In this article, I will tell you about an original method of getting an iPad for almost free - or, under 5$.
Have you heard of Penny Auctions before? In Canada, the most popular penny auction is BidCactus. Some example items sold at this auction are:
If you win the auction, on top of what the item sells for, you also pay for each bid that you made. At BidCactus, each bid costs you 0.70 CAD. It could take you 1, 5, 10 or 15 bids to win the item. It is a game of luck, basically.
How do Penny Auctions Make Money?
Well, each bid costs around 0.70ct. So if the iPad gets sold in the auction for 10$, it means that 1000 people bid on it, so the auction collected 1000 x 0.70ct = 700$ for it. It is beneficial for the auction, since they make money on the difference of the price of the item and the collected money for it. In fact, it is also beneficial for the winner of the auction, because in the end, the winner didn't spend the full amount of 700$ on bids himself (there were many people bidding), so he might have only spent 0.70ct - bid only once. Then the iPad would have cost him 10$ plus 0.70ct for the bid. Even if he bid 10 times, he would have only spent 17$ total for this item.
The best deals are those, where the auction looses money on the prize. They can afford to do so, because they leverage the cash that they made from other items. When you get a deal like this, you can consider yourself very lucky. For example, look at the screenshot of this ended auction:
The PS3 sold for 2.09 CAD - that means there were 209 bidders. With 0.70ct per bid, the auction made 146 CAD on this item. The value of this prize is 469 CAD, so the auction took a loss of 323 CAD. Even if the winner Rover3537 was the only person bidding 209 times on this item, he would have spent only 146CAD on this PS3. Of course, he wasn't the only bidder, so he likely got an amazing deal on it. And imagine, if he only made one or two bids on this item - then he got the PS3 for $3.49 total!
Most of the time, auction will make around 10% on each item sold. Essentially it doesn't matter whether the auction makes money on the prize or not - the winner still gets a very good deal.
How to Bid Wisely
Be careful, and don't start bidding left and right. Watch it first. Observe what others are doing. It is actually very much fun to watch the penny auction, and you don't even have to be registered to watch it. Watch the bidding board for a little while, see which items are dead, and which ones are highly competitive. Aim for the less competitive item, and wait till it shows Going Once, Going Twice.. and only then click BID.
If you learn the tricks of the trade by observing & watching the auction closely, you will have a good chance to win items for a very low price.
p.s. Here are a few of their banners, that I found online. Clicking on them will bring you to BidCactus page, where you can watch people make bids and check at what prices things get sold for.