Does QuiBids make excessive profit on their auctions?
How much profit does QuiBids generate?
Our goal is to provide customers with entertainment and great deals while also being fair and transparent. As part of that commitment, the QuiBids 101 section will feature a number of articles that detail how the company works and how that affects our customers. We’re committed to building our company the right way – by taking good care of the customers who continue to shop with us.
A Common Question
One of the largest misconceptions we face is that we’re turning large and even excessive profits on the auctions we run. Currently we operate on a net profit margin of around 5%-10% each day. For comparison purposes, Wal-Mart reported a net profit margin of 3.5% in its most recently reported fiscal year.
Some wonder how that’s possible, when an iPod Touch can prompt as many as 1500 bids in a single auction. Let us explain.
The most common misunderstanding about our business model is that only one product is won per auction. The reality is that customers often choose to exercise the “Buy Now” feature, which means that multiple items are sold every time we host an auction.
What this means is that the iPod Touch that had 1500 bids placed on it might have led to one auction winner and, say, seven customers choosing to “Buy Now.” Because we incur business costs for dealing with these seven other purchases, this drives down our profit margin. This downturn is part of the cost of providing good customer service, which we are always glad to provide.
QuiBids Loses Money on Many Auctions
QuiBids takes a loss on about half of our auctions on any given day. Although we often don’t make as much money as it seems on very competitive auctions, we do take very real and material losses when auctions do not generate many bids. Much of the profit from profitable auctions goes towards covering the losses from the unprofitable auctions.
The Costs of Doing Business
In addition to the costs associated with supporting “Buy Now” and our unprofitable auctions, QuiBids does incur plenty of expenses common to any business: marketing, office rent, and customer support just to name a few. Here are two significant facts about these areas of expense:
1. QuiBids offers support during typical business hours.
2. QuiBids offers a no-questions-asked refund policy for unused bids.
What It All Means
As QuiBids continues to grow in popularity we’re committed to keeping our costs and profits as low as possible so that we’ll continue as the leader in entertainment shopping. We really appreciate our customers and are excited about the company’s future!
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Got a question? We’ve got answers. For simple solutions, check out our easy-to-access Help section. For stickier situations, connect to Live Chat or submit a support request below.
how long are you in business?
We launched in October of 2009.
Are any of your employee's hitting on any of the auctions? It just seems that if the bidding is low it may be in your better interest to keep the bidding up; doesn't cost you anything to click where it costs us $0.60 each time. It just seems a little off sometimes. I know, paranoia will destroy ya. Just a question I had to ask. Will you be honest?
Thanks for asking, and no, we absolutely do not bid on any of our auctions. It is against our policy at QuiBids. This is highly unfair to our users and we want everyone to have a fair and fun experience on our site w/o having to worry about that. We pride ourselves on moral, ethical business standards and hope that providing user testimonials and other PR efforts will make that a little more clear.
Jill, First, kudos for answering all the questions from folks too lazy to read the article at the top of the page or any of the other excellent info on the site. Second, I just wanted to say the article at the top of page is excellent. Well-written and transparent. I hope you guys do very well with this business model, make a ton of money, and live generously. One concern... It seems that there are some similarities to gambling, with many of the same chemical releases for the user when you see another user or yourself win an item at 99% savings. Have you talked internally about how to monitor accounts that appear the user may be digging him/herself into a hole with an addiction?
Sure.We try to be as transparent as possible. To address the gambling part, that's why we offer the 'Buy Now.' This assures that no one has to walk away being out any money. We also have warnings that pop up letting people know if they're approaching the retail value of the item. But as far as an addition, we can't help peoples' behaviors. We are all responsible for our own actions. We encourage people to play, have fun, but to bid wisely and know when to stop.
How are the shipping charges calculated?
Shipping is calculated by averaging our cost to ship a certain product over the last week and then we round off to an even dollar amount to be less confusing for our customers.
As suggested, I've done my homework and now I have a question. It appears that your "retail market value" prices on a large number of products are typically higher than can be found if the identical item is purchased from a "retail" (not discount or auction) e-store. Please explain how QuiBids arrives at the retail market value. Thank you for the forum to ask questions and your commitment to transparency with your customers.
The retail value of our items is determined by the cost of obtaining these products. We do not purchase our products wholesale or in bulk. All of our items are ordered through vendors; because of this there are times when we have to apply a slight markup in order to cover ordering costs. In larger auction (auctions for pricier items) many users choose to use the Buy Now option so that their bids do not go to waste. We do not profit from˜Buy Now™, as our profit is earned through bid revenue. This markup, therefore, helps to cover these ordering costs. If we did not do this we would not be able to maintain our operations, or provide such amazing deals on products.
The model isn't quite as simple and profitable as you would think at first glance, and we should thank QuiBids for allowing the Buy Now option (which you don't see ANYWHERE else), and for stocking items that on average probably cost them money just to offer. So thanks!
Are you located within the United States and if so which state is your home base?
We are located in Oklahoma City, Oklahoma.
correct me if i'm wrong,If i win a bid i pay that price ,plus all the bids i had placed,now if i placed 100 bids on an item then decide to buy now i pay the retail price of the item minus the price of my 100 bids ? thanks for your answer.
That is not correct. If you win the auction, you only have to pay the final auction price (plus any other fees that are listed in the Item Description). The bids are already paid for so you do not have to pay for them again. If you lose the auction, you can pay the difference between the item value price and the value of the bids you used in that auction. Again, you would not need to pay for the bids you used because they were already paid for prior to the auction.
I am in Australia, I don't understand how the shipping works, can you please explain or show me where costs are explained on your website, thanks.
You can find out the shipping costs by reviewing the Item Description. We list this information for your review prior to bidding.
I assume that any warranty offered on products purchased (unopened boxes) are still valid. Am I correct? I have not seen this question asked so apologize in advance if addressed elsewhere.
All products on QuiBids are brand-new and factory sealed! We recommend that you contact the manufacture to determine what their warranty covers.
How can I find out the price of an item before I decide to bid on it?
If you click on the auction title, you will be taken to the auction page where you can see the value price of the item.