The web is full of questions on how certain companies (mainly tech companies) make money. The answer in most cases is very simple and straight forward, they either make their money on advertisements, sponsors, and in some cases collecting anticlerical data from users and selling it.
But here is something that blew my mind. There is a website called quibids.com, this website is in a way similar to ebay.com. There is only 1 main difference, which makes all the difference. ebay.com makes their money from the seller, and qubids.com makes their money from the users.
The way quibids.com works is as follows: The starting price for every item being auctioned is $0.00, and you can only bid a penny at a time, every time you bid on an item you pay 60 cents ($0.60). Another interesting feature they have is, every time somebody bids on an item, the time remaining for the auction go’s back up to 10 seconds. (kinda like a real auction, going once, going twice and sold!).
Overall it seems very simple and straight forward, but once you start running the number your socks will blow off.
For argument sake, lets take the following item as an example: The Apple iPad w/ Retina Display Wi-Fi 128GB – Black. The original price for this product is $799.99. If this would be sold on quibids.com for lets say $300, how much money do you think was spent on this product in total? the answer is $18,300 (yes, you heard me, eighteen thousand and three hundred dollars).
The math is very simple, if an item is sold for $300, that means their were a total of 30,000 bids (a penny a bid, 100 pennies in a dollar). Every-time someone bids they pay 60 cents.
30,000 times $0.60 = $18,000 + $300 for the purchased price equals to $18,300.
The one thing that i haven’t figured out yet is, who is making all that money.
Keep in mind that I’m not saying its good deal for the users, but it’s definitely a good deal for whoever is making all that money (quibids.com, the sellers or both). Like one of my salesman always says: A deal is always a good deal, sometimes for the seller and sometimes for the buyer. The idea is, you have a bunch of people paying $0.60 a bid, for an item that only one person ends up getting.
I’ve heard some people say that it’s a scam, I think it’s more like a gamble. If you think it’s a scam I’d love to hear why.
One last thing, before you run and sign up, keep in mind that quibids.com is gonna charge you a sign up fee of $60 (something that I wasn’t aware of when I signed up).