This is an Internet Marketing blog – and if you want to make a huge amount online, very quickly, this is a pretty sweet business model. If you have morals on the other hand, you might be less inclined to give this model a go. For the sake of education, and because it’s a rather interesting case study, I’m going to give you my opinion in this mad bid review.
In my opinion… Online Penny Auctions – such as the ones on MadBid.com – prey on ignorance. Bidding in these auctions is gambling, at best, and that’s only if you actually understand what’s going on.
While at first getting a Macbook Air for £26 might sound like a steal, things are not as they seem. Strictly speaking it’s not theft, but …in my opinion… it’s not far off. Unfortunately it’s actually the bidder getting screwed, and the auction house getting the bloody good deal.
1. To place a bid on an auction you need to buy bidding credits. These will cost you between 75p and £1.50 each, depending on how many you buy.
2. When you place a bid, the price of the auction goes up by 1p (this has cost you one bidding credit)
3. When a new bid is placed, the auction countdown re-sets.
Essentially all Mad Bid are doing, it revaluing the currency to make the deal sound better than it is. £1.50 is suddenly 1p, 15000% deflation!!! And every bidder is paying for the item regardless of whether or not they win.
Even if you win, you still need to pay whatever the auction price has risen to!
The sales pitch is absolutely golden:
Audi A3 for £514.63
£50 Asda voucher for £0.91
iPhone 3GS 32GB for £9.67
These are actual prices of auctions still taking place on mad bids, review these prices with the re-valued currency in mind and things aren’t looking so peachy.
Audi A3 (RRP £16,320) for between £38,597.25 and £77,194.50
£50 Asda voucher for between £68.25 and £136.50
iPhone 3GS 32GB (RRP £538) for between £725.25 and £1450.5
Why aren’t online penny auctions like Mad Bid reviewed by the same people responsible for regulating gambling? The opportunity for false bidding is rife, and the chances of winning are tiny!
The chances of winning with each bid are: (End Price x 100) to 1. If the end price is £56.60, each bid has a 1 in 5660 chance of winning. You’d be better off at a poker machine…
In theory Mad Bid could:
1. Fake bid if the auction hasn’t hit ROI yet
2. Fake bid to perpetuate auctions into peak bidding times… but wait, they don’t have to…
One thing that really pissed me off about this business model is that auctions don’t stop if the bidding time expires without somebody winning. The Audi A3 auction had been paused for several hours when I woke up this morning… While its understandable from the business’ perspective, it completely shits on the bidders.
And another thing that pisses me off, is that the last person to part with their bid, effectively winning the auction, still has to pay the bloody auction price.
The conclusion of this Mad Bid Review is entirely my opinion… and in my opinion Mad Bid Auctions, and penny auctions like them, are scams! They should be regulated at the very least, and the cost of bids should be reflected in the auction prices more accurately.