QuiBids is an auction site that allows you to buy iPads, gift cards, trips, waffle irons, golf irons and just about anything else under the sun. And they sell all these products at cents on the dollar. For example I just saw a Nintendo Wii package (normally retails for about $200) sell for $4.99! The person that won only had to pay $4.99 for a $300 product... well, kind of.
In QuiBids you need to purchase your bids and each bid cost $.60. If you buy a package of 100 bids you pay $60 up front. Each time you bid, it costs you real money. For the Wii package above, the individual had to bid 120 times (each time you bid, the auction price is increased by $.01) and since it sold for $4.99, we know there were 499 bids (it starts out at zero cents). In real money, the winner of this deal actually paid $4.99 plus $.60 per bid (120 bids = $72) for a grand total of $76.99. Still a really great deal right? Well, yes, for the person who won. This product had twenty other people bidding on it and all of them (499 bids minus the winners 120 bids) paid out $227.40 in bid fees. Fees they don't get back. They paid to bid, not to win. When you look at some of the auctions, its really crazy how long and drawn out they go on for because even though the action counts down, every time somebody bids, it add 10 to 20 seconds to the auction. Literally, these can go on for hours and hours. A Joola Quattro Table Tennis Table sold yesterday for $33.56. That's 3356 bids for a grand total of $2013.60 in bid sales for QuiBids. All for a product that retails for $500 and QuiBids buys at wholesale for $300. That's a whopping profit of of over $1,700 for a single auction. A Callaway Razr Hawk Driver worth $370 retail sold for $30.56 and did over $1800 in bid revenue for QuiBids.
QuiBids makes it fun too. They have achievements with badges and everything. The 'More Bid Combat' badge, 'Running Riot Badge' (no, not for Vancouverites) and 'Going Rouge' badges are awarded for aggressive bidding. Their site is slick, easy and engaging. Its a little bit like gambling because its competitive, exciting and there is risk and chance involved. Will the people I'm bidding against give up before me? Each bid you make, makes you more committed financially to winning the deal. As I said above, I might win the Callaway Driver for $30 but everybody else has already invested $1,600 to win the same product. I'd hate to invest 100 bids just to walk away empty handed (and $60 bucks less in my pocket).
And this is where the greedy capitalist side of me says "wow!". I spent a couple of hours monitoring some bidding and here is what I've found when I looked at a sampling of completed auctions:
- QuiBids has about 400 auctions complete per/hour
- I averaged these out and based on what I tracked, QuiBids is doing about 10,000+ bids an hour.
- Even though I've used examples of where the bids revenue is way higher than the product price, they do have about 40% of their products selling at less than their cost (bid revenue + sale price - product cost). Take into consideration though that QuiBids does not pay retail for these products and their losses drop significantly.
- In my sample of 20 transaction QuiBids made approx $4k in top-line revenue for about $900 in products (again, retail price, not wholesale).
- In none of my samples did the buyer ever pay more than the value of the product (auction price + bid cost).
Based on the auctions I dug into, QuiBids is making an obscene amount of profit. And this is just in the first month of operations. As it takes off and gets some traction, I'm betting this company could give eBay a run for their money. Amazon for that matter to. Buying something online is normally as much fun as doing laundry and QuiBids has come up with a way to make if fun, addictive and, if you're an auction winner, a great place for a deal. I also find it a bit frighting because it combines so many compulsive behaviors like casual gaming, shopping and gambling all into a single experience. And lets be clear that this business model relies on those compulsions. QuiBids is the opposite of Groupon and other social dealz sites. Where those programs rely on the crowdsourcing to help initiate and secure that same crowd a deal, QuiBids is more crowdfleecing. Groupon is socialized deal making for the many and QuiBids is survival of the fittest (and by fittest, I mean that person willing to stick it out till they win).
Will I be using QuiBids to buy stuff? No, its a rip off unless you have the fortitude to fight tooth and nail to win the auction. Do I wish I thought of QuiBids? Hells yes.
~ chris
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