Bitcoin Forum

So, have any of you heard of the website Beezid.com?  It's an incredibly intelligent business scam site where people pay for bid tokens for auctions.  You can bid on any auction you want, but you lose a token each time you bid, so you must continually buy more tokens if you wish to bid more.  Bid tokens normally cost about $1 each, but there are auctions in which you can use your tokens to bid on a package of bid tokens in hopes of getting them at a discounted rate.

Furthermore, auctions start out around $0.01, and most auctions only increase $0.01 per bid.  Every time a new bid comes in, the auction countdown clock increases, to give other bidders an opportunity to win.  When the timer runs out, the winner pays the final auction price.  So, typically you see ending bid values like this:

iPhone 4 sold for $57.40
$300 gift card sold for $22.13


and so on....


But if you really think about it, beezid is making crazy money on each auction.  If the bids start at $0.01, and only raise $0.01 per bid, and the bids cost about $1 per, beezid made the following:

iphone4:  $57.40 = $5,739 (in bid tokens) + 57.40 = $5,796 (gross)
gift card:  $2,212 (in bid tokens) + 22.13 = $2,234.13 - $300 (purchase cost) = $1,934.13 net


Am I understanding this correctly?  This is basically like glorified gambling, right?  If the business model works how I think it does, it is absolutely brilliant.  They must be making a ton of money.


Any thoughts?

Nobody, huh? 

I guess I must be the only one completely floored by this business model =P

If you're the person waiting until the very last second to bit, then you might come out ahead. I can't imagine why the price would even go up until that point, except for the "stupid" users of the site.

It's a brilliant business scam really. The people actually buying the stuff can't complain because if played right, they'd pay X + $1, where X = ending action price. The site makes a shit ton of money off the bids, and the people who are losing the scam are the ones trying to bid early. I can't see any reason why anyone with any sense would bit until that last second, though.

I've seen sites like that before. Scamming the mathematically challenged, is what they're doing. The cost of making another bid is always lower than the cost of leaving your tokens and walking away with nothing. There's no way to tell they aren't artificially raising the price on you / extending an auction you would have otherwise won. The winner's crap is paid for many times over by the losers. It's disgusting.

thats whats so stupidly crazy about the site, people do wait till last second but every time you bid the time increase like 10 seconds or something so someone else ups the time after that etc...

Absolutely.  In fact, I'd bet the farm that beezid is using bots to artifically increase the bid price.

Oh, and like the last poster mentioned, people do wait until the final moment to post, but with clock extensions, you can't snipe an item like you can on Ebay.  The extender is a critical piece to ensure more money.

I wonder what would possess people to believe they could actually come out on top there.

When ever I see an auction site with bid extender I steer well clear of it.  Even if it had no other bad things on the surface, the bid extender is a gigantic red flag in my book.  On Ebay I only snipe, I never bid before the last few seconds.

I can't imagine why. The whole selling point is that the selling prices are so low. That's like a casino cheating -- why bother?

You can't snipe on eBay anyway. It doesn't work. All sniping does is make you pay a higher price because the apparently low price towards the end of the auction draws more snipers.

But you're absolutely right that the bid extender is critical. Unlike eBay, the way beezid works, sniping would work. They need to keep active bidding as long as possible.

Look at all the pyramid schemes here.