Thursday, January 08, 2009

The One Armed Bandit meets Ebay

Quote of the day: "Even a fool knows you can't touch the stars, but it won't keep the wise from trying." ~Harry Anderson

Song of the day: None.

State of mind: peeved

Date: January 9th, 2009

Ever hear of It's an online auction site for all things electronic. I can only assume that they got their name from the Ebay bidding style of waiting until the final seconds and swooping in with a final bid. I found it the other day while browsing for laptops and at first, it seemed like electronic paradise. Brand new laptops, digital cameras, cell phones, and TVs for pennies on the dollar! On they day I found they site, they had quite a few laptops with only seconds to go on their auctions and in the rush of finding what I thought were awesome deals, I considered registering, which is free, but decided against it. I figured it would be best to decide which laptop I wanted and then see if it was available on swoopo rather than get antsy and bid on something just because it was cheap. Also there was a part of my brain raising flags of many colors. I mean, a brand new Sony VAIO 19" for 15 dollars? Way to good to be true. Then I read that you have to pay for each bid. Well, ok. That made sense. So it was a site for serious bidders only. Each time you wanted to bid, you had to pay the site $.75. And since was the one purchasing the goods that went up for auction, I figured they were getting them at a wholesale discount. Considering the money coming in from bids, plus the actual winning bid I rationalized that they were probably making a small but nice profit. I could live with that.

Later that day while at lunch I visited the site again, unable to put the low prices out of my mind. And that was when I saw it. Every time someone bid on an item, more seconds were added to the end time giving someone else 20 more seconds to out bid you. And if there were more than 2 people interested in a 20 dollar laptop, you know they are going to keep on bidding in the final seconds. It's not like Ebay at all. The end time makes no difference. And each time they bid, another $.75 goes in the kitty. I started to become irate. It's not an auction site at all. It's an online slot machine with each click of a button another 3 quarters and a hope that the others you are bidding against get distracted for 20 seconds or more so you can win. Considering how often the bids went up, I couldn’t see how people were counting all of the $.75 cents they are adding to the final tally. They're caught up in the hunt to win. It happens on Ebay all the time, but at least with Ebay you can only get caught up for so long. Once the time is up, it's up and a winner is declared.

One lap top I was watching was at 22 dollars with 3 minutes left on the countdown clock. As I sat and watched it went up by 3 dollars while 5 different people kept adding their penny bids. (That's another trick. A lot of the "auctions" are penny auctions, meaning you up someone's bid by only a penny each time- reinforcing the idea of getting something valuable for dirt cheap.) Just as the clock reached 5 seconds, the lot of them plus people that had been waiting on the side line suddenly put in bids and with 20 seconds for each bid the time went back up to over a minute. In an online auction, a minute is eternity. And then I watched as for that entire minute all of the bidders kept putting in more pennies! Idiots. You aren't going to win with over a minute left on the clock. Why keep upping the bid and throwing away your quarters when you know you are bidding against multiple people? No one wins because they bid A LOT.

Also, right under the picture of that brand new lap top was a price it had recently sold for: 377 dollars. For an 1800 dollar computer. Which I think is another trick to keep people bidding by demonstrating how well another lucky bidder made out. Because it is a steal… for one bidder. But at a penny at a time, it took 3,770 bids to be placed. That's 2827.50 dollars, before the winning bidder ever paid their winning bid price which ups's take to 3204.50- for a laptop that has a manufactures suggested retail price of 1800- which is not how much items are usually sold for. And if they buy in bulk, I'm sure they paid even less. But even if they had paid the full 1800 dollars, they still get over 1400 dollars in profit.


And in case anyone is wondering, no I never did register or try my luck at any of the auctions.

Show quote of the day" "Oh Mario. If only I could control everyone the way I control you. Hop, you little plumber. Hop, hop, hop!"


fermicat said...

Part of the beauty of doing things online is minimizing the amount of "dealing with idiots" that you have to go through. Sounds like this site manages to combine the worst of both worlds. I'd rather pay more money and not experience the hassle.

LL said...

Hmmmmm... sounds like they've got it figured out.

But... if they paid $1800 for it and started the bid at zero... and charged .75 per bid... carry the one...

one person could make around 1400 penny bids and still be better than retail. Of course if 40 people made 1400 penny bids... then the site would be raking in the dough.

As for extending the time so that sniping (the term I've always heard it called) doesn't occur... I've seen that a lot. However on the sites I've seen, they extend the time 5 minutes if there's bids toward the end of the auction. That way the winning bid has to survive for 5 minutes in order to maximize the revenue for the seller. And since the site took a percentage of the sale, it benefitted them too.

word ver: fircryin - Ficryin out loud, they extend it 20 seconds?

Jennster said...

WOW. I won't go check out that site. They prolly have all sorts of phishing crap too. Glad you didn't get raked in.

NYPinTA said...

By adding only 20 seconds at a time so that the clock is still so close to the end only amps the bidders urgency to get in the final bid and keep the cycle going. It's not the amount of time that is added that is the problem. It's what the added time does to the people in competition for the item that I have a problem with. It keeps them bidding and bidding and bidding.

NYPinTA said...

And in my one example of someone winning a laptop for 377 dollars, I'm going to bet that wasn't the first laptop they bid on. With competition for the items being what it is, I'm sure that most people have to try quite a few times before they are successfull. Also, any item on that site is available worldwide, so you can't even get up at 3:00 AM and try and wins something while most of the country is asleep because all of Europe is awake bidding against you.

Stellar said...

I don't get it. You have to pay the bidding fee even if you don't win the item being bid on?

If the person making 1400 penny bids doesn't win the laptop, then he just pissed away $1050 and got nothing for it.

The way to do this is wait until the last minute then bid $400 or whatever. If you win you get a laptop for $400.75 (plus shipping I guess). That gives the other bidders little time to figure out what you bid by rapidly increasing their bids by a penny, or a couple of bucks. That's assuming that the bid of $400 isn't shown.

I only use eBay on stuff I can't find anywhere else, e.g. disney vault movies, old toys... bought a slide rule once.

NYPinTA said...

Actually, you buy the bids upfront in bunches of a set amount. 20 bids, 30 bids, 50 bids, 75 bids, ect. Of course, you can't just buy one bid at .75 cents. You have to buy a batch and if you use them up before an auction ends, you have to buy more before you can keep bidding. Which might be how people eventually win things, everyone else runs out of bids. And if you win and never bid on anything again, I bet you can't get your money back for the unused bids either. I did see that they had a few coupons up for bid as well- for bids! Something like '600 free bids' and people were bidding on that, so they'd be paying for it as well as using up bids they've paid for, just for the chance to bid more later.
Also, I saw quite a few of the same user names bidding on multiple items so I wouldn't be surprised if there were career bidders that bid on things in hopes of winning them so they could turn around sell them for near retail, but just below enough that someone would buy it from a single person rather than a store, themselves.

NYPinTA said...

Just a note, I posted this yesterday so quickly I hadn't noticed a few typos so I did clean it up and repost. Just in case one noticed a changed sentence here and there... and a few spaces so you all can rest your eyes while I rant.

Stellar said...

I noticed. I wasn't going to say anything about your remedial grammar.

Because I'm sweet like that.