Is buying things on penny auctions sites like QuiBids.com a good idea? I heard you can get things very cheaply there.
QuiBides has a description of how the process works. Simply put, every bid costs money (60 cents to place) so when you win an item for $20 that's worth $100, there may be 200 bids that were not won, but the company pockets. The concept is a huge turn off for me. Too much like gambling.
Edit - given the selling price is nearly always on the low side (e.g "iPad 3G for $150!") I'm sure the seller gets most of the bid revenue. I don't know the exact details of the fee sharing.
There's been a great deal of growth in this market with new sites opening all over the world. It has only the illusion of being a bargain.
Each bid is worth 1 penny/cent and can cost anywhere from 50 pence/cents to 1 dollar/pound per bid.
Quick calculation: the auction site needs to clear 1% to 2% of the bid price to cover the cost of the item being sold.
From observation it appears that big ticket items (like a car) attract sufficient interest to push it over the 2% level quite rapidly (where "rapid" can be measured in days given that it can be up to two minutes between bids, at 1 cent a time). It is the lower-priced items that can often go for less.
However, this is all a function of the site's popularity. The earlier you get in the more likely they are to still be burning cash like the dotcom flameouts many are likely to be.
Go to a casino and play craps instead. At least you'll have a good time.
It amounts to chance, more or less. It's more of a "last man standing" deal: If you're the last person to throw in the towel and cut your losses, you win.