Quibids - The New Pet Rock
Quibids - The New Pet Rock
I recently came across an interesting online auction site called Quibids. QuiBids implements a new type of auctioning system being coined “Penny Auctions” that attracts thrifty consumers with the idea of super discounted consumer goods, such as a MacBook Pro for only \$24.60. They boast an average savings of 80% per auction. With such a high average discount you would be a fool to pass this opportunity up right?! Well not really.\ \ QuiBids charges \$0.60 for each “bid” that you can then use to place bids on ongoing auctions. A timer counts down from set intervals and a user must use their bid token to place a bid before the timer runs out. The last bidder wins. However, you still must buy the item at your winning cost, pay for shipping, and pay for a finance charge (conveniently not shown until you’ve already won the auction). You can spend a lot of money buying bids and using them to try and win an item. I watched and tracked a user bidding on a Slingbox SOLO and here is what i saw:\ \ During a 10 minute time frame user pmwdawgs21 bid 78 times. \ \ 78 * \$0.60 = \$46.80\ \ The auction ended at \$24.00. pmwdawgs21 did not win. \ \ \ \ Now pmwdawgs21 can still buy the item at retail price, minus the the costs of bids. A fair deal. Not if pmwdawgs21 was busy wasting their bids on other auctions though. If you concentrate your bidding on only one item that you know your going to buy no matter what, the system is appealing. However, if you’re just bidding on expensive items trying to capture that elusive “super deal” (like the site uses to lure you in) you will end up losing your money almost every time. Basically turning the auction site into a glorified casino. However, average users are idoits and will only do this. QuiBids even warns the beginning user of this (which I think is so f****ing awesome), and yet they know people will spends hours on end wasting money, trying to capture a \$24.60 Macbook Pro. All I can say is this…Genius.
Granted, QuiBids will lose money on some auctions, but the profit margin they will make on other high priced items more then makes up for this. Let’s take the amazingly marketed \$24.60 Macbook Pro (which of course probably happened when they had like 2 users, but still awesome) and compute the profit that QuiBids made. \ \ A auction on a Macbook Pro ended at the price of \$328.34. \ \ If each bid adds \$0.02 to the overall price then there were a total of (328.34/.02) = 16,417 bids. Each bid costs \$0.60, so (0.60 * 21,417) = \$9,850.\ \ Retail of Macbook Pro according to QuiBids, \$1,885.66.\ \ So, (9,850 - 1,885.66) = 7,964.34 + 328.34 (winner still had to pay) = \$8,292.68. So yeah…HOLY SHIT!
Some may argue that this business strategy may not be very ethical. I say those people are idiots. They are probably the ones who are bidding on the stupid high value items in the first place. QuiBids provides countless beginning bidder strategies, as well as, ways specifically not to bid. If the user chooses not to adhere to QuiBids advice; that’s their problem.
Hats off to you QuiBids. You have managed to create a socially engaging auction site that if used correctly, can actually deliver a fair deal. All while making a ridiculous profit margin.\ \ -Corey
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