A little over a month ago I participated in a beta test for a new cigar auction site called Cigar Sniper. Developed by Famous Smoke, Cigar Sniper is a penny auction site, which means you pay a fee for each bid ($0.60 is the value for the “paid” bids and, depending on the package you purchase, you will receive a number of “free” bids – more on that later) and because the bids cost money the overall price for the product can be much lower than the retail price of said product. Here are some of the rules you can find on the Cigar Sniper site:
Cigar Sniper is unlike other penny auction sites, where you forfeit the money you spent bidding on auctions. Instead, any money you spend bidding counts towards the purchase of the item at Famous Smoke Shop’s everyday low price.
Cigar Sniper is perfect for anyone who was already going to buy a box of cigars: you either win the auction at a steep discount, or you buy the box at the everyday Famous price by simply paying the difference.
That, right there, is the salient point that you have to seriously take into consideration when using this site, once it’s live, to make purchases. There’s also a hidden point that I did not find explained on the Cigar Sniper landing page: there are “paid” bids and “free” bids. The hierarchy here is simple: only the “paid” bids, which have a $0.60 value, count towards purchasing the item you lost out on. “Free” bids are just that, free. You can use them to bid on items but if you happen to lose out on that item those lost bids do not count towards your purchase of that item. That is a serious consideration to keep in mind when bidding.
Now, when I was going through the beta test the site would just automatically use the “free” bids up before moving onto the “paid” bids. I don’t know how it is going to work once the site goes live but just remember if you use this site to note which bids you are using.
I think there is going to be a distinct strategy that develops on this site. Free bids, with less inherent value, are going to be used more in the “spray and pray” approach to sniping deals. And why not? Someone may be willing to pay $80.00 for a certain box of cigars but not $125.00 for that same box and, as long as he’s using “free” bids, he has every incentive to jack up the bidding to $80.00 for that box.
This is a bad situation to be in if you are using “paid” bids, however. Let’s assume we are in the same situation as above but instead of “free” bids you are stuck with “paid” bids. And you’re up against a guy who is frivolously using his “free” bids, recklessly jacking up the price of the product. You bid ($0.60) and then he bids ($0.00) and then over and over again a number of times. The bid price is going up and up, you are paying for each bid, and, before you know it, the bid is now at $74.50 and you have made ten bids ($6.00 total) and that is more than you are willing to pay for that box. So you quit, which means you lose both the box and the $6.00 in bids. Bummer.
On the other hand, if you are using paid bids and you are going up against someone else who is using paid bids and you both fit into the customer category that Cigar Sniper described above (i.e. both of you are going to buy the box no matter what) you will both have the incentive to keep on bidding up the price because you want to win the box as cheaply as possible. At the end of the day you will both end up paying retail for that product because both of you are incentivized to keep on bidding until the combination of the cost of the bids and the bid price equals the retail price of the product.
Complications will assuredly arise as this site attracts more and more visitors. I can foresee a situation where the “free” bid gangsters muck up the works for “paid” bidders because there is appreciably less value in “free” bids. And the more people on the site actively bidding the more chances this type of situation will arise.
It isn’t all bad though. I think that during the early stages of this site there will be some awesome deals to be had. And if you do fit into the customer category laid out by Cigar Sniper (you’re going to buy the thing anyways so why not take a chance and get it for less?) then this site does have some value to it.
Some people, however, should stay away from this site and they include:
- People with poor self control.
- People with poor math skills.
- Those without a lot of free time available to win an auction.
Personally, I’ll check the site out and see what products are going for. If there are deals to be had I’ll jump on them. If not, I’ll take a pass. Just remember to do your homework and know what items on the block are going for out on the normal market. And, probably most importantly of all, if you are going to be bidding on a product with “paid” bids then you should only be bidding if you are going to end up buying the product regardless of the outcome of the auction. Using paid bids to get a product you don’t want to pay full price on is a bad idea because, chances are, the eventual price of the product is going to trend towards the full retail price.
PS: Make sure to read and understand all the rules to this site before playing. I didn’t get into all the rules (like the one where if there is a bid during the last 15 seconds then the clock goes back up to 15 seconds or the one where people can place auto-bids, which will jack up prices for you). So educate yourself and be prepared with a plan of action before taking on the other bidders at Cigar Sniper.