Fiksuhuuto.fi - smart bidding by the cent
Antti Vilpponen
Fiksuhuuto.fi is an online bidding company founded in early 2008 by Jussi Mäntylä and Tuomo Siurua. The idea behind the concept is simple yet unique. There are open bids on the website put up by the company. You purchase a right to bid for those products (priced between 1,90 and 0,84 euros). Every bid you make increases the price by one cent. Also, when you place your bid for the product the countdown to close the bid starts from the beginning. The coundowns are usually between one and two minutes.
Jussi and Tommi have filed a patent application for the idea. Currently they employ 12 people and ship around 100 products per day. If you calculate 30 bids per product (which is probably far too little), they would be getting somewhere around 3000 euros a day (on an average bid price of 1 euro) just for the bids.
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March 27th, 2008 at 9:57 am
So how does this relate to kakusuu.com or the provider infire.com? They run a site with a very (very) similar look-and-feel and identical business.
It’s an interesting system that’s probably vulnerable to some amount of “gaming” with some technological help. For the consumers, however, it’s a bit like lottery (which I call an additional tax on people bad at math) and the more popular it becomes the worse it gets.
March 27th, 2008 at 10:12 am
Just so I’m clear - you pay for the right to bid in the auction! So you can pay money and still walk away with nothing. How is this different from gambling?
March 27th, 2008 at 10:26 am
Jon,
My thoughts exactly. The concept is only “innovative” from the very surface - think about it a bit more and it becomes clear it’s just another form of gambling.
March 27th, 2008 at 10:29 am
Sami and Jon, they have actually a few investigations from the Gambling and Lottery department to investigate their operations.
March 27th, 2008 at 11:20 am
It’s the same model that Bidster, Sentti.fi and others use: Paid-for lottery disguised as an auction. I would compare this to the ringtone scam model - monthly subscription plans disguised as “free ringtone” downloads. This works relatively well (until you get busted by the authorities) as very often somebody else than you pays your phone bill.
But the model might not be totally doomed - in U.S. the leading provider Limbo changed their model from premium SMS to standard SMS, so the consumer only pay 10-20 cents per message. They use the “auction” on marketing campaigns and the money comes from product manufacturers and media companies. They are also creating their own communities which can be used for direct marketing and advertising purposes.
What I’ve heard, Limbo has become one of the largest SMS “retailers” in the U.S. which proves that the consumers really like this type of a game. I tried it myself a few years ago and I must admit it was fun. But once again, scamming consumers is not a long-term business model.
BTW; Limbo has a development team based here in Espoo, as one of the founders is a Finn. More info at http://www.limbo.com.
Juhani