How does a dollar auction work?

luck every bid cost money. every bidder pays, so the winner does get there item for that ridiculously low price, plus bid cost, and everybody else who payed there bid cost in a sense gambled and lost. the host of the auction actually makes there money on bids rather than the item. id personally stay out of them cause its gambling really. but i actually had a friend win a ps3 through i believe it was called bid now for like 50$, but lost a 100$ on other auctions before deciding that it wasnt worth it.