Monday, April 30, 2012

Largest Penny Auction Site

What is the largest penny auction site? A lot of bidders wonder about this. The answer is Quibids. It is actually by far the largest penny auction in the world. It has always been at the forefront of penny auctions, even though initially Quibids did not identify itself as a penny auction.

As an industry veteran, I am impressed by how Quibids survived and thrived as plenty of new penny auctions came and went bust. Even as other penny auctions were dying, Quibids was building a mark for itself. It has a nice, slow and steady progress growth.

What's also impressive is that the growth of new bidders has slowed at almost every site except Quibids. It still attracts a good amount of traffic every single day. You can look at the Alexa rank of Quibids and you will know just how impressive it has been all the while. No other single penny auction even comes close to being the industry heavyweight. I think Quibids does some things just right, e.g. Buy Now on all the auctions from a very long time, so it couldn't be criticized as gambling.

That being said, the obvious drawback is everyone knows about Quibids! This means increased competition because there are not enough products for everyone to bid on. This of course works against bidders. Worse, Quibids separates bidders as new, experienced, etc. and the more winnings you have, the harder your competition gets.

So which penny auctions do you bid on? 

Sunday, April 29, 2012

PennyGrab Gets A for Awesome!

PennyGrab has officially gotten the accreditation of A from BBB. It is one of the few penny auctions to ever achieve this. A rating is the highest rating given by BBB. It is a significant achievement from PennyGrab, congratulations to Al!

Visit PennyGrab

Thursday, April 26, 2012

BidRivals Closes: BidRivals Scam

BidRivals shut down today. They deleted their Facebook page and all the posts, the site is "temporarily unavailable" and they sent out an email to all the affiliates to "pause" their promotions. This means they are not coming back. They are large enough that I don't think they will come back with some new owners or some other penny auction bailing them out. Too sad.

Whether BidRivals turns scam is something we have to wait and see. Before the site was shut down, there were Facebook complaints from people who never received their winning items. Some additional details are provided here.

BidRivals was one of the largest penny auctions about a couple of years ago, almost rivaling Quibids. And they were definitely more global than Quibids then, covering the whole of Europe. I think they made a mistake too many. I hope the bidders get their winnings and get a refund for the bid packs they purchased from PayPal or their Credit Card. Take action fast if you are one of the affected.

Were you a member of BidRivals? Did you buy bids there? What do you think about this?

Updates: Thanks to Amanda for the link below. According to PennyAuctionWatch, BidRivals is in liquidation. Some bidders might be reminded of the terrible days when Swoopoo, the first penny auction, closed doors in a similar secretive fashion scamming and owing bidders money, won products and trust. 

Beware a Scam Text Campaign that is NOT from Quibids

Quibids is becoming so popular that scammers are beginning to get excited! I just came to know from the PR manager of Quibids, Jill, that there is a scam text campaign out there apparently offering some $1K in Best Buy gift cards. Obviously this isn't from Quibids. Bidders beware. 

It looks like the campaign used a website to confuse users - they use qulblds ... now if that looks similar to quibids, look closely - the i's are l's! So this scam site is quLbLds - not quibids. Be on the lookout. 

It is interesting to note that this is without any incentive from Quibids. I have seen some unethical sites that promote penny auctions as "guaranteed wins", "free gift cards" etc. but this is usually to scam people and make money promoting a site. I know BidRivals had a huge problem with this in the past. However, Quibids doesn't really give you money to promote them (well, yea, those 25 free bids aren't really incentive enough to scam). This new scam is just to try to divert users from Quibids and scam them and has nothing to do with Quibids. 

I suppose that't the price you pay for popularity. Being a niche like penny auctions doesn't help either I am sure, because consumers sure find a trust deficit, considering how many have turned out scams in the past. 

Remember the golden rule - if it sounds too good to be true, it probably is. If you ever want to know whether something is genuinely from Quibids, check the URL really well or just enter quibids in your browser window instead of clicking on links. These things can sometimes be hard to find. 

Did you get this message too? 

Wednesday, April 25, 2012

Quibids Daily Deals: A Step Forward

Quibids daily deals are here! Today, Quibids announced in a blog post that they are starting Quibids daily deals. This is definitely a step in the right direction. I am personally quite excited about this development and what it might mean for the business as a whole. Quibids has never really identified itself as a penny auction and even in a Quibids interview with Jill, she suggested how Quibids is much more than a penny auction.

I think the idea of daily deals is good for Quibids on several counts -

  • It helps attract a new class of consumers who don't care about penny auctions but like such daily deals that help them save money without any element of chance. May be, they will also give the penny auctions a try. 
  • It helps Quibids diversify away from the main penny auction model. The industry as a whole is on a decline and I can think of only Quibids which is actually growing currently (not considering the new penny auctions of course, there are several promising penny auctions today but it is hard to predict the future in this industry). By entering the daily deals market, it can keep revenues up. 
  • Quibids can leverage its power from penny auctions to get great bargains from companies. I don't know if this will become the next Woot - probably not, but if it can offer deals that even a site like Woot cannot, then we will have a real winner. Sites like woot can leverage their huge customer base but a site like Quibids can leverage its already existing auctions, which can be the same product being offered in the daily deals section. 
  • It brings something new to the site. I don't know of any other penny auction doing this, which isn't too surprising considering Quibids usually leads the way in sustainable innovation in this industry. It keeps the bidders hooked on the site longer. 
  • It provides something that bidders can share with friends. I think this is actually a very important point from the point of view of Quibids and I am not sure how much of importance they think this commands. The way I see it, there are almost no penny auctions that people would want to share with the entire world, on their Facebook with friends or on Twitter with their followers. The very simple reason for this is that people can lose money on Quibids especially if they are foolish and no one likes promoting a site where a friend can do that. However, the introduction of Daily Deals changes that completely. Now people can genuinely share a deal with friends and introduce them to the website. If the friend pokes around a bit more, they will discover the penny auctions and might join if they want to. 
Of course a big factor to remember is that Quibids is the largest penny auction out there it can take chances. I would hate for it to take foolish risks with its money and market share, but things that blend into the overall theme and premise of the site - entertainment shopping - are fine by me. We have to wait and see how successful this section can get. Introducing a more social element might be a good start. 

One good way to really take this off the ground is to offer unbelievable discounts that people cannot help but promote. You know, the ridiculously good deals (say a $100 Amazon card for $50, I don't know! But you get the idea). This section has the potential to stand on its own and is definitely promising if done right. 

Tuesday, April 24, 2012

Quibids Interview with Jill Farrand

This is my Quibids interview with Jill Farrand, the PR director at Quibids. It is really nice to hear these thoughts from someone inside this successful business. She has some interesting things to share and I hope you enjoy the read. For the rare few who don't already know, Quibids is the largest penny auction in the US and fast expanding into other countries.

Sid: I remember about 18-24 months ago, there were quite a few promising penny auctions, some almost rivaling Quibids. Today, Quibids seems to be head and shoulders above all other penny auctions. What's the secret?
Jill: Currently, QuiBids holds about 80% of the market share in our space. There’s really no secret but that we continue to look for ways to enhance the customer’s entertainment shopping experience. We do this by implementing new site features and updates, i.e. the implementation of Badges and Games last year. There’s much more to come in the following months/years as well!

Sid: Where do you see the future of penny auctions in general, considering consumers were bit by a scam too many in the last few years?
Jill: It’s unfortunate that some “bad apples” fell into the mix in this exciting industry. In early 2011, we positioned QuiBids as an entertainment retail auction site. Our base model derived from the penny auction model but we knew we were going to take it further by the start. In the beginning, we implemented the Buy Now on 100% of our auctions. This assures our customers that no one ever has to walk away empty handed. Further, with implementing gamification into the model, we started to mold our auctions into a hybrid of traditional auctions with those gaming elements. Additional site features like QLive, QBar, user avatars, etc. is what also adds to the entertainment aspect of the model. Mentioned earlier, Badges and Games are a big part of our model that we will also continue to develop. Besides consumers coming to our site to look for a particular deal on a product, we want them to come to our site just when they want to shop in general. And when they arrive at our site, we hope their shopping experience is that much more fun!

Sid: Do you think the FTC should impose any regulations on the penny auction industry?
Jill: No, I do not believe there is a need to since most of the “bad apples” have been shut down and filtered through.

Sid: Any comments on the class action lawsuit against Quibids alleging that it is akin to gambling?
Jill: We feel there is no merit to it and hope for a quick resolution.

Sid: Quibids follows the traditional timer model. I see a few sites in the Entertainment Auctions industry that do away with the timer (reserve price or hidden-bid model being the most popular where the person who uncovers a hidden bid value wins or the lowest unique bid auction model). Do you see any merit to these auction models? Do you think Quibids might introduce any of these in the future?
Jill: I think it’s great to offer different auction formats to keep things new, exciting and fresh. We definitely have some plans for new auction formats in the future. Stay tuned…

Sid: Do you have any statistics as to how many auctions are profitable for Quibids, considering you have a Buy It Now for all auctions?
Jill: We lose on over half of our auctions. Our model definitely keeps us busy and working hard to make it a great experience for our customers.

Sid: What's the average auction count on Quibids?
Jill: We have some 10,000+ auctions a day.

Sid: The bidder community at Quibids still seems rather niche. Do you think it can go really mainstream and become a legitimate shopping option for a majority of consumers?
Jill: We certainly hope so and plan for it to be!

Sid: What's a normal day like at Quibids for you?
Jill: For me (PR), it’s checking up on our daily/monthly promotions, communication with our customers, taking any/all media inquiries, organizing community efforts and sponsorships, solidifying business and community partnerships, working across multiple departments internally, writing editorial content for multiple platforms, reputation management, etc. However, ask another employee and they’ll tell you something completely different! Each day brings something different and makes it a very exciting company to work for!

Sid: How big is the team at Quibids?
Jill: Currently, we’re around 150 employees and going strong.

Sid: I see you recently launched global auctions. Which countries are you looking to expand into?
Jill: Yes, we launched those Tuesday, April 24! Global Auctions are currently available in the United States, Canadian and Australian markets. The United Kingdom should be next on the list to offer Global Auctions. Regarding additional countries we’ll enter later this year, more than likely it’ll be across Europe.

Sid: Any new and exciting features bidders can expect in the coming days after games, a new blog and global auctions?
Jill: Yes, QuiBids Deals! Those are launching (in Beta) this Thursday! We hope our customers will take advantage of these deals. There will be a limited quantity on a select number of items and there will definitely be some great deals to be had!

What are your thoughts on this?

Sunday, April 22, 2012

Silver Coins at PennyGrab

Silver has dropped from its peak about a year ago, but silver still remains higher than the prices seen in the last decade. It is still about $32/oz. This is a good price not just for silver but also for collecting silver coins. Physical silver, after all, trades at a premium to paper silver which trades at spot price. Precious metals in general can be a good hedge against inflation and help diversify a portfolio of stocks and cash.

It is interesting to see PennyGrab having so many open silver auctions. To win, you just need to hit a price between $0 and $2.50 - that's all! This is the case for all silver coins at PennyGrab (at least the 1oz ones). This doesn't seem like a bad deal at all. In addition, every bid placed reduces the Buy Now price of the coin as well, so even if you don't end up bidding, it is worth checking out the silver coin auctions - you might be able to buy at a price below retail. (This is true for all auctions there).

All the auctions below are currently live.

Register here to get 5 free bids to start off. I like collecting enough bids, so you can be guaranteed a win when you bid on the item.

Saturday, April 21, 2012

Quibids Global Auctions: Blessing or Curse?

Quibids is finally going global! Today, Quibids announced in their blog post that from now on, you will have the option to compete with people from all over the world instead of just from within your country. And, the tone of the article suggests that you, as a bidder, should be excited and elated! Should you really?

Global penny auctions are not new and Quibids is certainly not the only one to enter that territory. The most notable global penny auction I can think of is BidRivals which is on a steady decline since its heyday. So now, Quibids is going global and asking us to be enthusiastic about it, but is it good?

The Pros

Yes, there are certain pros as Quibids points out and as I know from my own experience with penny auctions for over 2 years now.

  • Better auction selection: Yes, one culture influences the other and usually when penny auctions go global, they have a better selection of items that bidders can bid on. Variety of course is a good thing to have on penny auctions but you shouldn't let it overwhelm you. For example, it is usually a terrible idea to bid on jewelry on penny auctions because you end up overpaying in most cases. 
  • Good for bidders in non-US Countries: Quibids is primarily based in the US and it is not going to change for a while at least. This means bidders in Canada, UK and other countries see fewer auctions. For these bidders, global auctions are good because they now have a wider selection of products to choose from. 
  • More products throughout the day: This is another very important aspect of global penny auctions that there are a good selection of auctions to choose from. Right now, from a US time perspective, there are good and bad times to bid on Quibids. Now the equation is going to be more complicated because you have people from different time zones and when it is optimal time for them to bid, it is not the US consumers. This will mean more auctions throughout the day. Right now, at night in the US, Quibids drastically decreases the number of auctions and the night owls among us aren't too happy. hopefully this will change soon. 

The Cons

Well it is not all smooth sailing in global penny auctions. Here are some of the cons of this new development that Quibids bidders should be aware of - 
  • Increased Competition: Yes, this is one of the most fundamental problems with global penny auctions. At the peak hours, you will have to compete with people from across the globe. Also, even though Quibids has huge amounts of data about when bidders place, they are notorious for not scaling up the number of auctions when demand is high, like during weekends. Is this worse for US bidders? We'll have to wait and see. 
  • Harder to form a Strategy: When penny auctions go global, you can no longer rely on single time zone information to determine what the best time for bidding is. True, strategies like the Volunteer's Dilemma hold no matter what but timing can be everything too. 
These of course are major drawbacks for Quibids bidders. By the way, not all auctions are global for now. You will find a small globe symbol which tells you that the auction is for global audience. I am not too sure how wise it would be to bid on these auctions specifically unless you really like the product. 

What do you think about this latest Quibids development?
Update: Matt, the head Quibids blogger wrote to me saying that my article initially suggested that it would be mandatory for bidders to bid globally but that is not true. I was aware of this but probably didn't write it in the best way. Just to clarify, there will be a few auctions which are global and you can either bid on those or not. The rest are just regular auctions where you bid against people from your own country. If bidding globally excites you, you should bid on these. Otherwise, just stick with regular ones. Of course, you should identify these - look for a symbol of a globe beside the auction. I already mentioned this in the last paragraph. Thanks Matt! 

Sunday, April 15, 2012

PennyGrab Leads Reserve Price Auctions

PennyGrab leads the reserve price auction market of penny auctions. For those who don't know about reserve price auctions, it is essentially a kind of penny auction (pay-per-bid auction) where every item has a price that is randomized to be between two limits. Bidders bid on the product and the one who uncovers this reserve or hidden price is the winner.

Many penny auction bidders find this to be a better model than traditional penny auctions mainly because they have more control over their winnings. Also, bidders don't have to worry about the timer and stay in front of their computer all day. This provides all the excitement of regular penny auctions as well.

PennyGrab has been different from the very beginning from other penny auctions. For example, while the entire industry is paranoid about bidders colluding, PennyGrab goes out of their way to encourage bidders to communicate with each other. They thus have a much more loyal bidding base and people appreciate these gestures. Also, PennyGrab has been innovating quite a lot in the sphere like group grabs and rapid fire bids. All these add to the excitement for the bidders. Of late, PennyGrab is trying to have games on the site and reward the players with bids. Isn't that cool?

Join PennyGrab today and get 5 free bids when you join to get started. 

Saturday, April 14, 2012

Limboauction Review: An Exciting New Penny Auction

This Limboauction review covers the basic working and concept of the site and what I think about this penny auction which has quite a new and innovative model.

Limboauction is not a typical penny auction (like Quibids) and in fact belongs to a class of penny auctions that are becoming popular by the day - timerless penny auctions. These penny auctions do away with the timer completely. However, Limboauction isn't even a regular timerless penny auction (which is usually a reserve price auction, i.e. a price is set and hidden for each item) which makes it all the more exciting.

How Does Limboauction Work?
The Limboauction works is that in any given auction, the price keeps dropping from a high value, which is near the retail price of the item. At any given point in the auction, any bidder can place a bid and immediately in the item. That's it. It is simple and elegant. Let us take a deeper look.

Consider the auction shown below. The retail price of the product is $50. The auction starts at $45, which is already a discount of $5, which is great. However, this isn't all. When the auction begins, the cost of the item keeps dropping. This means from $45, it goes to $43 and then to $40, then to $35 and so on.

The bidders are all watching this, and they can jump in at any time they want. Once they bid on a product, they win it at the price that is currently being shown.

More about how Limboauction Works
Here are some more characteristics which are interesting and good to know to the bidders -

  • There is a limit on how many bidders can participate in an auction. This is good for the bidders because as the site grows in popularity, you don't want hundreds of bidders on a single auction. For example, at Quibids, a typical auction typical attracts several hundreds of bidders over the life of the auction. Here, you are limited to a given number. Currently, it appears that there are 6 bidders at most for an auction. For obvious reasons, a minimum of two bidders are required for any auction. 
  • You pay for every auction you enter. The losers 'subsidize' the winner's earnings, but you can use clever strategies and outsmart your competition. 
  • The auction time isn't ridiculous. If you look at traditional penny auctions, some auctions can go on for over 24 hours! Here, every auction will end in a few minutes, and this keeps the excitement level high - the whole purpose of penny auctions in the first place. 
  • Being an early adopter on this site seems to be highly beneficial, before bidders can come up with competitive strategies that will eat into the overall profit that bidders derive from the auctions. 
My thoughts on Limboauction
I personally like the concept of Limboauction and see a good potential for growth. From a bidders point of view, I think joining in early is a good idea before the site becomes more popular with different bidders. 

Devise your Limboauction strategies with care. Obviously you want to win the auction but you also want to make sure you get a good discount on the product. Don't swing to either extreme, which is another way of saying don't be too greedy. 

As with any penny auction, I would advise you to bid only on items that you really need. If you live in a small town in Idaho where the nearest Starbucks is 5 miles away where you have never been and don't understand what the hype is all about, ask yourself if you really want to bid on a Starbucks gift voucher. Perhaps, you should wait for a Lowe's gift card which might make more sense. Think of what auctions are worth the money you invest in the initial fees to 'join' the auction. 

Check out Limboauction today and don't forget to share your thoughts about it. 

Is Quibids about Luck?

Is Quibids all about luck? Are penny auctions all about luck? These are some natural questions to ask that probably every bidder has asked himself at one point or another. Sure, you can greatly increase your winning chances by following penny auction strategies, but what's the role of luck?

Irrespective of how many penny auctions you have won and how expert a penny auction bidder you are, there is no denying that luck does play a part in any penny auction win. This is mainly because winning at Quibids or any penny auction depends not just on your actions but that of others as well. And you cannot, obviously, control how other bidders behave. Any penny auction involves the interaction of hundreds of bidders in most cases, and it is a very difficult dynamic to predict. So yes, there is an element of luck. Of course, you can increase your chances of being "lucky" or just follow some strategies.

The thing to remember is that the most common winning method on penny auctions is through the Volunteer's Dilemma. This single phenomenon is probably responsible for more than 50% of all wins on penny auctions and this is no exaggeration. The problem with volunteer's dilemma is that it depends on the actions of a group of people who are not under your control. I discuss methods to improve your winning chances but that's all they can do.

So yes, any penny auction will have an element of chance. Perhaps you can come on top if you follow all my penny auction strategies on a huge scale, like hundreds of auctions. That is usually not how bidders operate. This is why I am a strong advocate of bidding only on items that you want, and using the Buy Now feature of Quibids.

Just to illustrate, I am taking an auction of the new iPad, which is available on Quibids now (this is actually a welcome change because I remember when the iPad-2 came out, Quibids took an agonizingly long time to have it up in the auctions and all around, plenty of penny auctions were already promoting themselves with the coveted piece of electronics). These two auctions ended on the same day, so it is all the more impressive. Look at them both and tell me what you think -

See the difference? It is HUGE! The first auction ended at $199.18 and the second at $4.83. In the first, bidders collectively spent a total of a whopping $11,950.80 and in the second, bidders collectively spent a total of only $289.80. The difference couldn't be starker. Do you still think there is no luck involved in Quibids or no luck involved in penny auctions?

What do you think about the role of luck and strategy in Quibids and penny auctions? Share your thoughts

Friday, April 13, 2012

Types of Penny Auctions

What are the different types of penny auctions? This might sound like a surprising question to a few bidders because when we say penny auctions, they assume the typical penny auction with a timer that goes to zero and increments each time a bid is placed. However, this is not the only type of penny auction in play today. In fact, another term for penny auctions is 'entertainment auctions' as was popularized by Quibids, the largest penny auction in the world. Once the entertainment part is present in the name, you know why they are popular and why that they serve the dual purpose of discounted shopping and entertainment.

All these classes of penny auctions fall under the ambit of 'pay-per-bid' auctions. As the name suggests, these auctions work off of paying per bid placed. This is true of all penny auctions, the traditional penny auctions and the newer versions and variations on it.

Let me broadly classify penny auctions in two different types, timer auctions and timerless auctions. Note that even under a given category, there could be several variations and different sites use different kinds of innovation for this model.

Timer Penny Auctions
These are the more traditional penny auctions that bidders have known. The most famous site in this category is Quibids, which is the biggest penny auction operating in North America. If you want to know more about this category, read how timer penny auctions work. In a nutshell, timer penny auctions work as follows -
1. You pay for a bid pack, which entitles you to place a certain number of bids that you purchased.
2. You select an auction and place a bid. There is a timer. The timer is reset each time a bid is placed by you or your competitors.
3. The auction is won when the timer becomes 00:00:00. The last bidder is the winner.
4. Item cost is increment in small quantities, almost always a cent, whenever a bid is placed. You don't pick a price to bid on.

Timerless Penny Auctions
Timerless penny auctions are actually becoming quite popular of late and more and more bidders are looking towards this model instead of timer penny auctions. There are many different models here and no universal rule. Well, the only rule is that there is no timer. The model is still pay per bid but the bidding goes on without a timer.

In the UK, there were many 'contests' for the lowest unique bid auction model - as the name suggests, you can bid any amount you want and the lowest unique bid wins. This is an interesting concept but definitely in the realm of gambling. This is a no-no at least for US based penny auctions.

However, there are other types of auctions, most notably, 'reserve bid auctions' in which there is a reserve bid that is hidden from the users. Bidders then start bidding and the person who uncovers this bid wins the auction. There could be some goodies on the way towards the final bidding just so everyone wins something instead of the winner-takes all model of most penny auctions. Currently, the most popular penny auction in this category is PennyGrab which has a really loyal bidding base, which is quite rare for any penny auction.

More and more bidders are preferring this auction model because they don't like the timer and possible shill bidding. There are many new innovations in this sphere, and I see a few new sites coming up as well with similar concepts. This could be a legitimate alternative to traditional penny auctions, but there is yet to emerge a contender as strong as Quibids.

Please don't forget to vote for which kind of penny auction you like the most - find the poll to the right hand side of this page. I would love to hear about your thoughts and experiences on both these auction models

Wednesday, April 11, 2012

PennyGrab Free to Bid Auctions

PennyGrab always manages to come up with some great promotions. You can check out the latest PennyGrab promo codes which are fun because you get free bids. Now, PennyGrab has come up with another exciting auction, which is free to bid! This means you don't spend your bids when you participate in the auction, just the final auction ending price. Since this is usually lower than the retail price, there is no way you are going to lose, so there is no excuse for not being part of this.

PennyGrab announced that it is going to have 10 free to bid auctions and they begin today at 7pm EST. The only catch is that you should purchase a bid pack in the last 1 week, which is a fair bargain.

Check out the free to bid PennyGrab auctions.

Monday, April 9, 2012

Quibids Can Lose Money Too: Quibids Losses

Penny auction bidders usually think that the sites make a killing with all their bids. Although that is true in many cases, it isn't in others. There is a huge risk involved from the website by hosting penny auctions. After all, theoretically, they can lose almost all the money they paid for the product, although it is rare.

It is not just the new penny auctions that lose money on auctions. Even established penny auctions like Quibids can sometimes lose money on certain auctions. This is becoming increasingly the case as people seem to be saturated bidding on penny auctions and the industry as a whole has slowed down. This means, more and more individual auctions on Quibids might actually lose money for the company. On the whole, averaged out, Quibids probably still makes a killing, but it is interesting to note how the site can lose money too.

The big-ticket items that retail for excess of $2000 or so are the ones that are usually risky for a site like Quibids, although they can also be highly lucrative. Remember how they sold a car and make a cool 30 grand profit? Most of the times, in featured auctions of the week, Quibids prefers Apple products. However, of late, Quibids has been more adventurous and this is good for the bidders. By providing niche products, there will not be as many people interested in the product and there will be reduced competition. Of course any reduced competition is bad for Quibids.

Here is a recent auction.
This product is valued at $2076 by Quibids. Let us say this is actually the case and consider this for our example. Now, looking at the final price, we know that 1339 bids were placed in all. This means the total revenue for Quibids for this auction was 1339 X $0.60 = $803.40. The total loss therefore was $1272.60. This could actually be an underestimate of the loss because a lot of the bids could be virtual. However, overall, it seems that Quibids makes more money on virtual bid vouchers than real bids, so I wouldn't consider that too much.

This example is just to show that there are auctions where Quibids loses too. It is a risky game, after all. For all the new penny auctions out there - remember that the going can be tough at times. If the industry leader Quibids has trouble finding enough bidders, chances are, you might too. Be prepared for losses irrespective of how large your bidding base is. 

Friday, April 6, 2012

True Auction Style Penny Auction

A new Penny Auction, nebids is in pre-launch. This penny auction aims to be a true auction style penny auction in that it has not just buyers (bidders) but also sellers. This means it is going to really be an eBay styled penny auction where sellers will set up their products to be bid on penny auction style and buyers will bid on the products they want, penny auction style.

This concept isn't entirely new. Several large penny auctions had tried it in the past (not Quibids though as far as I know) including BidRivals. However, the program didn't get a very good response for a variety of reasons (e.g. read the SuperBidRivals review from an actual user of the program when it was active). There are plenty of details that need to be sorted out for such an ambitious program to work. I am sure the founders are thinking about those though.

There are several challenges that will need to be addressed. For instance, you want a good mix of buyers and sellers on your site for the model to work. Also, it is important for a critical mass of bidders to form for the idea to be profitable, more than regular penny auctions will need. Until then, the site will need heavy promotions and hope to attract both bidders and sellers.

The site is being started by Larry, Scott and Marcus from Florida. All of them have previous entrepreneurial experience but not in penny auctions. I hope they understand the challenges of the industry and are ready. The regular features hold, e.g. providing a robust feedback system so that sellers will have an incentive to be honest instead of cheating (again, need a critical mass). nebids also has dispute resolution in place, as it should, especially when it is starting out. After all, it isn't eBay!

A good point that Larry raised was that since this is going to be different in being a marketplace of both buyers and sellers, the problem of shill bidding is eliminated. This should provide a good level of trust and honesty that new penny auctions find hard to attract.

The launch is still far away, about a couple of months ago for beta. It would be interesting if the trio can pull this off and be successful in the saturated and competitive world of penny auctions. They have a nebids blog that you can check out for updates.

There are also some giveaways for interested bidders. During the giveaway they have 2 grand prizes, 1 new iPad and 1 $500 Amazon gift card. They will also be holding dummy auctions where people can win $5 and $10 gift cards as well as equivalent value bids. There's multiple ways to gain entry into the contest, by entering their email address on the landing page, by liking our facebook page, etc.

It will be an interesting endeavor to follow. With their previous entrepreneurial experience, hopefully, they can build something great.