|
Ok after browsing a bit and thinking about how the system works I think I've figured it out.
I watched 2 people (usernames) go back and forth placing a bid ($0.01 increments) on an iPad one after the other for like a half hour. The ending bid was $67. Why did the other person give up? Probably because they either realized theyve spent enough hitting bid every 2 seconds for a half hour paying for each bid, or ran out of bids. And when theres only 2 people going at it for an item and one of them gives up theres less than 10 seconds left and that person usually gets it.
Each bid you make is supposed to cost $0.75 so when an iPad goes for $67 it would seem as though the people running the site have made a small fortune ($67 divided by each $0.01 bid = 6,700 bids at $0.75 each = $5,025 made from auctioning a $700 iPad). BUT these people don't pay the regular $0.75 for each bid because they've bidded on 'bidpacks' of 100 or so which can usually go for like $3. So at $3 for 100 bids each bid is only costing them $0.03 and $0.03 X 6,700 bids is only $201, well below the retail price of $730 even if you dont include the ending bid price ($67). Each bid would have to average out to like $0.11 a piece in order for the site to break even. So the only explanation I could come up with is that theres enough idiots paying $0.75 per bid on it that it raises the average bid price and makes them a profit. BUUUUUTTTT, these are expert marked auctions and an expert obviously isn't going to be paying a whole lot per bid. So after thinking I've figured out how this stuff operates at a profit I'm still stumped at how they actually do make a profit lol..
|