I've seen them work well. Pbrown does em all the time and he usually bets about 50-70 dollars per.
Though he offers full character colour regardless of how high it goes.

What I have seen is that you have a pretty awesome base sketch and you post it and you put a base price above the characters and then you post a comment underneath the picture saying "bid here for #1" "bid here for number 2" and so on and put a minimum bid increase, like $5 and people will post under each one. It can get really intense, especially for really pervy slots or really awesome pose slots. People will even pay more than a normal commission because they can see for themselves a basic outline of the pose and position of the characters and don;t have that what if feeling that whats in their head wont match to the art generated.