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{{notability|Web|date=April 2011}} |
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{{Infobox Website |
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| name ='''MadBid.com''' |
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| logo = |
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| caption = |
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| url = http://www.madbid.com/ |
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| commercial = Yes |
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| language = [[English language|English]], [[German language|German]], [[Italian language|Italian]] and [[Spanish language|Spanish]] |
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| registration = Required |
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| owner = {{flagicon|UK}} Marcandi Ltd |
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| author = |
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| launch date = August 2008 |
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| Current Status = Active |
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| revenue = Not Disclosed |
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| slogan = "The Future of Online Shopping" |
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| employees = 20 |
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}} |
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'''MadBid.com''' is an online [[penny auction]] site launched in the UK in August 2008, where users buy bundles of [[bidding|bids]] and place them on new products being auctioned. MadBid.com received £4million in Series A Funding from [[Atomico]] Ventures in July 2010. <ref name=times>{{cite news| url=http://www.thesundaytimes.co.uk/sto/business/Tech_and_Media/article353090.ece | work=The Sunday Times | location=London | title=Skype founder in Mad gamble. | date=2010-07-25 | accessdate=2010-07-25 | first=Matthew | last=Goodman}}</ref> |
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==Mechanics== |
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MadBid.com is a pay-to-bid auction platform where users purchase "MadBids" otherwise known as credits in order to place bids on auctions. Bids are purchased online in bundles. Users can also bid via SMS however it is substantially more expensive.{{Citation needed|date=April 2011}} |
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Auctions run on MadBid.com are commonly known as "bidding fee auctions" or "penny auctions", a type of auction in which participants must pay a non-refundable fee to place a small incremental bid. The winning bidder pays the final bid price, which is usually <ref name=times>{{cite news| url=http://www.timesonline.co.uk/tol/money/article6839947.ece | work=The Times | location=London | title=Bidding boom on the penny auction sites | date=2009-09-19 | accessdate=2010-04-26 | first=Laura | last=Whateley}}</ref> significantly lower than the retail price of the item. Because most bidders will receive nothing in return for their paid bids, some observers have stated that the fee spent on the bid is actually equivalent to a wager. |
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Each auction has a timer which typically runs for between 15 seconds to 1.5 minutes. When an auction starts the timer will count down from its set time, when a user places a bid the timer will reset to its original time and start counting down, this process continues until no user places a bid within the specified time and then the auction will close. The highest bidder (which is the last bidder) will win the right to purchase the product for the auction close price.<ref>{{cite news| url=http://www.timesonline.co.uk/tol/money/consumer_affairs/article5061621.ece | work=The Times | location=London | title=Save thousands on auction sites | date=2008-11-02 | accessdate=2010-04-26 | first=Jennifer | last=Hill}}</ref> Users of MadBid.com can save up to 98% on RRP according to The Times. |
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MadBid.com also has a ‘Buy Now’ feature on some auctions, which means a user can buy the product at any time during the auction, and get a discount equal to the value of bids placed in that auction. |
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==Controversy== |
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Pay-to-bid auction sites often come under scrutiny and are likened to gambling.<ref name="Pennells">{{cite news| url= |
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http://news.bbc.co.uk/1/hi/7793054.stm | work=BBC | location=London | title=Penny web auctions under scrutiny | date=2008-12-20 | accessdate=2010-04-26 | first=Sarah | last=Pennells}}</ref> In December 2008 the BBC questioned whether penny auctions sites were like an online lottery following a report from a gambling expert. Professor Mark Griffiths of Nottingham Trent University commented that the [[Gambling Commission]] "should look into this". He went on to state that "I think bidding on penny auction sites is akin to a gambling-like experience" and went on to say "Obviously, when people are bidding again and again and again and they don't actually win the item in the end, that's very much like gambling." |
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In response to these claims,<ref name="Pennells"/> MadBid [[Managing Director]] Juha Koski commented that "It has been proven over and over again that being a successful bidder on MadBid.com requires a combination of skill, knowledge and judgement. Some of our users win more items than other by deploying bidding strategies that are successful." |
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The Gambling Commission said it could not comment on individual sites and was not convinced that penny auctions amounted to gambling. However, it added that it would keep a close eye on developments in this area.<ref name="Commission">{{cite | news | url=http://www.gamblingcommission.gov.uk/gf-faqs/lotteries_and_fundraising/do_i_need_a_licence_to_run_a_p.aspx | work=Gambling Commission | location=UK | title=Do I need a licence to run a penny auction website? | date=2011-03 | accessdate=2011-08-16 | first=Gambling | last=Commission}}</ref> |
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==Profitability== |
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{{Original research|section|date=July 2011}} |
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The profitability of the site can be missed by some, but is easy to explain. |
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Each Credit costs the bidder from 10p to 30p depending on current "special offer" status. |
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Various numbers of credits are used to increase the price of an "auction" by 1p. |
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Depending on the value of the item being auctioned, a bid to raise the price 1p can cost from 1 to 6 (10p to 60p) credits, or more. |
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An item that sells for £500.00 has had 50,000 bids placed on it. |
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50,000 bids at 1 credit a bid (10p) is £5,000. |
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50,000 bids at 6 "credits a bid" (60p) is £30,000. |
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An item as cheap as a £280 vacuum cleaner can be 40p per 1p raise in price, so as long as it sells for over £6 it makes a profit for the site owner. |
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This is a private company so it will be difficult to substantiate. This information should be taken as guidance rather than actual. For example users do get free credits when they join the site and many products do close at big loss. At any moment 50%-60% look they have made a loss and then few products do make good profit. One should look this as a portfolio, as the business makes loss and profit by selling a range of products.The overall aim is to keep the product portfolio profitable. |
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{{Citation needed|date=July 2011}} |
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== External links == |
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*[http://uk.madbid.com MadBid Site] |
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== See also == |
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*[[Bidding fee auction]] |
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== References == |
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<references/> |
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* http://www.unequalledmagazine.com/interviews/14182/article-madbid-penny-auctions-its-totally-mad%E2%80%A6-pt2 |
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[[Category:Online auction websites]] |
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[[es:MadBid.es]] |
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