You’ve probably heard a lot about penny auctions, where items are put on the auction boards for $0.00 then go up a penny with each bid till the clock runs out.

Are Penny Auctions worth it?

To answer that question we should point out a couple of things. One is that auction members must buy packs of non-refundable Bid packs, where the bids are anywhere from 60 cents to one dollar - depending on the auction site. Each bid made sends the price of the item up one penny. Secondly the last one to place a bid wins the right to purchase the product. A countdown clock determines the winner at the end of the bidding cycle.

How do penny auctions work in favor of the house?

There is a big catch to the rundown clock. Each time someone places a bid on the item ten seconds (or more depending on the auction site) is placed on the clock. It is kind of like a basketball or football game where the clock stops each time a referee blows the whistle stopping the game and causing a delay, forcing the real elapsed time of the game to be longer than what fans see on the game clock. The last couple of minutes of such games can seem like an eternity. So that is what you have to be aware of with Penny Auctions.

If you think about it, if the actual bids being placed are 60 to 100 times the value of the price increments, then the auction can wind up being quite profitable for the site owners. So if, for instance, let’s say an item has a retail value of $30 and the final bidding price is $7.50, the winner gets the item for 25% of the retail plus the cost of whatever bids they placed on the item. So if they placed 10 bids (at $0.60 per bid) that would be another $6 dollars for at total of $13.50 for the item plus the cost of shipping.

There were a total of 750 bids placed on the item, in this case, for a total of $450 plus the selling price of $7.50 for a total haul of $457.50 for a $30 item, not a bad profit; and they will charge for shipping on top of that. The final sale price may be lower or higher depending on the circumstances of the particular auction cycle. But whatever the case, the fact still remains that the bids could be anywhere from 60 to 100 times the penny increments. That means the total money raised for each bidding cycle can add up to much more than the total retail value of the item.

If someone has a gambling addiction they may easily lose track of how much they are actually bidding. So it is important for each bidder to set a limit. Even if they think they are close to seeing the countdown of the clock run out, they don’t know how many other bidders may also be bidding to keep adding those few seconds each to the clock. You need to consider  that just like the last couple of game minutes of a football or basketball event can last much longer on a real clock, so too for these penny auctions.

There is also the possibility of shill bidders, either human or bots, secretly working for the house to keep the bidding going.

Is there a better way than how penny auctions work?

Yes there is and it is on this site. We designed a new auction concept where the bids are only ten cents apiece and the price goes down with each bid. It is located at Bidwey.com and we describe it as a New Wey to Shop. With the Bidwey auction, you know exactly where you stand in the line of progress each time you place a bid. As you place a bid on a particular auction item you get a message as to how many bids are left till when you can purchase the item at a deep discount, known as the Fill it Up or FIU. You will also know how many bids have been placed thus far. You don’t have to worry about shill bidders because such a thing would only benefit the bidders and not add profits to the house. There are also no countdown clocks. With each bid you the bidders know exactly where they stand.

Unlike at penny auction sites, you can calculate before you start bidding exactly how much you can save as the number of bids needed in total and the number of bids needed to reach the FIU are posted on the front side of the card for each item. You can also flip the card around with the hover of a mouse to get more product information or even click a link to go to the each item’s product detail page.

Bidwey has put up popular items for bidding, but they also opened up your shopping possibilities by adding gift cards from major retailers like Amazon, Best Buy and more so you can choose to buy what you want. To help you make your shopping decisions, we are adding shopping guide articles to the website's blog to help you navigate through your choices available at the different major shopping retailers.

If you join now you get ten free bids with your membership to get started. For every member you refer who joins and buys bids you earn another 10 free bids. So you have nothing to lose to get started on the fun and savings. We are also on a dedicated server so the website can accept bids as fast as you can move your finger when you are close to the FIU.