Bidding war

Dear PropellerHeads: I've obviously heard of eBay and other auction sites, but a friend of mine just mentioned something about penny auction sites. The concept sounds a little crazy to me. What do you know about them?

A: You and the majority of us have heard of eBay and at least understand the concept of online auctions. You find an item you want to buy and make bids until the price gets too high or you win the bid. The most you lose with this type of site is the money you spend on the auctions that you win. It costs nothing to bid so if you've got time to kill, go for it.

The penny auction sites you asked about work much differently from eBay. After registering with the site, you can then buy bids. That's right - you must buy slots in order to bid. Some of the popular sites are www.bidsauce.com, www.bidstick.com and www.beezid.com.

The cost for the bids ranges from about 10 cents to a dollar or so. Each bid you post subtracts one from your inventory. Many of the penny auction sites allow you to buy bids in bulk for a slight discount, and some even offer bid slots as a biddable item. Whereas you might spend $25 for 25 bid slots, for $50 you might get 55 bid slots. All the sites work differently, so be sure you read the site's FAQ before participating.

Perhaps spending a dime to post a bid doesn't sound too steep, but a dollar per bid is out of my league. Each bid posted on the penny auctions raises the price of the object being bid on by only one penny, so there may well be some really good wins if you are careful with your bidding.

Now for the catch: As time winds down on the bidding, the clock is re-set (rules vary from site to site) to accommodate more bidding. With each new bid that comes in, more time is added to the clock. I don't know about you, but that just sounds plain unfair to me.

The logic behind that is that in a live auction, the auctioneer always finishes a bid with the phrase, "going once, going twice, gone." Until gone is uttered, the potential exists for the bidding process to revive as someone could at the last second put in another bid.

So why would someone use a penny auction site over a more "traditional" site like eBay? Some see the bidding fee as a wager, and the whole concept as a game of brinkmanship. If you like to gamble and you like online auctions, penny auction sites give you a way to combine the two. As for me, I'll just stick to eBay and online poker, and keep them separate.

I'm certainly not going to waste my time or money on auctions that charge to place a bid. You go ahead if you wish. I'll save my pennies until they become dollars and then I can go on a shopping spree at The Dollar Store or maybe start my own penny auction site! Got a few dollars to send my way?

When the PropellerHeads at Data Directions aren't busy with their IT projects, they love to answer questions on business or consumer technology. E-mail them to questions@askthepropellerheads.com or contact us at Data Directions Inc., 8510 Bell Creek Road, Mechanicsville, VA 23116. Visit our website at www.askthepropellerheads.com.