I tried the Gozila.co.uk penny auction site recently and I asked for a refund.

I tried to get a PS3. And after 2 hours of bidding and lagging it shew the winner (not me).

I think ebay is better that penny auctions.

Teddy

I think for us we have a fundamental problem with with two things. The first is the payment for bidding. The second is the subsidy of winners by the losers.

Whilst the first cleverly subsidizes the purchases of the lots through the actions of the losing bidders, it also skews the market and also brings in to question the transparency of the site. One of the exciting things about the internet is the ability to be able to create open, online marketplaces where buyers and sellers interact and eventually agree a sale price for an item. By charging for bidding this is fundamentally broken.

The more important aspect of this though, is the skill and chance involved in the process. By charging people to bid you are forcing people to invest in bidding further. The more people bid the more the sense of urgency increases to win the items. It’s an ever decreasing circle. Whilst this creates a cash cow for the site owner, it does not necessarily give the bidder a bargain sale at all.

If these sites were promote themselves as gambling or gaming sites then it would be a different proposition. The users would understand upfront that they stand to lose money. They would also understand they are not on an eCommerce site. For us the user experience is important. We cannot be seen to skew the user experience in this way as it would have an impact on the work we do for other auction clients.

We have taken the decision democratically within the company that we do not wish to get involved in these types of sites and see more benefit in the creation of real marketplaces for companies interested in creating transparent trading environments.

I think most penny auction bidders enjoy the whole experience and have fun throughout the bidding process, but of course need to win sometimes to keep it fun. It is not for everyone, but bargains are definitely to be had if you know what the rules are and use a good strategy.