Monday, November 01, 2010

Bidrivals - caveat emptor

The latest variation of Telebid/Swipebids/Swoopo is now advertising on Facebook, called Bidrivals.

It's pretty much exactly the same as the others in the way it runs. You PAY for bids - 40p a pop, basically - whether you win the auction or not. This is the absolutely crucial difference with a proper auction. A quick look suggests that each bid that is received increases the price of the item bid for by just 1p, and increases the time available for the auction by 10 seconds. The effect of the price increment being just 1p means that the sale price stays lower for longer, encouraging more people to bid.

As with the other such websites, I would like to point out that this is NOT LIKE EBAY! Imagine a gadget - say a 21.5" iMac, as is at the top of their list at the moment - that eventually drops at £100. Assuming the starting price is £10 (for the sake of argument), that represents 9000 bids. At 40p each, that is £3600 in payment for bids. You may be the lucky winner and get the computer for the price of one bid plus £100. But there are a huge amount of losers who spent money and have nothing to show for it - and statistically, you are much more likely to be one of them. And the real winner is Bidrivals, who got loads more in payment for bids than the computer was actually worth. This is not an auction site! It's gambling. And as with all institutional gambling, the game is massively loaded in favour of the house.

One small concession Bidrivals have apparently made to real auction sites is a "Buy it now" option. This invites you to buy sell some of the items at what is roughly market price. However, it is also calculated to deceive. When you look at the auction price of (say) £100 creeping slowly upwards, and a "Buy it now" price of £999, the pressure to gamble on the lower auction price becomes even greater.

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