A few weeks ago Facebook carried an advertising campaign for a business called BidPax, a so-called penny auction site. Briefly, you pay BidPax for bids to be placed on their auctions. Each bid costs about $.70. When an auction starts, bidders use their pre-purchased bids. Each bid placed increases the price of the item being sold by one cent and adds 10 seconds to the duration of the auction.
Obviously, anyone who wins such an auction appears to get the item at a huge discount — provided they are prepared to forget that each one cent bid cost $.72. However, even allowing for this, the history of auctions on BidPax suggests that the winning bidder is indeed saving huge sums when compared with the recommended retail price of the items won.
Being an adventurous type I thought I’d have a go and initially placed a few bits of interesting items without any success. But even at this stage I was a little suspicious. Additionally, I realised I was in a situation that if I did not win an auction fairly soon, I would end up paying more for the item I won that it was worth. Accordingly, I decided to ensure that I won the following auction.
I stocked up with bids, logged on in two different browsers, and settled down to win an auction. For five hours, without a break, I battled with somewhere between 10 and 20 individual bidders all appearing to be as determined as I was to win the auction. Between us we took the price of the item that I was bidding on to nearly 10 times the highest price I have seen on any item sold on BidPax! Then I took a 10 second break.
You guessed it … all but one of the other 20 bidders who had fought valiantly to win the item over a marathon five-hour auction also took a break at exactly the same moment and the auction was over!
Since then I have closely watched a number of auctions run by BidPax. Now, I can readily recognise genuine bidders and I can identify the BidPax fake bids almost without fail. I can predict with absolute certainty who will not win an auction. Hint, watch for the bidder who is always outbid (by a seemingly endless stream of new bidders) at exactly 2 seconds before the auction is about to end! It’s like watching tag wrestling with your team being one member strong and the opposing team having 20 or more members.
In all likelihood, BidPax is a giant scam — the only winners on their auctions are themselves (or rather their “bidbots”) and auctions continue only until there are no genuine bidders left.
Think about it, a recent auction “sold” a lucky bidder $600 cash for $0.31 … in other words BidPax received $22.63 in exchange for $600. A few minutes later they “sold” a $2,300 MacBook Air for a total of $301.49
And think about it some more… The supposed winner of the MacBook paid less than $80 for a $2,300 state of the art MacBook. Good deal you say. But, why did all of the other 5-10 bidders stop bidding when they had only risked about $40 each. In other words, about 8 people supposedly decided, in the same 10 second window, that they would rather spend $40 on nothing, than buy a $2,300 notebook for $40.72
Apart from a couple of Google Adword advertisements, BidPax have no other visible source of income. So if they are genuine, they are haemorrhaging cash at an alarming rate.
Having written this post I have to publish it, even though it is going to tell you that I’m so gullible that I’m genuinely surprised that I haven’t actually responded to the “Nigerian Email Scam”, how embarrassing!
A few additional points…
- The BidPax domain was registered, for one year only, a few days before the Facebook advertising campaign started
- BidPax is reported to be a Hong Kong business, although its IP address is in Singapore
- their name servers are on the same network as their primary server
- they have a single mail server, on the same IP address their auction site
- there is clearly some connection with ipennyauction.com which claims to be off-line due to licensing restrictions related to Australia (from an Australian IP address, ipennyauction.com looks identical to BidPax.com)
- browsing to ipennyauction.com using a proxy, results in a site similar to BidPax which claims to be off-line due to beta testing and promises to be online “again” in December
- the owners of ipennyauction.com have chosen to register the domain name using the Godaddy proxy registrant, ie you cannot find out who owns that domain
As I said, beware
