Wednesday, January 2, 2013

Should you Bid on Quibids? A Case Study

It is profitable to bid on QuiBids? What are your chances of winning and losing? I will try to answer a few questions in this post through a case study.

As part of year end blog posts at QuiBids, they released this blog post which talks about the "biggest wins" of 2012. I couldn't find anything about the "biggest losers" of 2012, so I thought I'll go find some auctions where this disparity is high. I don't have access to the full database of course, so this is more of a trail and error for me. If you have a better example, let me know in the comments.

First off, the product: Panasonic Massage Chair. There are several models but QuiBids doesn't mention that on the auction page for some reason. To make sure I was looking at the right model, I Googled for the reviews posted at QuiBids and went to the appropriate Amazon page. Here is that product at Amazon:


As you can see, at Amazon the cost of this chair is $2037.98 with free shipping. I am also noting the shipping costs because these definitely add to your final price that you as a consumer pay. If there were no QuiBids i.e. you are not looking to purchase this at a regular ecommerce website, chances are you'll go to Amazon and spend $2037.98 for this chair.

Now, enter Quibids. You either have a chance to win this product at a discount, which can range from ridiculously cheap to barely scraping a profit. How competitive the auction is impossible to predict because every auction is unique. Here are two extreme scenarios -

Here is an auction that ended ridiculously cheap so the winner ended up with a huge discount.


The product sold for $1.85, i.e. 185 bids in all. Valuing voucher bids the same as regular bids, the total revenue through bids for this auction was 185X$0.60 = $111. The winner used just 7 voucher bids! Most certainly, QuiBids lost money on this auction. However, the beauty of this model is, on an average, QuiBids comes up on top.

Here is another auction that ended ridiculously expensive for the same product above.


In the above auction, bidders placed a total of 34,462 bids. Valuing voucher bids the same as regular bids, the total revenue through bids for this auction was 34,462X$0.60 = $20,677.20. QuiBids made a killer profit here. The profit from this auction would have covered them from ten of above auctions that ended up cheaper.

The more astute among the readers would now ask, what about Buy Now? That is a great question because we, from the outside, will not have statistics for how many people end up buying the product at its full retail price after bidding on the auction. This is never revealed by QuiBids. I don't want to make an uneducated guess at this number.

However, let me claim something better - QuiBids makes a profit irrespective of how many people exercised their Buy It Now option! Look again at my first picture, where I show this chair at Amazon. Now look at the QuiBids Buy It Now price - it is invariably higher.

By buying in bulk, I assume QuiBids gets a better discount, but the purpose of this post isn't to try to figure out how much money QuiBids makes but how much you can save. So your best bet is the Amazon price. Here are your options, then assuming you didn't win the auction and want to use the Buy It Now feature at QuiBids:
1. Buy at Amazon and spend $2037.98
2. Buy at QuiBids and spend $2185.99 + $29.99 (shipping) = $2215.98
A difference of $178.

This means if you use the Buy It Now feature, even then you end up losing $178 on this product compared to the market price. I haven't even tried to explore things like flash sales, other discount online stores in addition to Amazon, and other options. I don't know what the best deal online would be.

In a nutshell, for this product, you are paying $178 for a chance to win it at a price lower than the retail price at Amazon. Whether this is good or bad, I leave such judgments to you. It worked out really well for the winner in the cheaper auction and still worked out quite alright for the winner of the second auction, but not so well for all the other bidders who lost.

Also, lets not forget a time investment. In the second QuiBids auction, a total of 34,462 bids were placed. Now I don't know the average time between bids because it depends a lot on the bidding strategies that people are using. I didn't personally follow the auction either to know how long it lasted. Assuming an average of 3 seconds between bids, the total time investment would be 34,462X3secondsX1hour/3600seconds = 28.72 hours. That's a lot of time spent by a lot of people (of course not everyone will stay from the beginning to the end).

This post also highlights the role of luck no matter how much you know your QuiBids strategies. Of course, the real strategy is first to shop and bid wisely - know what you want and don't want and look up its price on alternative sources. Know the risk you are taking and make a judgment whether it is worth it or not.

What are your thoughts on this?


9 comments:

  1. I have a question that I cannot see if you have addressed yet. Do you think the Quibid auction timers are accurate? I have watched many of the auctions and will countdown the last 10 seconds. The clock hits 0. I will say Going Once, Going Twice. The auction should end at Twice. So a bidder should be poised to hit the Buy button at Going Once. However, the timing or rather rythmn is not consistent in the countdown. I have hit several times as the clock says 0 and been told my bid is too late. Also, I won an auction for 2 cents. First bidder, me, and then immediately (no Going Once, Going Twice) and the auction ended. Your thoughts please.

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  2. It doesn't go 'Going Once' etc. The clock just runs down to 0. You can try to follow some small auction from the beginning to the end to see how the whole process works just to become more familiar before you bid.

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  3. If you wait until the clock is 0, you will usually be too late. I have sometimes got a bid registered by clicking when the clock is 1, or just after 2 shows up, but clicking when the 2 appears is safer. Remember two things: there is a delay in the time it takes for the HTTP message that updates the clock to reach you (the clock seems to be "free running" until the update comes - so sometimes the clock can go back up, or skip a second or two going down!), and then again it takes time for your click to get to the servers. So, given the vagaries of the Internet, no things will never be consistent.

    I don't generally value my voucher bids the same as the purchased bids. I value them at something less than 1/2 of that - say, maybe 1/3 to 1/4 of that. Still, at 0.15 per bid, quibids does just fine -- sometimes. On the other hand, after being dormant for months, I collected some voucher bids from quibids, and got a little lucky on a voucher auction and some game play auctions, and have pretty much got back to even on dollar value (undervaluing my 4 wins since December), all without having to purchase additional bids.

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  4. Great blog! I have played around with Quibids, Zbiddy and PennyGrab for the last 2 weeks. I think PennyGrab is horrible, unless you have money to burn, since it's more like a slot machine than real bidding. As far as Quibids, my strategy is to only bid on items that I'm willing to pay half price for; i.e., my real bids will count toward Buy Now. I only bid on voucher bids when I want to get a free game, because playing the Scrabble game is really easy and I won at least 40 voucher bids that way.

    So far, I haven't been able to use the "Volunteer's Dilemma" strategy, because either the bidders are irrational (bidding more than the item is worth, just to win), or because they use bots. I'm going to try that VD strategy as soon as I see two or three bidders waiting until the last few seconds to bid.

    So far, I have spent about $187 over the past 2 weeks and won over $200 in auctions, so it's about even, really. It's more for the fun of it, and I only bid on things I would buy anyway. I always check Amazon for the price of an item, and so far the MSR is correct. Since you don't pay sales tax or shipping on auction wins, you actually get them at a slightly lower cost if you Buy Now or break even.

    I like that you can trade items you win for things you'd rather have.

    Anyway, great blog, great ideas, thanks for your tips!

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  5. Just an update for others who read this blog and are too timid to comment - here is a list of my winnings since Feb. 22. At first, I was stupid and wasted money and time, but then I got much better:
    Cuisinart Sandwich Grill (free - bid was less than .20)
    Mini Shop Vac (cost $11 in bids)
    iHip Headphones (4.60)
    Pioneer Headphones (1.50)
    Microwave Bacon Cooker (free)
    $10 Target Gift Card (free - only thing I won on PennyGrabber on my very last bid forever!)
    iPod car charger (free)
    Multimedia Keyboard (free)
    Bronze Swing-lid Trash can (.27)

    On ZBiddy, which I quit because there's nothing good on there, I only spent money on one initial bid package, then just won bids from then on. So far, I won $300 worth of restaurant vouchers that I've printed up and given to family. It's a legit site, but has boring stuff.

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  6. I joined Happy BidDay with 50 free bids, won a bid package of 300 bids for $20, and will let you know if it's worth spending any money or time on. Cheers!

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  7. Before I place a bid on anything I make sure I know what's the lowest price I can purchase it for online. Then I set the maximum amount I am willing to bid and stick to it.

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  9. Its a really informative blog. Can I buy a Massage chairs like you said.

    ReplyDelete