We have all seen them. Those auctions that have a Buy It Now price of a penny for an eBook, wallpaper, screen saver, or some other digital product. So what’s the deal? Why would anyone waste their time, money, and energy creating auction listings for a penny?

Heck they are losing money (even if they do the “click here to get automatically pre-approved” button trick) on every sale. You can’t even make a profit by increasing the volume. It a losing deal right?

Well, maybe not…

If you look at just the price versus cost, yes, it’s a loser.

But there could be more to it.

I won’t talk about the feedback aspect that can be gained from these cheap auctions, as in many cases this is a violation of eBay’s policies. So, if you are only planning penny auctions for feedback, I wouldn’t waste my time. But there are a couple of real good reasons to list these items.

First is the product itself. You can make additional money from the product you are selling in your auction.

Like what?

Well, you can include affiliate links for other products, you can include links back to your website(s) for other higher priced products or services. You can even sell the “resell” rights to the product they just purchase in that very product.

So if you sell a penny book, lose twenty or thirty cents on the fees, but then make $20 or $30 selling a product referenced in the book, you come out way a head.

This is not the only benefit.

You can also use them to increase your mailing list. You can capture their email address when they download your product, or you can give them an opportunity to join your list from within the product they just purchased. Once they are added to your list you can notify of your other non-penny listings or other non-eBay offers you may have.

Just be sure you give them the option to opt-out and honor any requests to do so.

So in some cases you can see losing money on an auction can be a winning idea.