by Linsey Knerl

We all know about popular online auction sites like Ebay, for example, that allow you to place bids until the bidding period ends and then the highest bidder takes the goods. But have you heard of lowest-bid or “reverse” bidding auctions?  These allow the “lowest” bid to have the loot--something quite different, indeed. We’ll talk about whether these types of auctions are a good bargain in just a moment.

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If you’re relying on lowest-bid auctions to make a purchase you really need, you had better start planning months in advance – or just skip this type of shopping altogether.

What is a Lowest-Bid or Reverse-Bidding Auction?

More a game of chance than an actual auction, these types of auctions can look very similar to other auctions you may find online. Merchandise is up for grabs (let’s say an iPod, in this instance), and interested buyers each offer up their bid for what they want to pay for the item. Bids are secret, and though many can be placed at a time, no one sees what anyone else is bidding until the auction is over. Unlike typical auctions, in order to win the iPod, you’ll need to have the lowest bid, and it has to be unique--that is, no one else can have placed a bid at the same amount. Sounds great, right?  Well…. it’s not always so simple.

The Pros of Lowest-Bid Auctions

There are several advantages to these types of auctions, the most obvious being that you can score fabulous stuff for pennies on the dollar. I’ve seen a $100 gift card go for 20 cents and a popular gaming system sell for a few dollars. Obviously, the guys or gals who won those auctions are sitting pretty on their low-cost purchases! 

The Cons of Lowest-Bid Auctions

What could possibly go wrong with a lowest-bid auction?  They may not fit into your budget--at all. Some sites charge you per bid you place, making it a purchase you may not be able to afford--especially if you walk away without a win. In this respect, they can be a little more than a fancy way to gamble:  you place bids with your own money and aren’t guaranteed a thing in return.

In addition, it’s very hard to plan purchases using lowest-bid auctions. Have a birthday coming up?  Think it might be nice to get a great deal on that iPod we were talking about before?  You may have to wait awhile. With thousands of people placing bids from all over the world, your chances of actually winning the exact auction you bid on are pretty low. In other words, if you’re relying on lowest-bid auctions to make a purchase you really need, you had better start planning months in advance--or just skip this type of shopping altogether.

The Best Lowest-Bid Auction Sites

So, you’ve heard our tips and have decided that you want in the game of lowest-bid auctions--either you’ve been sold on the idea of really cheap stuff, or you just like the thrill of the game. There are some sites that have been around longer than others, and from what we’ve seen of them online, seem fairly reputable. (Note:  Just like regular auctions, it’s a buyer beware world. Get acquainted with the terms and conditions of any site before you bid, and know your available methods of recourse if you have problems getting your merchandise.)  Here are some of the top sites for lowest-bid action:

BassaBids – Unlike others, this site does not charge you per bid. Auctions are highly competitive, however, with winners from all over the world. One recent prize was an iPod Shuffle for 14 cents. BassaBids runs two types of auctions:  One with a time limit (it will accept as many bids as can fit within a certain number of days) and one with a bid limit (it will take only 3,000 bids, for example.)  Knowing what kind of auction you are participating in before you make that first bid will help you know your odds of winning.  (Some participants won’t want to bid in an unlimited bidding scenario, but rather spend their time placing bids in auctions with more concrete odds.)

Bid4Prizes – This site charges a fee for premium membership privileges (like text messaging options) but still lets users play for free. Open to U.S. residents 18+ only, your odds are a bit better at this site. You are only allowed 30 bids per day and can win a prize only once per 30 days.

Snagoo – Charging 75 cents per bid, this auction site lets you roll over money spent on auctions you didn’t win into special bidding credits towards future auctions. In this manner, you get to recycle your bids for certain types of auctions. New users get five free bids for signing up.

Quick and Dirty Tips for Lowest-Bid Auctions

Think you’re ready to play the lowest-bid game?  We have a few additional quick and dirty tips you may want to remember.

Proceed with caution. Like any auction or retail purchase, be mindful of what you have to spend. Since most of these sites make no guarantees that your money will get you anything back in return (and are using this fact to make their sites profitable), you may be risking more than it’s worth to continue entering for prizes you don’t win.

Understand the rules. Every site we checked out had a slight variation on the policies for bidding and claiming your prize. Unless you’ve worked with a site before, read all the terms and conditions (including the FAQ’s) very carefully before proceeding. Terms also change, so be sure to take refresher every now and then, as well.

Get out while you can. Even if you’ve invested an amount of money that exceeds what you’re comfortable with (and haven’t won), it’s still OK to walk away before you lose even more. Some bidders may spend hundreds or thousands of dollars in pursuit of a particular auction item with nothing to show for it. If you’re determined to get a particular item--regardless of cost--you should consider buying it outright from a retailer and avoid the risk of losing again and again.

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Know the value. Auction sites can inflate the value of an item to make it appear more valuable than it is. Do a bit of research to see if it’s possible to get a similar item from a store for significant savings. Sometimes the winning auctions will seem like a better deal than they really are.

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As always, you can send us your questions, comments, and tips to dealista@quickanddirtytips.com or call 206-426-1615. We’re also on Facebook under “The Dealista!”