In case you don't know there are tons and tons of sites on the internet called "penny auctions." They are sort of a combination between an auction and ebay. The trick is that you have to pay for every time you bid. Quibids.com is just one of those sites. It's the site i decided to focus on.
Here you pay 60 cents for every time you bid. At first glance it looks like an amazing deal. Tv's being sold for $50, two-hundred dollar gift cards being bought for $9. The thing you have to remember is that the bidding started at 1 cent and for it to get up to $30, that means that it received 5000 bids at 60 cents per bid. That means that the web site made 5000 * 0.60 = $3,000 for the TV. The site makes it's money when things are being bid on thousands of times. There are hundreds of these sites and they all basically look and work the same way.Quick, hurry up and bid on that Xbox, you have 19 seconds and you can get it for $1.42. So you bid $1.43, spending 60 cents in the process. Then 3 seconds later someone else bids $1.44. This process keeps going and going.
You sign up, buy a number of bids (100 bids costing $60 at Quibids.com) and then you can start bidding on whatever you'd like.
A great site is bidcentz.com which keeps track of some of the items sold, at what date, time and price Most people just bid without any information, sometimes they get lucky. But my goal was to have as much information as possible about history, trends, etc, so the site bidcentz.com helped a lot. Let me just say now that this is still a total shot in the dark, i didn't try any of this, it was just an experiment to see if it could work.
I decided to look at 2 of their popular items. 1 expensive item and 1 cheaper item.
- Item #1 - Apple iPad 16Gb Wi-Fi. This, along with the 32 and 64 Gb models are very popular on the site. They can sell for as little as $3 and as much as $90
- Item #2 - $100 gift card. They are not as popular and usually sells around $10
Again, the key thing to remember here is: the website doesn't make money on the final price, they make money on the number of bids. The iPad retail price is $600. That means at 60 cents per bid, the website profits anytime the price reaches $10. 1000 bids * 0.60 = $600 on average the iPad sells on their site for $35. That means on average they get $2,100 for each one they sell.
The trick, I THINK, is to follow the trends to find a date and time and you can narrow down when to bid. For example IF on every Friday at 6pm one sells for between $30 and $40, then there's no real point in bidding between $0 and $30. Odds are that it won't sell then.
I started tracking what would be the best times to buy and iPad. It turned out to be early on Tuesday's and 4pm on Friday's. Around those times they usually sold for less than $4. It was basically just a little bit of information to narrow down times and prices, giving you an advantage of when to bid. Sort of like investing in the stock market.
But this is the point where i gave up. I never signed up and tested to see if the bidding strategy would work.
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