Penny auction sites are best when it comes to grabbing
fabulous items at the lowest possible price. However, like in any other case,
foolish moves can drag you to your ruin very easily. Apart from every other
soft skills, the proper calculation always helps. This calculation is to be
done for each item individually. The purpose of this blog is to teach you how
to calculate efficiently and minimize, if not negate, you losses.
Live auction in USA is a very popular medium among buyer to purchase items but hardly anyone know how bidding websites make profit out of it.
Let's take, for example, a Samsung Galaxy S5 model
which is sold at a penny auction site for 18 dollars. Also suppose the original
price of this mobile in a Samsung store is 599 dollars. Now, in any penny
auction site, the auction starts at 0.01 dollars. Each bid increases the price
by 1 cent. So, this particular item saw 1799 bids to reach the final selling
price of 8 dollars.
In almost every penny auction site in the USA,
the cost to place a bid is 50 to 60 cents. So, for the 1799 bids, the users
have paid a total of 1799*50 = 89950 cents or 899.50 dollars. So even if the
site is offering the phone to you at 18 dollars, they are making enough profit.
In this case, they are getting 899.50 dollars from bidding and $18 from
selling, a total of $917.50. Deduct the price which the site paid to buy this
Samsung phone from a store, $599. They are still making a profit of $917.50 -
$599 = $318.50.
Now, take a look at the other side. Suppose, for the
same item, there are 5 active bidders. So, each of them placing 1799/5 =
approximately 360 bids. Each bid is costing the bidders 50 cents. So, each
bidder is spending 360*50 = 18000 cents or $180. So, even if you win the bid by
placing the final bid, you are effectively spending $180 +$18 = $198 for the item.
This is the best case scenario. This scenario can get better if there are more
active bidders.
In the worst case scenario, after placing 360 bids,
you fail to get the item or simply give up.
How much do you lose?
You lose the amount spent for bidding, $180.
Are you willing to risk this amount?
The question which faces you is how much to spend on bidding in the worst case scenario.
How much do you lose?
You lose the amount spent for bidding, $180.
Are you willing to risk this amount?
The question which faces you is how much to spend on bidding in the worst case scenario.
First, decide how much you want to risk on any item
and then know the bidding cost of the site. Do the simple maths and place your
exact bids.
| http://ca.nutbid.com/ |
| 467 Oakside Circle S.W. |
| Calgary, AB |
| Canada T2V-4T8 |
| 403-281-1614 |
