There are few of the online websites which is being primarily used for auction of penny. One among such site is MadBid.com which is a website for bidding fee auction that has been registered under the company Marcandi Ltd. in the UK. The company was founded in the year 2008 that operates in 9 numbers of European countries which includes UK, Spain, Ireland, France, Germany, Italy, Turkey, Austria, and Netherlands.
This company has received an approximate fund of £4 million from the founder of Skype which is also a kind of Venture Capitalist firm Atomico in the year of mid 2010. Because of this site was launched, there grew more number of bidders who have paid for the bids however they were unable to win nothing. But there were also other users who made savings on the items when it is being compared to RRP. This was supported by a report which was commissioned by the website Madbid.com from the accountants group BDO including the average cost to the ones who won in the auctions when compared against the RRP. They identified that the winner of each and every auction on gross were able to save 81% with a sample of certain number of auctions across the period of 6-month until the period November 2011. The losses incurred by the other users were not taken into consideration by the report.
Bidding Fee auction:
A bidding fee auction is also generally called as penny auction. This is a kind of auction that is known as all-pay where all who participates in the auction pays a non-refundable fee in order to place a bid which is incremental in nature. This particular auction ends after a certain period of time. This period typically varies between ten to twenty seconds, without the need for new bids. The participant who placed a bid at last generally wins the item and also the person owes to pay the price of the final bid. This might be comparatively lower than the original retail price of the particular item. This kind of auctioneer basically makes money in multiple ways. There are fees for each individual bid and the actual payment for the winning bid that is significantly greater than the actual value of the item. Such kinds of auctions are being typically held over the Internet than when it is been done in person.
Online auctions are the event that comes in various different formats. There are most popularly ascending English auctions sites, descending Dutch auctions sites, first-price sealed-bid sites, Vickrey auctions sites, or sometimes even a combination of sites with multiple auctions, taking elements from each one and merging them with another auction sites. The fame and popularity of these kinds of auctions have been pushed up by the Internet to an upper level that is beyond what had been anticipated for example Madbid. This is mainly due to the online auctions that break down and reduce the physical constraints of the traditional auctions like geography, time, presence, space, and a small kind of target audience.