What is a dime auction? Well, that means that you can bid on items by 1 nickel increments which is obviously within an indivdual's budget. No wonder that Quibids, Beezid, and the likes, have gathered record amounts of customers in a short schedule. The main reason for this uprising is probably that if you win with your dime bid, you will end up saving about 90% on new retail items such as Apple iPads for $20 (retail is $500 and up), Samsung LED 55" flatscreen 3d Television for $60 (retail is $2, 000), etc...
Although it seems too good to be true, it is very real. The organizations can be sites actually bring in a lot more money than what they investin the new items. This is because customers have to buy the right to bid, on Quibids, a package of 100 tenders is worth $60, that is 60 cents per bid. So if you placed one bid and won the ipad at $20, you will actually spend $20. 60 on the item.
No big deal right? Let's ab crunch the numbers. First, let's note that unlike ebay, these sites do not have a certain end time on deals, every time an item is bid on, time is added to the timepiece
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. The auction ends when nobody posted a bid for say, 10 seconds. That basically means that everyone has the same probabilities to win the item. On that note, let's take the example of the ipad that went for $20. Starting the auction at $0, it took a total of 2, 000 1 nickel tenders to get there. If you bid once, the probability to win this auction is simply 1 in 2, 000. Of course, you can increase your probabilities by organizations can be repeatedly, 100 tenders gets you to 1 chance out of 20 but you will then have spent $60 + $20 with a 5% chance to get the item. Meanwhile, the website will receive 2, 000 times 60 cents for the item no matter what, that is $1, 200! Since the item costs them only $500 and the auction winner will still have to spend the final $20 bid on it, the website will make a staggering 144% profit! This is true on every item, every day, with the minimal facilities that is included with an online business.
It is actually a mystery why such methods are legal because if you sum it up, all they are, are online lotteries. Tenders are proposition wagers and your probabilities depend on the money you spend. It is important for the "customers" to realize that the dollar value of an item that is bet on does not represent anything, it is a trick to attract more people and make them think that they can get a good deal. In reality, you can forget about the status of the "auction" and just think of it as a lottery which is why each ticket is worth 60 cents. At the end of the day, you can either get lucky, walk away, or get caught knowledgeable and keep playing the odds. Very much like at casinos, you will then end up losing much more than what you are winning. My advice: try it a few times, then go to your retail store and pay face value..
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