My point is: the structure itself makes it unnecessary for there to be any kind of bots, insider bidding, or cheating. It’s actually kind of genius in that sense: it’s just exploiting people’s natural desires to win something for nearly nothing, to score a deal, to ignore the fine print, etc. It doesn’t require illegality or cheating in order to make a mint. But just because they aren’t actually cheating doesn’t mean that what they are doing is good, or wise for the bidders. There’s a lot of things that are perfectly legal and legitimate that nevertheless depend on exploiting peoples’ weaknesses to varying degrees. This happens to be a particularly egregious example of profiting from a variety of human weaknesses.
I, personally, don’t think that QuiBids is illegal, but I realize that some part of their operating parameters may technically be so in some states.
I don’t think it is a scam, either, or truly misleading. It’s just that if you don’t read the information they glady provide on their website, and don’t iunderstand how it can work for you AND against you, you might feel taken advantage of.
Sure, I see that they often quote the example of a guy who won a new LCD HDTV for a few bucks, and some people may think thay anyone can do that at almost any time on the auctions, but that is bad thinking on their part. Nothing in the advertising says you WILL be able to get that kind of deal, but SOMEONE did, and you MAY also.
Okay, where they make all their money is that you have to BUY bids at $0.60 each. Unlike eBay, you don’t get to bid for free.
HOWEVER, you can also bid on bids. All day long there are auctions where you can bid on a block of 25, 50, 100, 250 bids, and if you play the auction right, you can easily get the win for less cost than the bids you have won.
This explains how some of the bidders will bid huge amounts of bids on an item that is worth less than the apparent cost of their bids.
How much the auction ends at is relatively unimportant. The true cost to the bidder is how many bids they place, and whether they win.
If you lose, then all the money you spent on the bids is gone.
Sorta.
There is a Buy It Now option that allows you to “recoop” you wasted bids.
If the item is listed as retailing for $100, and you use $50 worth of bids to try and get it, and fail, for up to 2-hours after the auction end, you can pay the difference - $50 - and get the item at full listed retail price.
So, you have a chance to get your money back - you just won’t be getting that “great deal” like you had originally hoped for.
Oh, and you could probably find the same item cheaper at a dozen other places than Quibids listed retail price, but they do give you an option to get your bid money back - in a way.
You aren’t going to just go into QuiBids and start getting tremendous deals very easily. You have to watch and play smart.
I saw an auction for a $25 Outback Gift Card that was bid up to about $5.50. That was 550 one-cent bids that cost (basically) $0.60 each, so there was $330 made on that $25 gift card. I watched the auction and saw the same names bidding over and over again. This was a typical bidding frenzy like I used to see on eBay years ago. I am sure that all those bidders spent more in bids than the card was worth.
But there was a catch, or should I say, incentive. The auction also included 20 bids as part of the deal. Twenty extra bids, worth $0.60 each. The bidders were going crazy on the auction partly because they figured, if they won, that 20 of their bids would be covered by the auction.
Maybe. But with several people placing 550 bids, I think it likely that many people bid more for the card than it was ultimately worth.
BUT, there was an identical auction going on at the same time where the bidding got up to about $0.37, so the bidders in that auction only placed maybe 4-5 bids each, so the winner got a good deal.
You have to pick your auctions carefully and walk away from the ones with bidding frenzy.
Some people complain about the fact that the auctions, initially, have a set ending time, but if bids continue to come in, then the end time is reset with each new bid by 20, 15, or 10 seconds, depending on the auction and action. No last second sniping here.
This is something that a lot of people wanted installed on eBay auctions, just to cut down on the effectiveness of sniping and allowing more bidding on items.
If you understand how the QuiBids end timing works, it is still best to only bid at the last second - it just doesn’t promise a winning bid.
I don’t see these situations as illegal, but the carrot-dangling is well done by the auction site.
It is fairly easy to win Gift Cards at a great price, and there are some other good deals to be had on lower priced items, but if you want that big LCD TV, you will have to work at it.
I watched an auction the other night for a 32" LCD HDTV because a buddy of mine was looking for one and wondered about using Quibids after seeing a commercial on TV.
The auction ended at $6.54.
Of course, that is 654 bids at $0.60 each for a total of $3924.00, all for a TV listed as being worth $799.99.
I am sure some people in the auction started bidding early and burned through their bids quickly. Certainly, the profit on the auction was fantastic. Illegally or immorally high profit - maybe?
But if someone did research on past items, which Quibids lets you do, and you see what that exact same item sold for before - you could enter the auction at a point just under where they usually sell at, do you bidding carefully, cover about a 100 bid spread with your $60 worth of bids, and you stand a good chance of winning that auction. If it ends up closing earlier, or the bidding seems to be going crazy, there will be another auction on the same item in a few hours.
I think the basic idea behind QuiBids is genius. It may be set up to take advantage of people who don’t research a bit, and who are prone to get in a bidding war over a particular auction, but I don’t see a real problem with QuiBids for it. Anybody who thinks they can just join up and immediately win an auction for a high dollar item for only pennys, will be taken advantage of by all sorts of things in their lives.
Then you either haven’t read or haven’t understood the earlier posts in this thread. There is no winning strategy for the bidders, only less bad ones. Here is another thread about them.
Oh, I read them.
It is an auction, in one sense of the word, so there are no guaranty to win, but there are strategies that can help you win and increase your chances, just like with other auction sites.
I don’t see that they hide any important information about how their auctions work, and I could see the bad points about it, so I don’t think it is much of a scam.
The profit they make from the auctions, and the various incentives they have set up to get people to bid and buy bids is insanely clever, but I don’t know if there is anything illegal about them.
Sorry, you do not understand, there are no winning strategies, as each bid increases the auction time. The site you mention provides an automated bidding process, which places bids at the server side. It’s this combination that kills any strategy. Also, the auction site can manipulate the number of auctions, to ensure there is enough competition on each auction (on average) to ensure obscene profits. The penny auction sites are exploiting people’s ignorance to sell items at multiple of their retail price (total paid by all bidders, not the auction winner). They don’t even have to hold any stock, they can simply order the items on demand once the auctions expire.
Here is an article which explains how unethical the business model is, and here is a technical account of an attempt to game an auction site.
This is probably the best answer. I know a little bit about banks and banking laws, I’ve dealt with a lot of bankers believe me. Banks look out for money laundering like the plague, and online gambling where it’s illegal, but only because they could recieve heavy fines and even get severe criminal charges, they’re not looking out for you and me, that’s for sure.
Freddie and Fannie only get revised if there’s a need, one of the latest things has been a ‘clear and conspicuous’ disclosure clause that tells mortgage and finance companies they must read the fine print slowly in commercials to give the people a better chance of shopping around for low rates and stuff. Banks are under so many thumbs they can’t even see straight, it’ll most likely be several years before laws against online bidding start being written in, mostly cause they’re still trying to get everyone squared away with the new sets of laws that fly in all the time.
To me, bank employees are some of the most lazy scum of the earth, they sit around passing memos back and forth (watch Office Space, this is a very mild version of what is happening, it’s much worse in real life) and then basically the next day after everyone’s been told what not to do, they all do that very thing, like everyone forgot (that’s not always the case but it’s happened, I’m just being over dramatic here). So it will be a long time IMO before anything is done about online bidding, there are so many loop holes they’ve jumped through merely by having an actual product to give people, there’s no way anyone will veiw it as gambling, and the lawyers (a bankers best friend) will make sure of it, trust me. 
[/digression]
I must protest! First, it’s $50 for a basic Costco’s membership. Second, it works if you crunch the numbers before joining. Costco’s works for our household, Sam’s doesn’t–even though my husband has a business membership with them. Third, Sam’s and Costco’s inventories are not limited to their physical stores. They have additional products available through their online catalog. As always, YMMV. (I’m not a shill, I swear! :D)[/digression]
It is not an auction. In an auction only the person who wins pays any money, and the person who pays money always gets the item in return. These sites offer a form of lottery – an unregulated lottery with near impossible odds. At least when people throw away money on a powerball ticket there is the chance (infinitesimally small) that the payout is large enough to excuse one’s foolishness for gambling in such a high-risk game. With these sites people are throwing away mounds of money for cheap plastic electronics with short lives of operation.
Alka Seltzer and Speak to me Maddie!, I do not disagree with your basic distaste for the QuiBid system, but …
Sorry, you do not understand, there are no winning strategies, as each bid increases the auction time.
True. But at a regular auction, doesn’t it continue as long as bids are coming in?
There are no true “winning strategies”, as you say. Even at a real auction, you have no idea how high people will bid against you. I’m just saying that there are ways of bidding that can cut down on how many bids you may have to make to win.
Originally Posted by stanger
It is an auction. . .
It is not an auction. In an auction only the person who wins pays any money, and the person who pays money always gets the item in return.
What I said was “It is an auction, in one sense of the word, so there are no guaranty to win”, and I think it more closely resembles an auction than a lottery. At least in an auction, a third party doesn’t announce the winner from a pool of everyone who placed a bid.
And though I have never attended a formal auction myself, I have heard that there are auctions where the bidders must pay a fee in order to participate in the auction, which is not totally unlike the QuiBid bidders who must pay for their bids in advance. The bidder at an auction that pays an entry fee pays money even though they may never place or win a bid.
The difference is that in an auction, losing bidders are not expected to pay. In the example in the first article I linked to, a winner won an iPod Touch for $187, about $45 dollars below retail. The site sold that item for $1,125 when you consider all bids.
Going back to your original post, I see you do understand the mathematics of how much profit they are making, but your post contains a number of other errors.
No, it’s a license to print money. Bear in mind, the true economic value of each bid is far less than the $0.60 you pay for it, as the site can manipulate how much profit it makes on an average bid. $100 worth of bids does not win you anywhere near $100 of items on average. The more people that win blocks of bids, the more each bid becomes devalued. People can’t cash them in directly, they can only use them to bid on items. The more bids in circulation, the more people will bid, and the greater the site’s profits. They can manipulate the number of auctions on offer against the number of bids in circulation, determining their average mark-up on items. They have created a micro-economy, which they are in almost total control of.
That’s a new one on me, all they are doing is providing people with the illusion of a safety net. As you say, the difference between the retail price and other sites is likely to be considerable, so their profit margin is protected. The two hour clause ensures only a fraction of the bidders will have a chance of taking this option. It proves that they are making much higher profits than retail, otherwise it would make sense for them to offer this deal to every customer.
I’m going to keep repeating this - there are no winning strategies. The strategy that loses you the most money is to bid on auctions that still have time left to run. These are effectively wasted bids. The best strategy is to try to snipe auctions where the item value is still well below retail. But that is exactly what everyone else is trying to do. You have no way of telling if your targeted auction will develop into a bidding war or not. Worse still, you are up against server-side automated bidding, which ensures that the auction will be extended until all automated bids have been used up.
The only smart move is not to play. It’s unregulated gambling, with some nasty twists. For example, when playing poker, any errors other players make in strategy work in your favour. The reverse is true with the penny auction sites, any mistakes made are to the detriment to the other players, as they push up the item prices. With regulated gambling, a high percentage of the stakes is returned to the gamblers (something like 95% for horse racing). The return for the penny auction sites is unknown, but I’d be unsurprised if it was under 25%.
The only way to win consistently at such a site is if a majority of its population worked in concert to keep the auction prices low. Good luck organising that. The site would respond by reducing the number of auctions, so there wouldn’t be a lot of bargains on offer, and would quickly close once it stopped being profitable.
I believe quibids is a lottery system, and there are laws against advertising, and marketting lotteries in any form, in the marketplace. (USA, AUSTRALIA, etc)
The “pay for bids” or “penny auctions” should be filtered off the internet as lotteries.
Now, saw you wanted to run a lottery. Then just disguise it as a pay for bids auction.
its really a pay for tickets lottery, but just call it a pay for bids auction.
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In the US, everything is legal by default until it becomes illegal.
So until someone writes a law banning sites like this, they’re legal. I definitely agree that they shouldn’t be legal, or at least should be highly regulated. But there you go.
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I think the “redeeming” factor is that you can apply the cash you paid to bid towards purchasing the item at retail from Q-Bid (“redeeming” in a loose sense, because there is likely a mark up). The bottom line is that you had better be expecting to buy the item at retail, and Q-Bid is a “lottery” to maybe pay less than the retail amount.