Penny Auctions Vs eBay

To understand the emerging market of penny auction websites one needs to understand the story from the sellers perspective. When talking about eBay one must mention paypal, you will seldom meet a person who says “I HATE eBay” usually the person will scream I hate Paypal. Most of the people who scream this are sellers or vendors who use paypal as their method of receiving payments. PayPal summed up in a few words is an e-commerce business that allows payments and money transfers to be made through the Internet.

The problem with all of this is that paypal allows millions of these transactions to flow through the internet daily which means heavy monitoring and strict rules. As one can imagine there is allot of fraud that occurs when money is being traveled digitally every second of the day, that being said it’s paypal’s job to monitor these transactions. Now that being said the party that suffers the most under these regulations is the VENDOR or the sellers. Most criminal enterprises operate under the guise of a legit small business. Once you own your own online business you actually have your own small business well at least that’s how your looked at by the powers that be.

Because vendors using eBay typically need a paypal account to sell their items, paypal in turn has this sort of power over all Vendors that use eBay. That being said in everything there are good and honest people and there are bad and dishonest people,  in the middle of all of this there are people who usually are not aware of the rules. As a eBay vendor myself there is something I learned quickly, what that is that theft happens online. If you make a decision to be an eBay vendor expect to get robbed at least once.

If you’ve ever owned a store you know you will get robbed by both customers and employees, online using eBay the story is you might get robbed by customers and screwed by Paypal. Paypal usually sides with the customer, what this means for some vendors is that they will have to take a loss, unfortunately most vendors are not in a financial position to take a loss, being that the customer got away and there’s usually know way for the vendor to catch the customer the vendor will typically blame paypal.

This is not the only story with paypal. Paypal is also known for shutting down vendors accounts without notice. There are hundreds of stories where vendors have had their paypal accounts frozen, closed or shut down and had thousands of dollars in them. Imagine that happened to you and that was the money you used to support your family. Would you be upset? i sure would be. That being said i am sure there have been cases where nice and honest people suffered for the evil deeds of others.

Introducing Penny Auction Websites

People know eBay people know the eBay brand and most people especially buyers have come to trust both eBay and paypal. This gives eBay a certain power over vendors, eBay basically puts vendors in a position where they need eBay well that is until the Penny Auction Websites started popping up. First off i would like to say i am not a fan of Penny Auction websites but i know allot of eBay vendors that have jumped ship and started their own penny auction website.

In my personal opinion penny auctions are a passing fad, but on that note i do think that penny auction websites are here to stay. i think they will lose power with every passing day but will be a secondary option for most people in the years to come. The problem penny auctions have is that it costs money to place a bid. There is also the risk of losing both time and money for the consumer. The final nail in the coffin is the bids are non refundable.

The idea of penny auctions makes allot of sense in “THEORY” but makes little sense in practice. A penny auction promotes itself as kind of a savior from eBay, they make everything seem simple and inexpensive. But the bottom line is you have to pay to play. Ignore the bidding for a moment and look at the real way penny auction websites makes it’s money… “The Bid Pack” . To me this is like walking into a store handing the cashier some money and picking up a bid stick. To me it just doesn’t make much sense.

Aside from this penny auctions do not cost bidders a 1 cent/penny at all in fact the prices i most commonly see is $0.60 – $0.80 per bid placed. On top of this the vendor who is also the owner of the penny auction website holds all the cards. From my perspective the chances of you losing are far greater here than at eBay– on almost every level. Remember used credits are non refundable which means even if you do win you have to factor in the amount of money you spent on the bid pack.

eBay Vs Penny Auctions You be the judge

From my view beats out Penny Auction websites on so many levels there really is no competition. When i look at a business i look at the consumers, is it fair to the consumer. Yes Paypal has some policies that are unfair to vendors but i don’t think penny auctions are the better than eBay on any level. Every participant in a penny auction website that’s been in the game for a while will tell you go after the lower priced items first and work your way up.

I laugh every time i hear this because that means they are encouraging you buy more bid packs, which means waste more money and waste more TIME. If eBay removed the auction portion of their website they would be looked at similar to an online Flea market where small business owners can flourish. Remove the auction component of a penny auction website you have yourself an over priced under staffed online store. Again in my opinion Penny auctions make sense when you’re the owner not consumer.

This is only my opinion I welcome your opinion or in put please leave your comments below. Your comments help influence others.