While searching for my new HDTV and doing my research online, I ran across an 'auction" site with a business model that ranges somewhere between scam and genius. It's a site called Swoopo. All items are put up for auctions by the site owner. You can't auction off your own stuff. 47" HDTVs (good ones) are going for as low as $70 (no, I did not drop any zeros). Some TVs have gone even lower. And it's a legitimate site.
But don't get too excited yet. The bidding model is unlike anything I've ever seen before. You don't get to bid the price you want for an item. You purchase 'bid packs'. Each bid costs you $0.60. Every time you bid, it increases the price of the item you're bidding on by either $0.01 or $0.12 (depending on the auction). It also adds between 10 and 20 seconds to the clock. And there's a built-in "bid butler" to automatically bid for you between 10 and 2 seconds from the clock running down (if you decide to use it; the bid butler is optional).
So take an example of a Sony Bravia KDL-40Z5100 40" HDTV that sells for $73.43 in a penny auction. Seems like a great deal. But to get to $73.43 there must have been 7343 bids. At $0.60 per bid, the auction site generates $4460.40. Even at the retail cost for that TV (about $1400), Swoop profits over $3000.
Assuming that there were 20 people bidding, and everyone bid about the same (and that's a big assumption), then the average person bid $223. So the actual cost to the winner is about $300. Which is a good deal. Unfortunately, 19 other people are now out $223 apiece. For auctions with only a few active bidders, you have to place correspondingly more bids. Which means you could have 3 or 4 people actively trying to get that TV, and 150 people all bidding occasionally trying to snipe (or swoop in this case) the final bid, so the active bidders could easily find themselves into the thousand dollar range for the number of bids made. At which point they're likely to drop out and some lucky first-time bidder happens to get in the final bid for $0.60 plus the final cost of the item.
For lightly contested items it's probably not a bad deal, but for the stuff people are really going to want (electronics, jewelry, etc.) I'd steer elsewhere. And if you do decide to try it, watch out when placing a bid butler. If you end up competing with another bid butler then they immediately duke it out to the maximum (you see this happening when instead of 15 seconds being added to the clock it resets to 10 minutes; that's 600 automatically placed bids, or $360) You can run out of bids in no time flat.