Tired of peanuts?

Yielding, as so often, to heart-felt entreaties combined with appeals to my self-interest (see my previous post for a full disclaimer), I went to visit BidOnCash. There are a lot of amateurs in this business, even where you wouldn't expect them, so I was pleasantly surprised.

BidOnCash cash is pretty much what the name implies: an ordinary ascending 100:1 bid-fee auction (that is, each bid costs the user $1 and raises the price of the item by $0.01), the interesting twist is that the items are all cash.

Which makes sense. You go to BidCactus or Swoopo and they're selling GPSs and digital cameras and you ask yourself: do I actually want a GPS or a digital camera?

Homer: Aw, twenty dollars! I wanted a peanut!
Homer's brain: Twenty dollars can buy many peanuts!
Homer: Explain how!
Homer's brain: Money can be exchanged for goods and services!
Homer: Woo-hoo!

So that's good. And the site looks good: the color-scheme of a Rottweiler, brown, black, and gray and a very sleek user interface. On the minus side, the home page is dominated by a Flash banner vid of some blinged-out white guy apparently enjoying his winnings but, thank goodness, you can turn it off.

Some notes in no particular order:

• As with every bidding site, some bidders are much more aggressive and successful than others. The site puts a limit of three wins per bidder per day -- and measures the day as midnight to midnight, California time. I'm guessing that around 11:30, most of the serious players -- the people you don't want to be playing against -- have already been limited out. Of course, that's 2:30 in the morning if you're on the East Coast, but hey, do you want to sleep or you want to win?
• If you want to play, buy a small bid pack and use it to win a bigger bid pack. Bid packs always go at a discount on this site (as elsewhere). The average 30-bid-pack auction goes for about 12 cents (that is, all the bidders collectively expended 12 bids and the winner also expended $0.12). So if you buy a 20-pack and just dump it into BidJames, their automated bidding service, you can probably pyramid your bid war-chest without too much risk.
• And BidJames? The name must be their variation of Swoopo's equivalent BidButler. I guess they're just too Non-U to know that butlers are addressed by their surnames ("Collingsworth another round of gin and tonics!"); it's chauffeurs who are called by their given names ("Home, James.") Of course, BidCollingsworth would be non-obvious.
• Higher-valued auctions go for more, even proportionally, than lower ones. I saw a $200 auction go for a staggering $25.95. If people bought those bids at full-price, BidOnCash made (and their customers lost) almost $2400 on that one auction! Realistically, the bids probably bring in 12 cents apiece or so, but still.
• Most of the auctions are considerably out of the money -- that is, even valuing the bids at full price, all the bids expended plus the (negligible) item price is less than the value of the item. While that's good (very good) for the players in the short term, either it will change (and good deals will become considerably scarcer) or the site will have to close. Either way, you don't want to keep a big account of bids that will become either worth less or worthless, depending on BidOnCash's success.
• The auction is technically a penny auction (because the price of the auction goes up with every auction) not a dollar auction (where the auction price is fixed) but because the ratio between bid-price ($1.00) and the bid-increment ($0.01) is so high (100 to 1, something like 6 to 1 being average in the industry) I wonder if it will be more inclined to act like a dollar auction (few bidders, but those bidders inclined to get into bidding wars). I will be keeping an eye on it.