Penny-aution site hustles users, makes millions

100.000 Danes visits the penny auction sites ziinga.com a month hoping to make a bargain. Probably the only winner is ziinga.com themselves, making profits of 4 million dkk a month.

I don’t mind gambling. But I do mind hustling. And that is for all I know what ziinga.com is about: a site which systematically plays down the cost, while high-lighting potential winnings.

When I looked into the ziinga.com-business I found the site to conduct some 480 “auctions” a month, generating som 5.7 million dkk in revenue – at least four millions ending up as ziinga.com profits. I also found 131.000 adult Danes to have visited ziinga.com i April 2010 – and 90.000 in May.

The trick of ziinga.com (and most other penny-auction sites for that matter) is that bidding is not free. It cost 5-6 dkk per bid. And each bid only raises the price with 0,08 dkk, resulting in a situation in which any auction requires hundreds or thousands of costly bids before ending.

I also found ziinga.com to deploy a range of mechanism to hide what it’s all really about, among others:
– No mentioning of the cost of bidding – before they’ve had you registered and had their shot at getting you hooked
– No mentioning of shipping costs, which typically cost significantly more than the item you buy
– No mentioning that you actually bid against bidders from several other countries – not only your fellow citizens

Download full report (in Danish)

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Øreauktioner – auktion, lotteri og flosset forretningsmoral. Ziinga.com-casen” 19 pages.

To order the report, send an email to jon@jon-lund.com including your contact information with subject: “Buy ziinga-report”, and you’ll receive both the report as pdf-file and an invoice.

Comments

  1. Tak for et rigtig spændende indlæg.

    Jeg har faktisk selv diskuteret den tvivlsomme forretningsmodel, der ligger bag den type “auktioner” med venner kolleger for nyligt.

    Det lader også til, at der kunne være noget at skyde med i forhold til overtrædeselse af markedsføringsloven.

  2. I unfortunately bought bids for this site and bought the wrong subscription, have emailed, left messages and my email was returned as no such site. There customer service is closed still. How can I get more info on getting a refund ?

    Many thanks
    Ruth