How The Folks At DealDash Turn A Profit

If you're a fan of online auctions, you may already be familiar with the site DealDash. This is a popular auction site where premium merchandise (especially electronics) gets auctioned off for prices that are mere fractions of the items' recommended retail costs. How can the operators possibly afford to operate with this business model? Read on and find out how the system works.

The Principles Of Penny Auctions

When you register for a site like DealDash, you have buy bids before participating in an auction. Each bid costs you sixty cents. When you see an auction that's appealing to you, you can start placing bids on it. Each bid you (or other bidders) place drives the price of the item up by a single cent. The secret that makes the process profitable is that the cost of your bids goes to the auction site regardless of whether or not you win the auction. Yes, the site might sell an iPad for just fifty dollars. If they collected five thousand bids to set that price, though, their profit is three thousand dollars. Even after accounting for the cost of the iPad and the site's operational overhead, that leaves a hefty net profit!

The Pitfalls Of "Buy It Now"

One feature that makes DealDash distinctive is its "Buy it now" option. When you bid on an auction but don't wind up winning it, the site lets you purchase it at full "retail" price. The cost of the non-winning bids you made is subtracted from the final price the site charges you. This is a great proposition for the operators, but not so good for you. The site's under no obligation to keep its retail prices (or its shipping costs) competitive, so you're rarely going to get a good deal on items purchased this way, no matter how much of a discount you've qualified for.

Hopefully, this quick guide has been illuminating for you. With a decent understanding of the basic principles that drive penny auction sites, you should be well-informed and prepared to make sensible decisions in these kinds of auctions.