There are many new-ish style auction sites popping up here and there, and I recall seeing many of them quite a few years ago and said to myself “holy shit, what a racket.”
These sites, Quibids (the most currently advertised one) et al are based on a pay-per-bid model. They advertise that you can score awesome stuff like iPads for super cheap $53. They advertise all sorts of awesome things.
Be warned. They charge you per-bid. Yep, that’s right. They only let you increment the bid by one penny and every time you do it you have to pay them 60 cents. In fact, you can’t even sign up for some of these sites without making a deposit for bids. Quibids requires you buy 100 bids for $60, plus applicable taxes here in Canada for a total of $67.80.
Here’s how it works: You click ‘bid’, the price goes up by a penny and the time in which the auction will complete gets extended by some arbitrary amount of time. It appears to be 15 seconds, but sometimes it’s more and sometimes it’s less.
Lets say for example I wanted to go after one of these super cheap iPads that they keep advertising. The price that they sell for seems to be all over the map. I found one that finished for $27.68 (see image). Now here’s the math: There were 2768 bids for this iPad. At $0.60 a pop, everybody involved in the auction paid for this thing, a total of approximately $1660. That’s more than double what an iPad actually costs. There were a lot of losers that paid into this purchase for the winner. I’ve also found some iPads that sold for much more. In fact the amount they advertise $53? Yeah, the auction site will take home almost $2500 profit on that sale.
Don’t get me wrong, it’s completely possible that the winner of this auction was lucky and really did only pay a little bit of money for it; but I doubt it. The voucher bids that it claims they used had to have come from somewhere. Either pre-paid or purchased in yet another auction. It’s a pretty hilarious circle. They actually have auctions for bids. So, you can drain 60 cents a bid for bids. It’s really sad and pathetic.
The worst thing is most of the people who do actually come away with this will ignore the bid-factor and actually think they got an iPad for $27.68. Quibids even makes sure they go out of their way to let you know and feel like you got a fan-fucking-tastic deal. I mean, just look at that picture. That guy SAVED $618.11! (sarcasm font, where are you?)
Needless to say, you really should avoid these sites. And any auction site that makes you pay-per-bid. The winners hardly win and the losers really lose.
So, for your benefit and my benefit of knowing I have intelligent friends, please stay away from these sites (or start one and cut me in. ;))