There's been a lot of discussion recently (here,
here, and
here) in the blogosphere about Scams. It has come to the attention of many, for instance, that Farmville has some "scammy" elements in it, in particular, offering Farmville Cash in exchange for completing offers. These offers, however, may end up costing users more than simply buying the virtual cash, or users get nothing for completing the offers. It's all very shady.
Are penny auctions a scam? On the first page of a google search on 'penny auctions', you'll find this article. Uh-oh.
Penny Auctions are Not Scams
Fundamentally, penny auctions are not scams. They are a unique auction system that definitely involves risk. The reason for this is that each bid costs money, and if you lose, you might have spent money for nothing. On BidBlink, we've solved that problem: if you lose, the money you spent in bids can be applied towards purchasing the item. This makes BidBlink perfect for shopping for items you were going to buy anyway: you either win and get a great deal, or you lose and pay retail anyway.
One warning sign many customers see when being exposed to penny auctions for the first time relates to the marketing material that nearly every penny auction uses. For instance, "Buy Products for 90% off or more!" For better or worse, BidBlink also currently uses this type of language. This language is what I think convinces people that penny auctions are scams. It's just too good to be true, and so it must not be true, and so it's a scam.
Here's the truth. You have a chance to get 90% off or more on products. You can win with a small amount of bids, and we will ship you your product, and you'll get a great deal. It happens every day.
But what can also happen is you'll spend a hundred bucks in bids on a Nintendo Wii, and win, and pay an additional one dollar plus shipping. So you still got a great deal, but it wasn't 90% off. It might be half off. Our deals page calculates all of this out for you, to show you the final price paid INCLUDING THE COST OF BIDS. This is a feature that not many other penny auction sites give you -- it shows you the true costs.
And like I mentioned above, if you lose, you certainly don't get 90% off. But on BidBlink, you can apply your bids towards purchasing the item at retail price.
Finally, I want to mention that on BidBlink, we base our discounts on 10 cents per bid. In reality, a user might buy bids at 15 cents, or 14 cents, or 10 cents, or a mixture of prices, get some free bids, etc. Instead of dealing with all of the ways that a user can get bids and all of the prices associated with those, we declare that all bids are worth 10 cents, even if they're not. We give users the option to purchase bids at this 10 cent value. Some opt to do so, others not.
But what about those sites that are scams?
This industry has some shady websites in it. Luckily, I assure you that BidBlink is not one of those shady websites. But let's take a look at how easy it is to set up a scam penny auction site.
Head on over to this site where you can, for about a thousand bucks, buy penny auction software and be up and running in about a week. The problem with this company:
Never make a loss.
You decide when your auctions finish. Price too low? Use the auto-extend feature. Not enough bidders? Use the auto-bidding feature. Making a profit has never been so easy.
OH MY GOD. Seriously? This is why the penny auction industry has a bad rep.
As blatant as this is, the real problem is that it is difficult for real bidders to detect if a site is doing what is known as "Shill Bidding." It is very easy for a penny auction site's owner, for instance, to manually bid on his own items, thus driving up the price. It's also easy for an engineer to write a little "bot" which automatically does this. Of course, this isn't a unique problem with penny auctions. eBay has this problem, and it recently came out that the Domain Name industry has this problem. It's a problem all auctions experience.
BidBlink was built from scratch by myself, WITHOUT relying on any bots or the above "penny auction kit". There are no bots. No shill bidding.
Follow these folks
The good folks over at Penny Auction Watch keep an eye out on our industry. They call out the scammers. I highly recommend you head on over there on a regular basis and keep up to date. I also recommend you be careful about bidding on new penny auction websites until PAW declares them "legit". (By the way: BidBlink was declared "Legit"!)
Have fun bidding!
Well, we've just added another way that everyone wins: the BidBlink Holiday Gift Card. This one might be win-win-win-win. Let me explain:
