What Are Penny Auctions And How Do They Work As Online Auctions In UK?

Authorized auctions for generations have interested people mostly from affluent classes. It was a more sophisticated affair. On the other hand, there used to be unorganized bidding among the not so well-off in society, with the basic rules often flouted. It was in fact akin to gambling. But those days are gone. Now we have much cleverer and modern ways of bidding that can incorporate players from all strata of society and can work with all rules in place. Bidding now has become as sophisticated as it used to be due to the new methods being used and not for anything else. It has also become more robust and dynamic sans the Machiavellianism.

Like everything else, bidding too has become online and it is now more commonly known as a penny auction. In this article you will get to know what it is and how to go about it.

What is it?

As the name says it, it is first and foremost an auction. But it is of a special kind called ‘all-pay’. This means that all the bidders have to pay a bidding fee no matter whether they eventually win or not. The object being auctioned is however given to the highest bidder.

The penny part suggests that either the minimum price of products being auctioned is usually kept at 1 penny (1/100dth of a pound) or else the small incremental amount for each bid is kept at 1 penny. Usually both don’t take place at the same time. If the starting price is kept really low then the bid fee being added each time is on the higher side and vice versa.

Hence, the name given is penny auction..

How does it work?

• This works like any other auction but is much faster and dynamic as it involves the internet.
• What happens is that the bidder has to pay a non-refundable fee for his every bid on an object and eventually if he is the last bidder then he has to pay a collective amount of those bid-fees and the resultant object final price. This bid-fee can vary from 1 penny to 1 pound, if not more.
• In some cases the fee can be higher than the starting price and that is why bidders are given the option of buying a bulk of bids before the auction even starts. This is offered at a discount thus attracting the customer’s interest.
• When a bid is placed, it adds around 20 to 30 seconds to the online auction (UK) taking place, thus allowing other players to make their bids too. Once the timer stops, the bid is over and the one making the last bid pays the price and wins the object. This final price is more often much lesser than the original price of the item.
• Those who had paid the bid fees but did not win anything need not be disappointed as there are options like BIN or Buy It Now available that enables them to buy the object anyways.

Thus the conclusion is that penny auctions done through the internet can be very exciting and rewarding at the same time. All you need to do is understand the rules of such online auctions (UK) and do your bids accordingly.