Online auction sites have been around since 1998, but there is still a lot of uncertainty about how they work.  If you are unsure, or simply want to find out which online auction is for you, here is our run-down of the most popular types of online auctions and how they work.

First and foremost, MadBid is an online auction so you might think that this article is going to promote MadBid, but fear not friends. We are bargain hunters/ auction lovers/ hagglers/ thrill seekers that love debating the value of the latest gadgets. So let us share what we truly think about online auctions and where the biggest bargains can be found.

 “an online auction site might be a good alternative to a full-price replacement for your clapped out washing machine or fridge.” – The Guardian

There are 5 main types of online auctions.

Penny auctions are fast, thrilling and carry a certain amount of risk. People participate in penny auctions if they want to get the latest brand new products for insanely low prices. Sounds exciting? But wait. Even though penny auctions sell products at extremely low prices, it does cost money to participate. The typical penny auction will charge customers between 10p to 15p every time you click Bid in an auction. The problem with this is, there is only 1 winner and the other people that have paid to participate in the auction will lose out. MadBid was never a fan of this, but offering customers high quality products for a fraction of their cost was an opportunity not to be missed. It has taken over a year of research and development to ensure that customers who participate in auctions never lose out. If you participate in a MadBid auction and don’t win, use the money spent in the auction to buy whatever you want from the website, big or small. And you might think that there is a catch, but the products are all brand new and the major challenge the company faces now is to offer even bigger discounts on brand new products that customers simply want to buy. So while the average online auction discounts are 80%, have a look if you like anything from the Earned Discount shop so if you do not win an auction, you can still use the money spent bidding in the auction to buy anything from the Earned Discount shop. We call this gamified e-commerce.

Outlet auctions are great if you love your brands or want to make quite an expensive purchase. You can find outlet auctions on Ebay, by looking at the outlet section. Here you can find major stores like Argos offering electrical goods to buy out right. If you were looking to buy a washing machine or something of the sort, this is quite handy because you can get from 13% to 43% off the RRP. So although these deals are on an online auction website, most of the products have a fixed discount price that you can simply purchase, no need to Bid or check for timers. One word of caution, watch out for postage and shipping costs, most retailers offer free shipping if you buy a higher priced item, this is different in outlet auctions so just check before you buy.

Consumer to Consumer auctions are awesome! If you want something really quirky or original or really old, these are the auctions to look at first.  Although both Ebay and Ebid are consumer to consumer, our final choice was Ebid. Why? Well, if you type any keyword into Ebay, you will find anything and everything to do with the keyword. And the product results are so pumped with China made products which can leave frustrated bargain hunters who just want to find the perfect gems. Ebid on the other hand has a lot more of a personal feel, every product sold on the website feels like has a respected owner and has a story. The auction process is quite slow as many items are listed ‘run until sold’ which means they are simply products waiting to be bought. Auctions that do have time stamps are also quite lengthy, you could be waiting up to 4 days for a small item to close in auction. One thing to mention about Ebid is if you are looking to sell, this is probably a great platform to get started. Because Ebay is a go to place for online auctions, they can charge much higher seller fees, whereas Ebid has kept their seller fees quite consistent and reasonable. You can check Ebid’s seller fees before you start. Word of warning if you are a seller, make sure to monitor your auctions closely as there does not seem to be a lot of people visiting the Ebid site so you might make a loss on your product. A little tip for finding a bargain, watch the number of views an item has, if it’s not a lot chances are that not many people will bid on the product.  Although the website is quite outdated, a jumble auction feel is always welcome.

Making Money from Online Auctions.

Even-though MadBid does not allow for consumers to re-sell the products auctioned on the website, Consumer to Consumer auctions like Ebid and Ebay provide great opportunities to make money. We loved this American bargain hunter, watch his online auction haul video:

Speaking about Jumble auctions, we have noticed quite a few of these popping up online. This is great if you love going to auction houses and taking time to find antiques or little bargain treasures. Now this has been made a lot easier by websites like the-salesroom.com. The layout is really simple and you can view all the items up for auction, accompanied by a list of live auctions or upcoming auctions. This is great for lazy Sunday browsing.

Police Auctions might sound a bit weird, but apparently they are full of traders and youngsters trying to catch a bargain. It’s not your safe and tradition Ebid, but they do offer great prices.

‘If you are looking for a souped-up Mercedes with tinted windows and only a couple of bullet holes spoiling the paintwork, a police car auction is also a good bet. Your local force will tell you how it disposes of goods it has impounded. The Met, for instance, uses auction houses including British Car Auctions, Manheim Auctions and the West Oxfordshire Motor Auction.’  – The Guardian 

If you think we have missed anymore, please feel free to send us a comment and we will include it to the list. Also, have you ever found an amazing bargain using any of the auctions above?