codenode

"A designer achieves perfection when nothing is left to remove." —Saint-Exupéry

The truth about QuiBids

with 61 comments

QuiBids is a penny auction website with an irresistible hook: win awesome stuff at bind-blowing prices, like a brand-new Apple iPad 16 GB Wi-Fi for $4! It seems unbelievable but it’s true. It’s also very deceptive.

I spent a little over $300 today and won only some Pyrex containers (I did need them, at least). Before I expose the penny auction machinery let me make clear: I’m not blogging this in a fit of rage over my $300 Pyrex containers. Believe it or not but I don’t care about the money. Also, I intended to spend that much because I was sure no one would out bid me at that price level (I was bidding for an iPad and historically they’re won at far less than $300). My motivation for this blog is simply to lay bare the plain details and facts about how (this) penny auction website works financially, to show and prove to you that, unless you enjoy seeing your money disappear at a fantastic rate whilst participating in the grotesque enrichment of the company to which it went, you should not participate in penny auctions.

I speak of QuiBids because it’s all I know. I can only guess that other penny auction websites operate similarly. If QuiBids objects to this blog post then that’s too bad because I’m protected by free speech and nothing I’m about to say is false to the best of my knowledge. (I will correct any factual inaccuracies pointed out to me.)

Let’s use this auction as an example. At the time of writing, the bid price for that iPad is $157.26. Let’s simplify and call it $150. Now here are some important facts:

  • Users (i.e. you and me) must buy bids; users do not bid with real money.
  • Each bids cost $0.60 (sixty cents). E.g. 75 bids = $45.
  • The price of items, like our example iPad at roughly $150, are bid up in $0.01 (one cent) increments (this varies; sometimes the increment is more).
  • The user who wins can buy the item at its final bid price.

Let me first emphasize the last point. If an item is bid up to $150 and you win it, then you buy it for $150 plus all the money you spent on your own bids, that is, $0.60 times the number of bids you made. So if you made 100 bids then you spent $60 on bids (100 * $0.60). Therefore the real final price for your item is $210: $150 for the bid price + $60 spent on bids.

Obviously you want to place as few bids as possible, but that seems nearly impossible to do if you have any chance of winning a “sexy” item like an iPad because, as our example auction shows, the bidding may drag on for hours. Our example auction began sometime this morning around 11am–I know because I place 278 bids ($166.80). This presents a very high barrier: bid competition. Some auctions end after less than 100 bids, and other auctions require thousands of bids. It’s easy to calculate how many bids an auction has received: for auctions with $0.01 cent increments the number of bids is simply PRICE * 100. So our example is 150 * 100 = 15,000 bids. The math is simple: 1 bid = 1 cent increment in price and there are 100 cents in a dollar so there are 100 bids in each dollar of the price.

Now wrap your mind around this: each bid cost someone $0.60, so if an item, like our example iPad, has received 15,000 bids then that’s 15,000 * $0.60 = $9,000 that QuiBids receives for one iPad.

Someone is going to win that auction, and let’s say it’s someone who comes into the auction late and bids only 100 times, thus costing their self $60 plus whatever the final price of the time is. Right now, since I’ve been typing, the price has increase from $157.26 to $160.78. Let’s be generous and hypothesize that someone won it at $160. So their final price is $160 + $60 = $220. And $160 at 1 cent increments requires 16,000 bids minus the 100 the winner placed meaning that the losers spent $9,540 (15,900 bids) for nothing. I am one such loser.

In their defense, QuiBids let’s you apply the money you spent on bids towards buying the item at what they consider retail price. For me that means I can buy the iPad for their retail price of $699 – the $166.80 I spent on bids, which equals $532.20. With shipping the iPad is $548.19 from QuiBids and $528.94 from Apple, a difference of only $19.25. That’s seems fair, right? No, we’ve been tricked again! When I describe it like that it looks like I’m only paying $19.25 more for my iPad but in reality I’m paying $548.19 to “buy it now” plus the $166.80 I already lost which totals $714.99, or $186.05 more than had I just bough the iPad directly from Apple. I’m still better off just paying direct from Apple and cutting my losses with QuiBids because if I buy from Apple for $528.94 that totals $695.74 with my $166.80 QuiBids loss, or $19.25 less than the “buy it now” option. Sure that’s only $19 but why give QuiBids another $19 when they’ve already raked in over $9,000 for that one iPad?

Even worse, my $300 loss was over two auctions so the amounts cannot be combined to buy an iPad through QuiBids less $300. If that was possible then I probably would not have written this blog. (I intended to play only one auction but technology failed me–that’s a completely different complaint, though.) I think the inability to combine losses verges on unethical because, all told, I gave QuiBids $300 in exchange for $26 worth of Pyrex contains–that’s terribly imbalanced. I’m willing to pay them more than Apple’s retail for an iPad because the extra money would be for giving me and others a chance to win that iPad for a very cheap price. Of course, any way it goes, I’m out money but that’s the price I pay for playing such games.

The bottom line: penny auction websites like QuiBids are a bad idea because countless people will waste countless hours of their lives only to lose thousands of dollars on a single item which costs, at retail, only a few hundred dollars, and all their lost money becomes the sole profit of the company which cleverly masques the dollars-and-cents reality of its game in a shroud of penny-bid lingo.

Written by Daniel Nichter

July 29th, 2010 at 6:27 pm

Posted in lesson

Tagged with , , , , ,

61 comments on “The truth about QuiBids

  1. While bidding on a vaccuum cleaner I had a look to see what the other five items auctioning at the same time,from the same window was going for. It appeared that the bids from the vacuum cleaner were simultaneously being added to the cost of the other items, in unison. The totals and bidders were the same. While each separate item sold for a different price, it appeared that bidding for the vac upped the price of the bracelet or cream maker as well or vice versa. I could be wrong, but this is what it looked like. Has anyone else noticed this, or help to clear it up?
    I decided to give quibids a go, but am not returning after my initial money has run out.

  2. Pingback: How to get free bids on quibids? and what are the best tips to win? | internetauctions.co

  3. Yes, I also have noticed this and am still trying to find out why it is doing that. I was bidding on a home security system and it said once the auction was over that I was bidding on an HP printer that had the same value as the security system. If there is anyone that knows a way to get though to QuiBids they need to, so we can start bidding on the item we want and not have the other auction raise the price of our auction.

  4. Pingback: How to get free bids on quibids? and what are the best tips to win? | freepennyauction.org

  5. Pingback: Why does quibids freeze at 1 second left? | internetauctions.co

  6. Pingback: QuiBids trying to force me to buy 100 bids? | pennyauctionsites.co

  7. Folks please do not waste your money on Quibids and enrich the company. If a TV sold for $100 they already made $6000 + advt. money. They retail price showed in the site in most cases is three to four times higher than the same you can buy online from somewhere else.

    They will always wins in this game. This is a software developed by them there is no way to know that there isn’t a random name generator bidding for Quibids to cover their cost for each item. Besides, the buy now price in it’s site is at least twice more than the same item you can buy online. This is a fools game stay away. Do not throw away money in gambling.

    -Well Wisher, serving innocent community

  8. Bid on eBay auctions! Much safer!

  9. lisa l on said:

    i forgot my password and qbid mwll not give it to me after taking $99 out of my checking!

  10. Megan on said:

    It’s not a scam but your chances to win something are very small. Look what penny auctions players are talking about Quibids: http://www.doesitreallyworkorscam.com/quibids-scam

    So it’s a nono from me.

  11. Scott Grumbles on said:

    OK so the fact that the other item price makes yours go up is that in fact you are all biddign against each other but you are biddign for a multitude of items that are in the same proice range. THIS IS WHERE I DRAW THE LINE. This is not right. I should only be bidding against someone who wants the same item, its the only way we can know what the average prioce this should end at, you might as well be bidding on a chance to win $xxx. I have won some items and feel sometime I did OK sometimes I didn’t but now I will NEVER BE BACK. I knew that Quibids was getting rich getting big bucks for an item but good for them thats just ingenuity on their part. NO MORE OF MY MONEY WILL GO TO THEM WITH THIS SHADY MULTI_ITEM LISTING AUCTION. If eBay wants to sell my items in a bidding frenzy along with other items of similiar prioce to determine my item price I would be in though… :) ————– SO LONG QuiBIDS!

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>