Monday, February 7, 2011

Quibids

Some of you may have heard about the whole penny auction sites that are popping up left and right nowadays. Quibids being the most famous of them. I thought that I would just go on a rant about how brilliant they are, for the owners, not the users.

First of all, lets see the amazing deal:




So at first glance, it looks like we are getting a nice tv for $31.58. Lets look at that a little closer now.

Most of the bids on this site start at a single penny, and the every bid increases the price by a single penny. So then $31.58-$0.01=$31.57, which means there have been 3157 total bids on this item.

How much does each bid cost you ask? It must be a penny right? Cause it is a penny auction afterall.

Wrong, it is $0.60 per bid. Which makes our 3157 bids come out to a total of $1894.20. But we can't forget the shipping can we?


So we come to a grand total of $1924.19 spent on this item.

Well then, what is the retail value of the item in question?

Why its $1573.95 according to their website, which is about the cost you will find it on Amazon. Mind you, that is the retail price, we will be assuming a 40% markup. So really the cost they are paying for it is $944.37.

So in the end they are making a solid profit of $1924.19-$944.37= $979.82. They have over doubled their investment, with minimal work on their part. The sad thing is that this is not the end, even if you are religiously bidding to get that final price, there is a special feature you might have noticed in the picture.

It's called the bid-o-matic. Basically what it does is bid for you when the auction is nearing its end so that you don't lose it. Sounds like a great idea right? Well it is, just sadly not for you, but more so the owner of the site.  By giving the customers the ability to just let the server do the bidding for them, they maximize their profits will no effort at all. A lot of the people will think it is a great idea and utilize it, but all it does if two or more people are using it, is to increase the price and use up the customers bids.

You can kinda think of it as useful as playing Super Smash Brothers with your friends, but setting all your characters to cpu's and watching them fight....but all of you are losing money at the same time. You know what? That was a terrible analogy. 

In the time period that I have wrote up this post, the price has increased yet again.

That's another $4.89 technically, but really it means that another $293.40 has just gone into the pockets of the owners.

Next time you think about trying out a penny auction site, just do the math. Or create your own site and become a millionaire. Me, I'm too lazy.

6 comments:

  1. Wow I knew these penny auction sites were doing something shady.
    Thanks for the info.

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  2. Same here I always wondered the validity of these kinds of sights and now you've shown the light.

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  3. O.o I think ima make one of these. There making bank!

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  4. This is crazy, how is it legalll?

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  5. nice post! i was so close on actually checking these penny acutions out!its like no one in their right mind would sell something without making profit!

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  6. So that's how they do it! Those bastards.

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