Fancy a car for under a tenner? A Nintendo Wii for less than £1 or a £300
Harrods voucher for 92p? Savvy shoppers are snapping up such bargains as the
number of internet auction sites proliferates.
Some websites have seen a 50% jump in users each week as consumers try to beat
the economic downturn, cut costs — and get Christmas presents for a snip.
“Reverse auctions” — where the winner is the one who places the lowest bid —
is one of the biggest growth areas and can yield the best bargains.
Brad King of price-comparison site compareandsave.com said: “Reverse auction
sites can provide consumers with big savings. These types of sites are
likely to continue to increase in popularity in coming months as consumer
spending slows.”
Here, we look at where to go for the best auction prices on a range of goods —
and disclose the winning tactics:
NEW CARS
Cars are big-ticket items, but online auctions can shave thousands off list
prices. Autoebid.com, the reverse-auction website for new cars, saves buyers
an average of 24% — about £3,000 — from the list price.
One buyer picked up an Audi A8 sports saloon with many added extras for
£82,290 — £18,010 below what it was worth, and the largest saving the
website has yielded.
Users agree to buy a model at its maximum price. This includes 12 months’ road
tax, delivery to your door, a full
manufacturer’s warranty, breakdown cover and Vat. Dealers then bid the price
down to win your business.
Autoebid, which attracts more than 100,000 unique users per month, charges
£100 plus Vat if the total saving is less than £1,200 or the car is worth up
to £29,499; £295 plus Vat if the purchase price is up to £29,500; or 1% plus
Vat for purchases of over that. There’s no fee if all your conditions aren’t
met. You can also part-exchange your old car as part of the deal.
Madbid.com, meanwhile, sold a new Mini One for £6.83 — against a retail price
of £12,135 — in September. The website, which went live in February, has
also sold a 50cc Kymco scooter, worth £999, for 32p.
It, and sites like it, cover the cost of the goods — sometimes bought at
preferential rates from suppliers — and a profit margin by charging people
to make bids. The average MadBid spend is about £10 per lot.
TECHNOLOGY
Madbid is not a reverse auction, but one in which goods start at nothing and
bidding rises in increments of 1p for a fixed period.
Recent lots sold include a MacBook Air laptop — which costs from £1,299 on the
Apple website — for just £18.89, and a TomTom One satellite-navigation
system, worth £129.99, for 10p.
You can bid online or by text message. It costs £1.50 plus operator costs if
you bid via text or up to £1.40 a bid online. Online users must buy bids in
bundles. The more you buy, the cheaper the bid price: a bundle of two will
cost you £2.80 (£1.40 a bid) while 500 will cost you £375 (75p a bid).
New users get three free bids when they register. The website has seen a 20%
jump in users in the past month to 3,500 a day.
The average saving on high-street prices is 98%. Madbid has also introduced
“Bid4Free” auctions, where you only pay the closing price if you win,
although savings tend to be lower at 41%.
ENTERTAINMENT
Bidandclick.com, a leading auction website in Italy, France and Spain,
launched in Britain three months ago, and is witnessing a 50% jump in
registered users each week. It has since sold a range of goods — including a
£5,200 Rolex watch for just £43.01 — but most of its wares consist of
computer consoles, iPods and televisions.
A Samsung flat-screen TV, worth £1,250, sold for just £16.31 (a £1,233.69
saving); a Play Station 3, worth £300, sold for £1.62 (a saving of £298.38);
an iPod Touch, worth £289, for 55p (a £288.45 saving); and an iPod Nano for
40p (£149 on the high street).
On this site, the successful bidder is the one who places the lowest unique
bid — the lowest bid to 1p that hasn’t been made by anyone else. The bids
are blind, but you do receive the ranking of your bid compared with others —
giving you an idea of where the lowest unique bid might be.
You need “credits” to bid, and these cost up to £1 for 100, but are cheaper
the more you buy. Users get 200 free credits when they sign up and 500 for
enlisting a friend.
The number of credits needed to bid varies from 100 to 200: last week, it cost
100 credits to bid on a cordless keyboard worth £50 and 150 to bid on a
Canon camera worth £600. You can also bid for credits: 100,000 credits
(worth up to £1,000) went for 70p.
MadBid also sells entertainment goods: for example, a Sharp 32in flat-screen
TV, worth hundreds of pounds, was bought for £4.33 and a Nintendo Wii, which
retails at £179.99, for 92p.
SHOPPING AND GIFT VOUCHERS
Vouchers for supermarkets, travel firms and petrol can also be snapped up at
online auction.
Humraz.com, for example, sold a Harrods gift card worth £300 for just 92p.
Launched in April, it has more than 8,500 users. Humraz operates a reverse
auction model — so, again, the lowest unique bid wins — but does not charge
per bid.
Instead, it charges per seat. Each user can only buy one seat, and for that
they receive a set number of bids. There are a set number of seats, too,
designed to ensure each lot sells for less than 5% of its value.
The auction only starts once the required number of seats have been sold to
cover costs and overheads, including the website's profit margin. This means
sellers can get a guaranteed price for their lot.
After making a bid, the website tells you whether or not your bid is unique
and the direction of the current winning bid, relative to each of yours.
Humraz is selling seats, at £40 each, for a £5,000 travel voucher and a £5,000
gift certificate for Orient Express rail trips and cruises. It is also
selling seats for gold and property auctions.
Other auction websites list vouchers too: Madbid last week sold a £200 Asda
voucher for £1.72 and a £50 Tesco giftcard for 42p.
HOW TO WIN
Looking at previous auctions can be useful. Some bidders on “lowest unique
bid” sites, like Bidandclick and Humraz, endeavour solely to place a unique
bid. If they know their bid is unique, though not the lowest, they then know
they will have to bid down. A common tactic is to place several bids moments
before the auction ends to try to knock out lower unique bids.
Also if a lot has a value of £1,000 and each bid costs £1, you might think it
worthwhile to place 200 bids from 1p to £2. This would mean you had spent
£200, in effect blocking all the low-range bids and increasing your chances
of walking away with something worth five times as much. Accomplished
bidders usually test auctions by placing a few strategic bids.
Strategies to win at auctions where the highest bid wins are, of course,
different. Madbid highlights three main tactics: wear other bidders out by
always bidding on top; sit on the sidelines and bid in the last few seconds;
or use a random bidding strategy. Decide in advance the maximum number of
bids you are willing to place — and never break your own rule.
How reverse auctions work
There are two main types of “reverse auction” — one where the sellers bid down
to compete for your business and another where buyers compete against each
other, with the winner being the person with the lowest unique bid.
Here, you buy “credits” or “seats” to make bids. You can start bidding at any
price you want, in increments of a penny. You could start bidding for an
item at, say, 6p — the website will tell you if your bid is the lowest
and/or unique. If it is neither, you will need to bid up. If it is unique,
but not the lowest, you could bid down — or just see if the status of your
bid changes as others bid.
The person with the lowest unique bid when the timed auction ends is the
winner.
HAPPY MOTORING
My £6 Mini was a dream come true
Telecoms engineer Sandeep Anantharaman couldn’t quite believe his luck when
he snapped up a brand new Mini One car for little more than loose change.
The 26-year-old, from Watford in Hertfordshire, bought the shiny red car
for just £6.83 — a far cry from its list price of £12,135. He drove away
with the bargain in September — a month after passing his driving test. He
had made 24 bids on madbid.com, an
auction site where bids rise in increments of 1p. They cost him £1.20 each —
a total of £28.80.
“Wow! Is it really me? That was my first reaction when I won,” he said. “I
had to pinch myself to believe that it wasn’t a dream.”
Anantharaman has also bought a Tom Tom satellite-navigation system, worth
£120, for 10p and an iPod Shuffle, worth £32, for 6p on the site.
He warns that a rise in interest is making it harder to win. “There are
more people bidding, so you have to play more tactfully,” he said.
Auctions lasts two to seven minutes, but can be as short as 30 seconds.
When a bid is made, the timer restarts.
