As you can well imagine, no site would receive enough penny bids to pay for a given item, unless it was a very cheap item, and then no one would want to bid for it in the first place! So, these sites work by charging a bidder to place their penny bid.
Items for sale are so desirable that the sites naturally attract a lot of interest, and this results in many penny bids being placed.
It looks at first glance as though on such sites you can bid and buy a car for just a few pounds - but in reality what you don't see is how much it has cost the bidders in the market for the car to place their penny bids in the first place as they all try and out bid each other and 'win' the auction.
Most sites charge anywhere from fifty pence to a couple of pounds per bid placed per person, so that they not only make enough out of the bidding to pay for the item that they are offering for sale - but they make a profit.
After all, what is the point in running a business if it doesn't make a profit! So, the question to ask is, can charities also run penny auctions and raise money for their foundations and good causes in this way? The answer is 'yes of course.
' What's more, because charities have such moral strength, they can go out and ask companies to donate items to them to sell for free.
That way, not only can a charity running a penny auction profit from the value of the bids placed, they can profit even more because their overheads are much lower.
If you don't have to pay for the item you are selling, every single penny you make in bids will be pure profit for the charity.
This is why you will soon see that a number of leading charities have already embraced this new idea to raise significant funds for their good causes.