Penny Auctions Comparing apples to oranges
Penny Auctions Comparing apples to oranges
After reading this account of traditional style penny auctions and doing a comparrison here is what you will find once a member registers he or she receives free bids to get aquainted with how the auctions work if a member decideds to purchase bids, the member places his bids and here is where the simularity ends, if the member does not win the auction his purchased bids are returned to the members account , this policy continues until the member wins an auction.
For example, an auctioneer, make a gadget for $ 100 at auction in a system that costs $ 1.00 per bid. Each bid increases the auction price of $ 0.10. Let 's say that the starting price of the auction $ 1.00, and the final ( "win ") bidder wins the gadget at a price of $ 25.00. Order of $ 1.00 to $ 25.00 in increments of $ 0.10 requires 240 offers. Each bid of each bidder at $ 1.00. Thus, the auctioneer bids for $ 240.00 plus $ 25.00 for the sale of the subject, received a total of $ 265.00. Assuming that the auctioneer paid 90 $ for the gadget gross profit is $ 175.00. However, we do not know what the customer acquisition costs to run an auction, so that even those high profits at auction can not seem to have a profit.
The bidder who had placed the last bid ($ 25.00), by at least $ 1.00 to spend for the offer, and $ 25.00 on a gadget that acquire 100 retail, $ 00. He may have spent more money before the tender invalid. All other bidders, the bids submitted earlier spent $ 1.00 for every offer they placed before the auction winner and went with nothing material.
In recent years appeared a number of successful sites that link to this model, which they call a rule "penny auctions ". In general, consumer electronics such as cameras, laptops and MP3 players are sold. Commandments, the U.S. dollar cost 10-25c each (50p or Swoopo.co.uk, $ 1 and up to 1.50 on Winners24.com MadBid.com GBP) swoobug.com, any increase in value last bid of 1 - 2c (or 1s) and the enlargement of the auction for another 10 seconds or more. For example, sold for 50 pence bid4vouchers.co.uk offers Colombia, increasing the price of a penny. This means that anything more than 1 / 40 of the RPP is selling a guaranteed profit. Any item that is sold, the EIA actually sold at a profit 4.000%. Conversely, an item that sells for 1c clearly a loss of what the site should pay for the product - it is generally accepted that the sites "drop ship's article [1] Perhaps the most famous examples are Tenderosity .. com , bid4vouchers.co.uk, bidray.com and gozila.co.uk bidstick.com, with dozens currently in force. [2], the real possibility of people who spend a lot of money sites without profit or spend more than the sale value the thing where they finally won a series of posts and articles and critical analysis of the model appeared. [1] [3] [4] [5] Other products to be made of the concept as a fun and innovative form of auction. [6] [7 ] [8] A programmer, Andy Garcia, and Rupert Elder, a graduate student in economics at the University of Warwick tried "Game " and Gozila MadBid, but not all auction sales to win before the experiment was terminated [9].
Although Penny auctions with real money to have much in common with lotteries and other games appear, they seem to not be regulated as such. Bidrivals.com for example, works in Malta, offers legal advice for an explanation of why it is not a lottery
Discounts for purchases more bids.
The main risk of the site plan fee tendering is that it is misunderstood as an auction regularly. [Edit] unsophisticated participants do not understand the difference between a regular auction and pay by auction, and could use discretion in poor attendance. This distinction has the side effect of pollution of the Internet advertising with ads when a customer is no longer between regular stores or auctions traditional compensation from the auction sites. Consequently, the value of advertising on the Internet and price comparison sites are reduced.
For example, an auction site tax scheme put an ad on Internet advertising "A new PS3 for $ 80.35, " [edit] misleading to suggest that a new PlayStation 3 is now available to anyone at this price.
Auction sites charging system also operates the sunk cost fallacy is endemic in the human psyche. The error causes the player psychologically feel that the past progress of a scheme offers Thu affects control future behavior, so biasing the increasing efforts in Paris.
Some auction houses tax plan provides for automatic agents that automate the creation of "Offers ". These are funds so that they look like the types of bidding agents (eg PhantomBidder) on auction sites like eBay uses marketed. But in practice, this means facilitating rapid investment of Paris by the unsuspecting major players could not understand how the competition, they take part in the works. [Edit]
Because auction sites charge of arrangements in a legal gray zone, there is little or no enforcement of the rules to be verifiable. [Edit]
As with any auction site, there is no protection against the practice of bid shilling, where the auctioneer uses a puppet to offers in the offer to make. This practice is illegal in legitimate auctions, but is particularly damaging in auctions bids charging system. [Edit] Because of the risk of shilling, even after players have a lot of money spent to buy "Offers " in the auction, can rob a player winning bid, the auctioneer also by an additional supply of it. To protect against the risk of shill bids, the best practice is only known to use that Web sites disclose their many years of management, investors and other company details. [Edit] These sites are not readily reveal that runs the site, complete with contact information should be avoided.
As the benefit is achieved through the tendering costs, the costs of participation can not be refunded. In addition, as appear at any site, sites, tender fee and can disappear quickly, so it could bid for a site fee will appeal rights can disappear for several auctions and tenders prior to award. [Edit]. But in August 2009 began a Swoopo "Swoop-it-now ", which allows all bidders lose their offers rejected a purchase apply. This would significantly change the business model is by reducing the risk to the bidder.
Since the webmaster is the only one who can see the offers, it is also the webmaster of the item itself, unfair to the other to recognize but hard to bid would be possible. But it would be illegal and again bidders may only bid on sites operated by long standing reputable company to protect.
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