Dissecting BassaBids online auctions

It is a known fact that SMS popularity in the US is a far cry from what it is in Europe. US mobile plans, with their large blocks of monthly minutes, create less of an incentive to use SMS. This in turn produces an interesting paradox. Businesses built around SMS take up big market share in Europe but they are practically non-existent in the US.

No one probably knows if SMS ever becomes popular or not in the US but some are willing to bet on it. BassaBids is one such company. What is BassaBids and what do they offer?

The lowest unique bid wins

On the surface, the idea behind BassaBids might appear very much like a regular online auction in the sense that people make bids and win things. The difference is that it is not the highest bid that wins, but the lowest one, or to be precise, the lowest unique bid. For example if you are the only person who made a bid of 3 cents while a few other people made a bid of 1 and 2 cents, then your bid wins. Here is a chart that explains it:

BassaBids Auctions

Bids are free during beta

If you go to the website right now, you will notice that it is still in beta. There is only one auction active and it is free to bid on it. In addition, the SMS part of the service is still disabled, which leaves you with the Web as the only way to bid.

I have signed up for an account and have been making bids for some time. There are probably hundreds of others testing their luck as well because shortly after I place my bid, I often get back an alert right away that my bid is not unique and I need to make another one. I will be very surprised if I turn out to be the winner.

What is the catch?

The free auctions that BassaBids runs are costing them one iPod Shuffle a week. This is a good way for the team to tune up their bidding engine and to generate some buzz along the way. Everyone loves free stuff!

Starting end of this month, the company is planning to launch a few “not free” auctions that will have a $1.99 per bid fee to participate, according to the How it Works section. If you look at the front page, you will notice that the first such auction is for MacBook Pro which has 8500 “remaining bids” next to it. It means that the auction will start on April 30, 2007 and will run until 8500 bids are made. If the price per bid doesn’t change, BassaBid will have $16,915 in revenue for a laptop valued at $2799. Not bad, huh?

Update 04/12: The company reduced “remaining bids” counts shortly after this post was published. Read the comments for details.

Why enabling SMS is important?

Bidding on things online with BassaBids is a pretty dull process right now. It is nothing like the show JellyFish puts up around their daily SmackDeals auctions. Yet, enabling SMS bidding opens a whole new market for it. I can see things really pick up when you can make bids in a circle of friends or, say, while enjoying a drink in a restaurant.

In addition, enabling SMS opens an additional revenue stream for BassaBids, from profit sharing with the mobile providers charging you for those SMS messages.

Online auctions or online gambling?

The more I think about the business model the more similarity I find with online gambling. As you make a bid, you don’t have a way of knowing if it is a winning one or not, unless you have tried out each and every bid starting with $0.01. If someone bids the same amount as you do, you will get a “not unique bid” alert and will be tempted to give it another try, and so on. This is exactly the feeling I often experienced when I went to Las Vegas last summer.

Each person who makes a bid has an equal chance of winning the prize, which in the case with the MacBook Pro above means that each bid has a 1 out of 8500 chance of winning. Don’t let the “lowest unique bid wins” motto confuse you. BassaBids is nothing about saving money or bargain hunting. As soon as you start paying for those bids, it becomes an addictive game where you have much more chances to lose than to win!

This post is sponsored by BassaBids via ReviewMe

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13 Responses to “Dissecting BassaBids online auctions”

  1. 1 Mike G. Apr 10th, 2007 at 9:58 am

    I like the evil business model :)

    I guess the 1 cent bid will be taken each time!

  2. 2 Golbguru Apr 10th, 2007 at 12:01 pm

    The concept sounds very interesting. I think the “lowest unique” bid might be the highest bid most of the times.

    You become addictive …and that’s like gambling. But, you can’t gamble without loosing money. However, in this case you have the option to back out (as long as you are not the winning bidder)….and hopefully winning bidder does get a good deal, otherwise it does seem like a gamble. :)

  3. 3 Yan Apr 10th, 2007 at 2:35 pm

    Golbguru, I am not sure I understand what you mean by backing out. Once you pay for your bid, the money is gone.

  4. 4 Golbguru Apr 10th, 2007 at 4:34 pm

    I meant if someone else wins the bid…you don’t have to loose your money on that.

    In gambling, if someone else wins the money…it means you are definitely loosing it. :) (well except at slot machines).

  5. 5 Yan Apr 10th, 2007 at 6:41 pm

    In gambling, if someone wins, they take everyone else’s money minus the cut that the casino gets.

    With BassaBids, the winner gets the prize (which judging by the first auction is much less than the sum of all bids) and the rest people simply lose the money they spent to pay for their bids.

    It is close to how lottery works in the sense that the winning bid is not a function of your skills but rather a pure luck. The interactive part in the form of ‘your bid is not unique’ alerts adds a gambling element to it.

  6. 6 Scott Apr 11th, 2007 at 6:52 pm

    I agree with Yan. BassaBids (or any other lowest/highest *unique* bid auctions) is a bargain just like buying lottery is a bargain. Sure, you pay only $5 for a ticket, but imagine how many million dollars you can get back!!

    Except the majority of lottery buyers never get their money back. Neither do those entering into this kind of unique bid auctions.

    Worse is the psychological effect surrounding this kind of “gambling”. If you spend $1.99 to place a bid, and found out that your bid is not unique, what are you going to do? The person who is in the right mind, who probably would not have participated in the first place anyway, would back out, thinking “well, there goes my 2 bucks.”

    But the ones who really want that MacBook Pro will continue to spend money on bidding, with no guarantee that he/she will win.

    Tell me that it is not gambling…

  7. 7 Golbguru Apr 11th, 2007 at 9:17 pm

    Yan and Scott: Yeah…I get it…I guess earlier I was just looking at the “free trial” scheme in which bidding is free. For $1.99 just to be eligible to bid that does look like a lottery.

  8. 8 Dave H Apr 12th, 2007 at 4:58 am

    Thanks for the review of BassaBids, it was very well written.

    Just for the record we have changed the number of bids required in the auctions. We hadn’t updated those figures since we started putting the system together and were playing with different auction models and different bid prices. They were meant to be updated before we went live, but your review meant we had to take action now.

    Dave Hoskings

  9. 9 B Sharma Dec 30th, 2008 at 12:45 pm

    Regarding BassaBid’s Dave’s comments – now the remaining bids are simply mentioned as a percentage, which means that they may still be requiring the same 8500 bids as before, you just don’t see it now. Or, in other words, the transparency is gone. This may be a reason why the MacBook Air bidding has been going on for the last seven months and there are still more than 99% bids remaining. At this rate by the time bidding is over on this item the technology will probably have changed and the Air will look like a quaint equipment from bygone days!

    And one question – if your bids is not the lowest unique bid do they tell you if your bid is too high or too low?

  10. 10 B Sharma Dec 30th, 2008 at 1:30 pm

    Additionally, BassaBids is not the only one – and maybe not even be the first one – in the field. I heard of Humraz Auction House in UK several years ago doing the same thing. Their model appears to be more transparent too, where they disclose the initial seat price and the number of seats so you know before hand what will be their approximate gross inflow on a certain item.

  11. 11 BassaBids Online Auctions May 19th, 2009 at 12:47 pm

    The whole site is free now.

    If you want to make a bid it costs nothing, you only pay if you win the auction whatever that price is.

  12. 12 ravi Nov 3rd, 2010 at 12:36 am

    if i win,how do i pay watever my bid has won.

  13. 13 ravi Dec 17th, 2010 at 6:36 am

    can nebody reply 2 my above question bcoz i did win

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