While not a penny auction, PriceDrip is a social shopping website and therefore warrants discussion on Penny Auction Insider. For those who are not familiar, PriceDrip is a site that sells a variety of electronics equipment from iPods to LCD TVs, however what makes it unique is that prices slowly go down over time and users place anonymous bids for the most they would pay for the product. Bids are kept secret from everyone and when the falling price reaches the highest bid, that person wins the auction at their bid price. PriceDrip claims to be able to offer users “amazing deals” because advertising on the site offsets the falling price. Apparently, the more users who visit the site, the faster the prices fall.
So why don’t I like PriceDrip? Well, for one, a simple Google shopping search yielded lower prices on almost every item they sold. Take a recent auction for a Sony LCD TV which sold on PriceDrip for $1,082.19, representing a 23% savings over the $1399 retail price, the site claims. That same TV was found the same day on Amazon for $874.99 after tax and free shipping (PriceDrip also offers free shipping). So PriceDrip’s “amazing price” really is amazing, amazingly high. I don’t know why consumers are buying items on PriceDrip, but I think it has to do with not using the web effectively. Unfortunately, shopping comparison sites have been around a lot longer than PriceDrip but consumers don’t appear to be using them in this case.
A second reason why I am suspicious of PriceDrip is that their claim to offer lower prices through advertising seems impossible. The site has only one ad, a banner on the bottom (for BidStick.com when I checked today) and does not have much traffic. The amount of revenue generated by this advertising must be miniscule.
I have another problem with PriceDrip, which is that they posted a very suspicious press release announcing venture capital funding. The press release does not say what amount was raised, and the investing firm, 2G Associates, has no trace on the web, except for in the press release in question and a website with a “under construction” page. The press release also offers no contact information for either PriceDrip or 2G Associates.