Penny Auctions on Craigslist

About a week ago, a number of iMac desktops appeared on, ranging in price from $270-$320 (that’s about 20% of retail).  I would like to own one at that price, so I sent off about 5 emails to advertisers asking for a phone number to contact them for details.

Each reply came back empty.  “Sorry, I already sold it, but if you’d like to get one really cheap, you should check out the xxx penny auction site.  I won several of them for only $70 each!”

Yup, another marketing scam.  Underhanded, and dishonest.  I have a growing dislike toward Interent penny auctions sites.  See my prior blog posts about how to win, and analyzing the finances of the penny auctions.  Pay attention – it’s very easy to loose lots of money after spending lots of time.  I know why some critiques compare these to gambling sites. BTW, all the iMac were posted to the Las Vegas region of Craigslist – gambling town, U.S.A.

If you review the prior blog entries referenced above, you’ll realize this business is very profitable for the internet sites, and profits increase linearly with the number of people they have signed up and bidding.  Based on final auction prices for items, gross take by the internet sites is about 200-300% of retail price for popular home electronics items.  There will be a lot of economic pressure for more and more of these sites to pop up until the people per site is diluted, dropping gross take down to about 100% of retail price .

About Brian

Engineer. Aviator. Educator. Scientist.
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