Penny Auction sites - Yes or No?

[dannyt0812]

What do you guys think to these penny auction sites that seem to be popping up all over the internet?

Ive had a bit of a luck into them and it really is quite a clever idea whoever thought of it. I suppose if you are lucky enough to win an auction with just a few bids then you will get a good deal. But then again it could take alot to win.

Either way, the owners behind this site are making a bomb. If you luck at some of the auctions that have finished on these sites, they are making like £250 PROFIT on every auction.

If you look at madbid, they are only 1 year old yet are raking it in.

How much money/time/effort do you think is involved in starting something like this?

[soviet]

I got lucky a few times usin Telebid/Swoopo but I would bother using them again. Its alot like gambling and if yu run out of bids then you have wasted your money on nothing. Saying that I did managed to grab hold of some top end cordless phones for £20

Effort wise I think the business model is easy to set up. With the case of Swoopo/Telebid apparently they didnt have the products in stock when you won them, hence the long delivery. They made a hugh profit on the products as everyone who bidded on the item paid to bid and only one lemon would win the damn thing (he paid for the bids then has to pay the final auction price), they would buy the product of another retailer after they had effectively 'sold' that item via the auction. This way they saved money on warehouses and storage and other logistical costs.

[waqasahmed]

Simply use eBay