QuiBids Penny Auctions Tweet
Is QuiBids a penny auction site? Or something much more?
Auctions on QuiBids number in the thousands every day, and since each one has a winner, that means that there are a lot of people buying products from QuiBids at discounted prices. So how can QuiBids be legit if it's one of those penny auction sites?
The short answer is that QuiBids is a rare exception to the rule that all penny auction websites are scams. But who set that rule? And what makes QuiBids so special?
Penny auctions' problems
Put simply, penny auctions are websites where customers cast non-refundable bids in auctions which increase the final auction price by a small, set increment. The last person to have bid when the timer expires wins the right to purchase the product, which is typically priced much lower than its retail price.
News outlets all over kicked the term "penny auction" around in 2009 and 2010, and not without good reason. Before QuiBids, penny auctions didn't offer any sort of insurance on purchased bids and many of them were run by affiliate marketers who hadn't developed proper business plans, according to Nicholas Boccio, who runs PennyBurners.com, a blog that covers the penny auction industry.
"I've spoken with 200+ penny auction site owners on the phone over the last three years," Boccio said. "Every single one of them, with several exceptions, have failed."
The reasons for their failure are varied, but Boccio noticed recurring themes: The inability to practice proper accounting, a general lack of business knowledge, not enough startup funding. These hindrances and others led to customers waiting weeks (or even months) to receive products they'd won from penny auctions, and some didn't even receive their prizes at all. Many penny auctions declared for bankruptcy and crumbled under lawsuits.
Some even resorted to questionable or fraudulent tactics, like employing people -called shill bidders- or installing bots -programs that bid automatically- to drive up the bidding in auctions.
"I've personally either written a letter or contacted consumer protection or the secretary of state for the state the [penny auction] is in on five or six different occasions," Boccio said. "I've directed other people who've felt that laws were being broken [to do the same] at least a dozen times."
Furthermore, news outlets stigmatized the term "penny auction, " skewering the public's understanding of just how the service works.
"They were comparing penny auctions to eBay," Boccio said. "That was their first mistake. They looked at eBay -which doesn't add time after every bid was placed- and compared that to what penny auctions were doing and concluded that penny auctions were wrong. But anybody who's been to any sort of real auction knows that's just how auctions work."
QuiBids - a penny auction, plus some
Boccio qualified QuiBids -which began hosting auctions in October 2009- as more than just the exception to the rule, but the industry's trendsetter, initially thanks to its Buy Now policy that lets customers purchase a product they lost in an auction, less the value of the bids they placed.
"When QuiBids opened and everything had a Buy Now, you saw a lot of other sites copying that," Boccio said. "QuiBids completely changed everything … [it] quickly became the standard for what a penny auction ought to be in that the value returned to the customer was much higher than all the other penny auction sites, and the risk was lower because everything had a Buy Now."
The universal Buy Now policy sparked growth in the Oklahoma City-based company, which expanded to employ about 150 people by 2011, a fast climb for what began as a six-person operation. Similarly, QuiBids elevated the possibilities for penny auctions by incorporating elements of gamification (like QuiBids Badges earned for demonstrating expertise in bidding and QuiBids Games to win Voucher Bids) and widening its scope of available products by giving customers the ability to choose from a list of possible prizes in a single auction, should they win an auction or Buy Now.
Boccio said that QuiBids -which officially designated itself as an "entertainment retail auction" last year to distinguish itself from the negative connotations attached to the less desirable term was justified in the name change from "penny auction." "QuiBids is really the model of what everybody else should be doing," he said. Bob Manista, president of the Better Business Bureau Serving Central Oklahoma -which certifies QuiBids with an A-minus rating - agreed that the new distinction was "a smart move," saying "there's a level of fairness at work in QuiBids auctions that doesn't appear to be a concern for its competitors. QuiBids is proactive, not reactionary, and its pioneering management appears to have maintained a philosophy of breaking new ground while covering all the bases; a difficult balance to maintain for any growing business."
Where to go from here?
The history of QuiBids and penny auctions is tangled and messy, but the company looks forward to building off the old penny auction model it started with in 2009 and grow into a larger, more comprehensive e-commerce site where customers can choose between bidding on products and purchasing them outright. Now much more than just a penny auction, QuiBids is all set to continue to deliver big wins and quality products into the future!