I stumbled across a most interesting website today – Telebid. At first glance, you might dismiss it as the usual eBay-clone fodder, but – there’s quite a bit more to it than that. See the low prices of items sold? Got your attention? Thought so.
However, there’s a catch – there’s always a catch – and the catch in this case is pure fucking genius by the site owners.
You don’t bid ‘on the item’ in the traditional sense, you’re bidding essentially for the right to purchase the item for the current highest price… And the current highest price is inflated by 7 pence every time someone makes a bid… and it costs you 50 pence to make that bid… aaaand if you’re a last-minute sniper, you’re out of luck because they extend the auction end time in the event of last-second bids. Is your interwebby ‘scam’ spidey-sense tingling now? I know mine was.
Only this isn’t a scam – it’s not particularly nice, and it leaves a lot of (foolish) people out of pocket – but people do walk away with £30 PS3′s and £50 LCD TV’s. It’s just that Telebid walk away with much, much, much more.
Let’s take an example:
Telebid are selling a Sony 17″ Laptop. It has a RRP of £799. It starts at zero, like all of their auctions, and the clock begins counting down. Anytime a user places a bid on the item, the price rises by 7 pence, and – if it’s close to the end of the auction – some time is added to the clock. This means that even though an auction might be ‘ending in 10 seconds’, it is very likely indeed to run for considerably longer, as people wait for the counter to run down to 1 second and frantically click the ‘bid’ button – thus adding extra time to the auction end.
When the auction does eventually end, the ending price is £166.39. What a bargain! What a deal! The winning bidder spent £40 in bid tokens placing 80 50p bids on the item, and has only to pay the £166.39 and a small postage charge, and he’s the owner of a shiny new Sony VAIO, and it only cost him £206.39 – a fraction of the full RRP. Well done him.
Let’s look at everyone else who was involved in the auction: In order to reach the ending price of £166.39, there must have been 2,377 bids (16639p / 7 = 2,377). Each one of those bids cost the bidder 50p. This means Telebid made in bids alone £1,188.50. That’s £389.50 more than the RRP of the laptop! Not to mention the fact they’ll get £166.39+P&P on top of that from the winning bidder – that’s a whopping £555.89 of profit on that one item. Alone!
The average IT/Electronics retailer will be doing well to make an 6-7% margin on a laptop like that – Telebid are making a gigantic 69%!
Consider that they sell 100′s of items a day, and you can soon appreciate the figures involved must be gigantic. So gigantic that they offer some items on a ‘Fixed Price’ basis – where they’ll place high-value items for auction which will sell at a fixed (exceptionally low) price (say £19 for an 80GB iPod) no matter what the auction end price – or ’100% off’ basis, where the winner only pays for the number of bids he’s placed, no matter what the auction end price is. It is entirely possible for someone to win one of these auctions with a single 50p bid – just like it is for me to win the lottery on Wednesday with a single £1 ticket. It doesn’t matter if they lose £400 on an auction lot like this, because they’ll make it up in spades on the other lots.
I’m sure it won’t take long before people work it out – but in the meantime, I’m quite sure that Telebid will be making hay while the sun shines and will be laughing all the way to the bank with bidders money. Legitimate? Sure, I guess. Ethical? Probably not. A bargain? Sure, but only if you’re really, really lucky.
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