Abstract
Given the string of bankruptcies of penny auction websites over the past two years, we use empirical data to investigate whether QuiBids remains profitable. Although profitable on an auction-by-auction basis, penny auction sites have problems retaining users. In order to alleviate this problem, QuiBids has implemented a Buy-Now system, in which losing bidders can contribute money they already lost in the auction towards the purchase of the item at a slightly inflated price. We find that QuiBids makes only limited profit after accounting for Buy-Now, but is able to remain profitable due voucher bid pack auctions. We also show that a large proportion of QuiBids’ revenues come from experienced bidders, suggesting that rules designed to promote consumer retention may be working as intended.
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Notes
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We are assuming the Quibids’ procurement price equals the retail price here, which was usually the case in the early days of penny auctions.
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A Appendix
A Appendix
(See Fig. 6)
The 25 items we used to estimate the average value price markup. These data were collected in April of 2012, mostly from Amazon, but when unavailable, from the good’s primary retailer.
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Greenwald, A., Sodomka, E., Stix, E., Stix, J., Storch, D. (2014). An Empirical Analysis of QuiBids’ Penny Auctions. In: Ceppi, S., et al. Agent-Mediated Electronic Commerce. Designing Trading Strategies and Mechanisms for Electronic Markets. AMEC AMEC TADA TADA 2014 2013 2014 2013. Lecture Notes in Business Information Processing, vol 187. Springer, Cham. https://doi.org/10.1007/978-3-319-13218-1_5
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DOI: https://doi.org/10.1007/978-3-319-13218-1_5
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