Online auctions

Flicking through my list of online comics my eye was caught by an advert for an auction site; an 32" FullHD LCD being sold at £100 will do that. Now that tiny cynical part of me thought "Yeah right, special offers or it costs £300 delivery or some such" nevertheless I decided to have a quick look as well heck you never know.

The site in question is called Telebid and the way it works is quite clever (from the company's point of view). First off there are different types of auctions - the normal pay what you bid, the fixed price, the penny auction, and a night auction. I'll ignore the last two and concentrate on the former types as they're much easier to explain.

So you find something that's being auctioned, unlike eBay all the products are being auctioned by Telebid so there's no worry about paying £150 for the cardboard box an XBox came in. Once you've found what you want you bid for it by either pressing the big Bid button or by phoning a number and tapping in a code. Now here's catch number one, each bid costs 50p, here's catch number two, each bid increases the auction end countdown by about 7 seconds. Catch three there's an automated process that bids for you according to various criteria, but does so only in the last 10 seconds or so of the auction. That's where it gets clever.

Here's one I was watching, a non-fixed price auction meaning you pay what you bid, the current bid was ~£25 with 15 seconds to go, drops to 10 and pow in comes two autoBids pushing the clock back. It ticks down and pow another set come in. So although you know that the auction has to end (in this case) on 30th June just past 9am it still might end at any time before that and once the time drops to that magic 10 second mark that's when the autobidding starts and remember each bid costs 50p.

Clever point number two is that each bid advances the total by a set amount (7p) so imagine two autobidders set to bid up to £26 on this auction that'll be 7 bids each at a cost of £3.50 to increase the price by just £1. At the current time this auction stands at £46 with roughly five bidders, so assuming sequential bids each one has used 60 bids at a cost of £30. So true cost of this auction is £46+£30+£10 P& P or £86 RRP is £180 so still worth it, but it's one of those things you really have to watch how you bid. Oh just had 10 autoBids in pushing the price up to £50 and the clock to 2 minutes.

Clever point number three is that the autoBid has a start from price too, so put in that and a limit and you can at least work out the maximum number of bids you'll use. Except if it never reaches that price you'll never bid and, lovely touch this, once the 'from' price is reached you can't stop the autoBid. So put in a too high price and you won't get squat, put in too low a price and you'll whip though your stash of bids in record time.

So sit there in front of the screen clicking bid and hoping it registers in time, stay on the phone at whatever rate it is, or use the autoBid system and hope you don't run out of bids.

The fixed price auctions look good as no matter what the price the cost is still the same, except this pushes the 'bid' price higher. One auction is at £203.98 which means it's had 2914 bids costing £1,457 for an item with an RRP of £929.99. Assume that's what was paid by Telebid add on the fixed price of £69 and P&P of £39.80 and they've made a minimum gross profit of £635.81.

I'm impressed, but I doubt I'll give it a go myself, I think the cost of bids made that will lose will outweigh savings (minus bids) made on items I'd win.

Hey the normal auction just ended at £54.88 the winner used 66 bids to win (nice they tell everyone this) so exact cost was £54.88+£33+£9.80 that's £97.68 a saving of £82.31 on the RRP. Of course if the winner had tried just three times before on the same item with the same number of bids and lost they'd be down £16.69.