Friday, March 25, 2011

GetInToo Review: Review of Unique Bid Auction

This is my GetInToo review.

I did an interview with Greg Walding, the president and co-founder of GetInToo that might also be helpful. However, in this GetInToo review, I discuss everything you need to know about this site. It still falls in the 'Entertainment Shopping' category, but GetInToo is not a penny auction. Here I describe the auction model and the website.

GetInToo is a Unique Bid Auction

GetInToo is NOT a penny auction. It is actually a Unique Bid Auction where everyone places a bid. The winner is not the one who places the highest bid, as is the case in eBay. Here, the winner is the one who places the lowest unique bid.

For you to be the winner, you need to get two things:
  • The amount you bid must be unique. You might be tempted to bid 1 cent but there could be many like you who bid 1 cent. If this is the case, you will not win the auction.
  • The amount you bid must be the lowest among all unique bids. This means you might be tempted to bid $58.47 for an auction hoping that it is unique, but there would, in all likelihood, someone who bids a lower amount which is unique.
GetInToo Differs from Traditional Auctions
At GetInToo, everyone places a bid for the products that they like. However, it is quite different from sites like eBay that seemingly work on the same principle. At GetInToo, there are two main differences compared to a site like eBay:
  • It is a Bidding Fee auction model. This means that you need to pay for every bid. However, GetInToo has a unique feature that refunds you bids that did not win a product! I will discuss this in length later.
  • The lowest unique bid and not the highest bid is the winning bid. At eBay, the person who bids the maximum is the winner and he pays the winning bid amount. At GetInToo, the winner is the one with the lowest unique bid and he pays this amount. The bidding amount is usually very low compared to the retail price.
The downside is that you have to pay for the bids. The upside is, you can get items really cheap with low risk.

GetInToo Differs from Penny Auctions
Even though GetInToo falls under the 'Entertainment Shopping' category, it is quite different from a traditional penny auction like Quibids.

The first immediate difference you will notice is that items close by the number of bids rather than the clock. This forms a much more sustainable model than penny auctions. The reason is simple - GetInToo doesn't make a profit of $5000 on one auction and a loss of $1000 in another. It has a steady profit margin for every auction. This is also good because you don't need to sit in front of your computer for hours together on auctions.

Then, there is a very unique feature at GetInToo that you get your lost bids refunded. More on that in the next section below.

GetInToo Refunds Lost Bids!
This is perhaps the most unique feature of GetInToo that no penny auction can ever hope to achieve. At GetInToo, you purchase the bids and place the bids on the auctions the usual way. Then, if you are not the winner, the site refunds you all the bids that you used on the losing auction as voucher bids. You keep getting voucher bids until you win. This means you can invest once in the site and keep trying again and again, bidding on different auctions, till you are the winner.

Risk Analysis of GetInToo
Compared to big penny auctions like Quibids, GetInToo seems to carry a lower risk. One main reason for the lower risk is the bid refund as discussed above. Also, the cost of bidding is limited, as opposed to penny auctions. For example, a penny auction can make a killing on a big-ticket item at the expense of the bidders. This scenario is impossible at GetInToo because the auctioneer, the site in this case, can only make a fixed % on every auction.

At GetInToo, the Final Price is very Limited
Just like penny auctions, GetInToo makes money through the bids and not through the selling price of the items sold. However, at penny auctions, items can still sell for a huge amount of money and it is not uncommon to see auctions ending at over $200. This is a possible but unlikely scenario at GetInToo. For an auction to end at $200, there should be a minimum of 20,000 bids placed, of which 225 need to be real bids and 19,775 virtual bids! This is very unlikely. You can expect the lowest unique bid to be within $10 for almost every auction at least for now.

Too many Voucher Bids might be a Future Problem
Though it isn't much now, the number of voucher bids can go out of control because for every auction there is a single winner and multiple losers. Even now, if you visit the site, you can see many more virtual bids than real bids. There are several ways to counter this in the future. However, as a bidder looking for the best deals, I would suggest joining the site as soon as possible so you don't have to deal with an increasing number of virtual bids.

GetInToo Founders have Experience
You can read from my interview with Greg Walding that both he and his partner Richard Hull have entrepreneurial experience. This goes a long way in lending credibility to the site and business model. This means they are in for the long stay and not pack their bags overnight. This is an important aspect when you want to look for future sustainability of the site and want to invest your time and money in it. Too many penny auctions disappear overnight, so it is good to know GetInToo is not one of them.

Check out GetInToo

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