With Holidays looming around the corner, who isn’t looking for a good bargain? However many area families are facing enormous pressure just to make ends meet and everyone is looking for ways to do more with less. What if you could buy new expensive electronics for pennies on the dollar? While some residents still rely on traditional cost cutting measures like cutting out coupons or hunting for retail sales and closeouts a few have gone online only to find a shocking new way to save.
Meet Jennifer Wilson, a savvy stay at home mother of three and a self proclaimed "bargain hunter."
From Scams to Savings
Intrigued by this amazing story I decided to investigate penny auctions myself and see what I could discover. My researched revealed that there are a large number of dishonest penny auction sites and I felt onlyBidCactus.com met all of our Consumer Watchdog safety guidelines. When evaluating sites be sure you find out the answer to the following questions:
• Does the website have easy contact information including toll free number?
• Do they offer Live Chat and customer support online?
• Are they located in North America?
• Do they have shipment tracking?
• Do they have an up to date SSL (web security) certificate for safe transactions?
• Do they have a satisfaction guarantee?
• Do they have a return policy for auctioned items?
• Do they offer Brand New, Factory Sealed items?
After chatting with a live representative and watching the online video tutorials I felt got a basic understanding of the way penny auctions and companies work.
Why it Works
BidCactus.com purchases all of their products in bulk lots. A majority of their inventory comes from warehouse closeouts, surplus auctions, and liquidation clearance auctions. This makes it possible to offer customers steep savings of 75%, 80%, or even 95% off. They currently offer premium electronics, everything from iPads, HDTVS, Keurig Coffee Makers, Macbooks, Gaming Consoles, and Digital Cameras for a fraction of what you’d pay at the local mall. Here’s just a few the items listed on the site.
How it Works
The way BidCactus.com operates is that you buy a bundle of bids to bid against others in auctions. Each product is auctioned and starts with a very low starting price of say ¢1. Each time someone places a bid, the price of the product rises by ¢1. If you win, you get the right to purchase the item at its drastically reduced price.
Through the course of our investigation we learned of another mother in need, Alyssa Marshall, mother of two. With her son’s interest in graphics design she needed a Macbook, but with an income largely based on real estate in a depressed market her options were limited. She needed a big time computer on a shoe string budget. We decided to help her sign up for BidCactus.com and help us test it out.
I was pleased to discover that BidCactus.com was running a special promotion, that for a limited time, they are awarding an extra 100 bonus bids on new signup using a special promotional code. (Listed on the top right) A company spokesman clarified this promotion is to encourage new users to spread the word about shopping with BidCactus and help new customers learn the system.
Registration was simple taking about 2 minutes. We entered our promo code and we soon had 400 bids to secure our new computer. After logging in the first place we went was the “How to Win” tab and read everything. We also scanned the frequently asked questions and clicked the free chat technical support whenever we had a question. We starting biding with 10 minutes and quickly discovered the easiest target. Try to win packs of more bids which build up your buying power and help you learn. We saw several users winning multiple auctions and knew there was some bidding strategy involved.
After a period of trial and error we won our first auction. This was an additional bid pack to replenish our supply. Armed with a little experience we were now on the lookout for other items with little competition. We set up our auto bidding tool to target auctions at off peak times of the day and bid for us. This is perfect for busy moms and shoppers on the go.
Three weeks later we hit pay dirt and honed in on a Macbook at seemingly the last few seconds of an auction that had been raging for hours! We poured all of our resources into this exciting auction and could scarcely believe it when we won it for the final price of $186.43!
Ten days later Alyssa called me in tears when her new laptop arrived right on time in mint condition. “I’ve never been the type to get so emotional over shopping, but it’s just that it you keep thinking that these things are too good to be happening and too good true until you actually take your prize out of the box. I can’t thank you enough. I’ve already told my whole family about BidCactus.com but when they see my son’s face and his new laptop that’s when it really hits home.” –Alyssa Marshall
A Penny For Our Thoughts
How can we explain the types of deals we are seeing since many auctions appear to be going for far below wholesale prices? Perplexed, I turned to financial analyst Jim Sterns for his insight into this baffling situation.
“Even supposing BidCactus.com is purchasing their entire inventory from the world’s largest liquidation retailers, these prices indicate the merchandise itself is given away at a loss. The business model is based on having a large pool of bidders purchasing bids and spending bids to generate profits. What you are seeing now is the early adopters getting a disproportionate number of good deals due to a small user base and a relatively lower number of bids cast per auctioned item.”- Jim Sterns
Based on the activity I observed on the site this appears to be the case. Since BidCactus.com is relatively new auction site when compared to a giant like Ebay, the competition bidding for items is relatively low. There are simply fewer people to compete with and more deals to be had. It is difficult to say how long this deal phenomenon trend will continue with more mainstream media exposure and new users joining BidCactus.comevery day. At some point the prices will adjust by themselves but for now shoppers like Alyssa are reaping the rewards.