deal. And, who knows, maybe you used only 20 tokens. On the other hand, you could easily burn through 20, 50, or 100 tokens and not win the auction. You might spend $50 just for the privilege of bidding and walk away with nothing.

There's also a time consideration. Every time someone bids, the countdown timer adds another 30 seconds. If an auction gets as high as, say, $5, that translates to roughly 250 extra minutes, or about four hours--time you had to spend clicking "bid" to make sure someone else didn't take the prize.

Sixjax, for its part, offers automated "bid bots" that can do the bidding for you, but I found them confusing and ultimately fruitless. In my experience, I'd come back to my PC to discover that I'd burned through all my tokens--and lost the auction to someone else.

Ultimately, your success with penny auctions depends on how much time and money you're willing to invest. Just today a $99 Apple TV sold on Sixjax for $0.14--and the winning bidder used just one token (you can review the complete bid history after an auction closes). That means someone was able to buy that Apple TV for a mere 54 cents, plus $5 for shipping. And spent only a few minutes doing it. That's pretty incredible.

My advice: Do a lot of homework before you sign up with any penny-auction site. There are dozens upon dozens of them, and some have poor reputations . Make sure you know how the bidding process works, how much any given item usually sells for, and how much you're willing to spend. Ultimately, this is a form of gambling, so make sure you know yourself before you start.

If you've had any experience with penny-auction sites, good or bad, hit the comments and tell me about it!
Self-proclaimed cheapskate Rick Broida has been a technology writer for over 20 years. He has authored over a dozen books, including, most recently, "How to Do Everything: Palm Pre." Currently he writes the Cheapskate blog.