You know the old saying, if it seems too good to be true, it probably is.
Recently I happened upon an auction site called QuiBids.com, and I was amazed at the smoking good deals. How about an HP LA1951G 19” LCD monitor, brand new in the box, full warranty, for $ 6.41? Yeah, that got my interest too.
So I investigated further, and found that in order to bid on something, you had to buy bids. Bids cost $0.60 each. Every time you click on a Bid Now button, your total of available bids goes down by one, the bid price of the object goes up $0.01 only, and a few more seconds are added to the auction clock.
It’s not always the same amount of time added either. After a certain number of bids, (and we don’t know how many bids it takes, QuiBids says it’s not the same for every auction) the timer will only reset to 15 seconds, and then 10 seconds some amount of bids after that. When the timer does finally expire, the last person to bid has the right to buy the item for the final auction price.
I quickly realized that for the person who really wants the afore mentioned HP monitor for a good deal, this could drive you crazy. You click and you’re the high bidder, seconds later someone else clicks and they are the high bidder. The clock runs out at what almost seems the whim of QuiBids.com, so the auction may not end until people either get such bad carpel tunnel that they can’t click anymore, run out of bids, or just get fed up with the process. Meanwhile, the bids are being burned on this monitor.
Let me break down what’s happening here to show you why this company can afford to do this. They walk downtown, or go online, an pay full retail for the HP LA1951G 19” monitor, which Amazon sells for $ 172.90 USD. At the end of the auction, the price was $10.25, leaving an apparent loss to QuiBids.com of $162.65. Seems like madness, I know. But don’t forget those bids you bought so you could participate in these “Start the Car!!!” type of deals. They cost $0.60 each and increase the auction price by $0.01 as they are used. This monitor has been bid up to $10.25 which means that it has been bid on 1,025 times. At $0.60 per bid, that amounts to $615.00 spent via pre-purchased bids. Now we actually see an apparent gross profit on this item of $452.35 . All they have to do is keep desirable merchandise on their site and they are making money hand over fist.
After doing all this math, I felt like this was a shady business, I just couldn’t put my finger on why. I was forced to admit that their business model is actually very clever. Smart buyers, with some time on their hands, can get a decent deal on their merchandise, the company definitely makes money, who is the loser here?
All of us, one bid at a time, that’s who. They take a little, from a lot of people. You have been manipulated, by the lure of a great deal, into spending $0.60 per bid, and you keep bidding because if you lost that monitor for the cost of only one bid, you would be devastated, you might even think less of yourself, and you don’t want to feel that way.
So, in the end, I think the cost of those cheap items is ultimately too high.