Makoing Money ono the Internet

[OneFinger]

In another thread there was a short exchange on how to make money on a website. I found it very informative. Then today, a co-worker told me of an auction site (he couldn't remember the name) that could really make a killing.

 

I'd appreciate knowing if anyone is aware of this site or if his explanation is plausible.

 

The site lists an item (let's assume the MSRP = $500 and the site bought it for $250). They start the bidding at 1 cent ($0.01). All bids must be in increments of 1 cent (nothing higher) and each bid costs the bidder a pre-paid cost of 60 cents. (Let's also take all operating costs out of the equation for purposes of this discussion.)

 

If I'm calculating things correctly, the site breaks even after 410 bids or a auction end bid of $4.10. In order to recoup the MSRP the bids would have to equal a total of 820 bids for a auction sale bid of $8.20.

 

By the time the bid reaches $50.00, the site has already made $2,800 for their $250 investment.

 

So, does anyone know the name of this site? Any comments on the viability of such a site existing?

[Diverdan]

The process as you describe it, seems like a SCAM to me. Why I would I bid on anything for $.01 if it costs me $.60 to make the bid? That does not make any sense to me. There are a lot of legitimate auction sites and other business sites on the internet that make money, but I would certainly stay away from anything as you describe it. And, I don't know the name of that site or any other site that comes close to it. I would say "Beware"....

[wayout]

I hadn't heard about this before but you got me interested. From a cursory search, it sounds like it is what is called a Penny Auction and there appears to be quite a few of them up and running. Found a site that listed the top 72: http://www.100auctionsites.com/penny-auction.php

 

The site references an article by Time that briefly discusses it: http://www.time.com/time/magazine/article/0,9171,1997462,00.html

[Guest Merlin]

I agree with Diverdan. It would make no sense to participate.

[rland54]

Onefinger, I believe the site you are referring to is Quibids.com.

[MsGuy]

Sucker Trap

 

OK, I'm gonna sell you a lottery ticket that's guaranteed to win because it cancels all prior tickets. You can't lose unless, of course, some ass-hat buys a ticket after you. Not to worry, I'm always here to sell you another one. Nice business.

 

Throw in a site robo-bidder to keep the action going [see Wayout's NYT link] and it graduates from sucker trap to straight up fraud.

[KMEM]

MsGuy-

 

I am going to buy a lottery ticket from you (so long as it is the LAST one you sell). Don't worry, I will split the proceeds with you and we will have a good time.

 

Best regards,

KMEM

[+ deej]

Just provide your bank account number so you can transfer the funds out of Nigeria, eh?

 

Barnum was right: there's a sucker born every minute.

[Guest Spanky]

I'm a sucker

 

When I first learned that sites like these existed I checked one out. I bought $300 worth of bids and ended up getting a bunch of stuff. A digital camera (Amazon price was $150ish and I gave it as a gift), an external hard drive (Amazon $80, something I needed and was going to buy anyway), a $50 pre-loaded Visa, and a Kindle (not wireless, which I subsequently sold). So I came out ahead but the novelty completely wore off after two days. And:

 

• it's a huge time suck
  
• has the potential to be a huge money suck
  
• it sucks you into buying shit you neither need nor want (but my parents got a new digital camera, which they didn't want or need and probably won't use)
  
• it's something that could quickly turn into a very bad habit (kind of like avoiding work by posting on this Forum) with the giant sucking sound coming from your wallet
  

 

That's a lot of sucking. And I realized it was not sucking in a good way. So I left the party while I was still having fun.

 

Meanwhile, how much fun are bullet points!

[OneFinger]

Onefinger, I believe the site you are referring to is Quibids.com.

Bingo!! I talked with the co-worker again today and that was one of the sites he found. The other was Swoopo. Actually found a link that explains the process better than I can.

 

http://en.wikipedia.org/wiki/Swoopo

 

Actually went to Swoopo and saw where someone "bought" an ounce of silver for about $4,20. But, when you added up the number of bids he/she made, they ended up paying more than $20 OVER the current market price.

 

So, buying an once of silver for $4.20 sounds like a good deal. But, when all the bidding fees (and shipping) are added, it really wasn't a good deal.

 

I agree with others that indicate people can get caught up in the excitement of the auction. I think you could actually get some great deals if you're lucky. But, over the long haul, only the auction company is making a profit.

 

Sounds like an interesting concept and has the potential for making a good profit. But, not sure I'm willing to participate.