Comparing eBay and Dubli: A buyer’s perspective
In my last article on the Dubli Network I had a look at some of the claims and comparisons made by Dubli against online auction heavyweight eBay. For the most part Dubli seem quite confident that their different styles of auction from the traditional eBay model will be more fun and benefit buyers.
These two factors are primarily what Dubli are basing their confidence in the success of their business model on.
Are buyers really better off using Dubli’s Xpress and Unique Bid auctions?
Let’s have a look.
Xpress auctions start at a fixed price and cost the buy one credit to see the current price. With each credit used the price of the item drops by 25 cents and you are shown the new discounted price. You then have the option of buying the item at the shown price or passing.
Credits cost 80 cents each so it’s worth noting that to get a discount in this model you are relying on other people to check the current price and pass on the price offered.
At an 80 cent cost to remove 25 cents from the starting price as a sole buyer you will always be at a loss.
To recoup your losses in viewing the current price of an item you will need four other potential buyers to view the item and pass on the price offered. For buyers passing puts you at a 15 cent discount. Naturally you’re going to want to save a lot more then that to make purchasing the item worthwhile.
The trouble is that with each new potential buyer the chance of you winning the auction is decreased exponentially. Whereas with the traditional auction model used on eBay you benefit from less buyers, Dubli is the opposite.
Naturally your percentage chance of being the buyer who snaps up an item at precisely when the savings are greater then your investment are exponentially decreased as more buyers flock to the auction.
This is where the catch is with Xpress. In the long term with participation in just a few auctions you don’t win, you can see just how difficult it can be to recoup your overall investment in Dubli auctions along with actually purchasing something at a discount.
If you spend $50 on credits over several auctions and don’t win anything you need to recoup that before you can truly say you got a bargain. At a 15cent discount per every four peeks at the price in Dubli’s Xpress auctions that’s a staggering 333 auction views without purchase you need other buyers to action. What’s more you then need to be the one who purchases the item to come out in front.
Winning a Dubli auction as a price drops is going to be hard enough and I’d suggest that items are bought well before the current price is discounted 333 times. If we spread out the 333 number over multiple auctions you run the risk of further adding to the amount you need to recoup and you’re also required to come out in front of more auctions.
Keep in mind if it were a simple matter to win a Dubli Xpress auction predictably you wouldn’t be trying to recoup your losses in the first place.
Unique Bid Auctions
Unique bid auctions are a little less complicated then Xpress auctions in that you don’t have to factor in the probability of someone deciding if a price is good enough for them to purchase the item or not.
With Unique Bid auctions your chance of winning an auction is simply the percentage of bids you’ve entered out of the total pool of bids.
The higher the value of an item the more chances you have of getting to the end of an auction with an unique bid. Unfortunately this also applies equally to other buyers participating in the auction too. What’s more the higher the value, at 4 dollar amounts able to be bid on in the dollar (25 cent increments in the dollar) there’s a greater potential to lose money through expanding your unique bid range too.
The positives and negatives of going for a unique bid on high value items seem to reasonably cancel eachother out.
Unlike Xpress auctions, you’re actually better off with less buyers placing bids in the unique bid model. Unfortunately you’ve got no way of knowing how many people are participating in an auction so the element of blind risk comes into play.
The same “if you don’t win an auction you are now at a loss” investment element from the Xpress auctions also apply to the Unique Bid model. With a few large value items and some broad range bidding, it’s easy to see how you could quickly wind up losing a couple of hundred dollars over a few unique bid auctions and have nothing to show for it.
For each Dubli auction, whether it be Xpress or Unique Bid there can only be one winner. Everyone else who used credits to lower the price gets nothing in return for their ‘investment’ in the auction. This means theoretically you could continue to invest money into Dubli auctions and never actually win an item.
The traditional auction method, as used by eBay carries none of this risk. If you make a bid and don’t win, you walk away without spending a cent. Seeing the current auction price is free and you’re under no previous financial investment obligation to commit to an auction seeing as placing a bid is free.
Furthermore each Dubli auction you participate in and don’t win only adds to the total amount of money you need to recuperate to get a discount on current item(s) you’re bidding on.
Keep in mind all this credit spending goes directly into Dubli’s pockets without any products exchanging hands. Dubli credits are virtual items and there is no cost associated with producing them or distributing them for sale, other then commissions paid to Dubli Business Associates. Dubli don’t have to invest any money in their credits and what’s more they actually profit by charging Dubli Business associates to resell them.
I have no doubt that the Dubli auction models were engineered to be different from the traditional online auction models currently available. Upon closer inspection however they seem to mostly benefit Dubli itself rather then the buyers participating.