For building a penny auction website? Seems like it's only profitable if you have lots of people bidding. Otherwise, you lose your ass. How would you generate immediate traffic?
One of the downsides of the Internet is that it allows like-minded people to form communities, and sometimes those communities are stupid.
Pretty simple actually. Advertise on craigslist and other such sites. Develop multiple websites. Each one will cater to one or two speciality groups. Set an absolute price limit. Give some bids back to a few people that didn't get the merchandise. Give some free bids for friend referral.
