Bullion Connection - A new auction platform for only 5000 stackers

This should have been in your first post

 

Im totally lost!!!!!

 

BullionConnection, I hope you understand everyone's skepticism.

 

They lost me here: http://forums.silverstackers.com/message-695833.html#p695833

 

I think I get it now. So the lottery item's bid value will have to equal at least double the purchase price so as to cover all bidders exercising their discounting.

The big trouble I see is the potential for security breaches or staff cheating. This is why the real lotteries are so heavily regulated. You would probably need to develop a system where not even the site administrator can see what is going on. Like using that one way encryption system I've experienced before with php/mysql when storing passwords.

It probably isn't all that hard to get authority to do this as there are plenty of gambling websites in or operating in Australia.

I'm a bit of a punter, so I will definitely check this out.

 

BC. Can you approach the postage costs with the same level of detail. As I sure a lot of people are acutely aware a cheap purchase can quickly become ridicules when exorbitant postage costs become involved.
Regards

 

So whether this works is depentent on whether BC gets the balance between how much the coins are overpriced vs people's willingness to gamble (ie lose + forfeit bids)?

So until BC stops talking in examples and gives actual "retail" price of coin and postage this is all theoretical.

 

Thank you sir, this is the point I'm trying to make. I have run through some maths.

If everyone follows through on the purchase, BC will lose money if the items are close to spot. The only way they would make money is if the auction original item is substantially higher than the original purchase price.

Its like, 50 bids at 80cents for a $30 coin.

You have options to buy it at $30, if you lose.

But the problem is:

Person 1 - 49, assuming each bid once pays $29.20 + $0.80 each.
Person 50, pays $0.80
Bullion Connection has to issue out 50 coins, taking in a total of. $1470 + 0.80 = 1470.80. Which makes their base cost at least $29.416 per coin.

The system breaks when 1 - x person bids the majority near the cost of the coin and the winner buys it on minimal bid. There is a break even scenario and there is a losing scenario. The above with each person bidding once makes it work. The moment you have 1 person bidding the majority and a snipping winner is where BC will lose money. There are some other break points in between.

Say you are the majority bidder, whats to say BC won't allocate their bids to 49 coins in the background to dilute their chances or spread out this risk of BC losing money. In a non-transparent system, greed will always prevail. Just look at the poker sites, tell me they ain't rigged.

Nice concept, but its just that a lottery system.

Slam

 

I already participate in a coin raffle at my coin club, $5 for 5 tickets. Occassionaly get some good stuff but I have probably donated more to the club raffle than I have ever got back.

I quite like the idea of a weekly raffle, if each week the coin is something a bit different from what you can usually get and you have a chance of getting it for a couple of dollars then why not?

 

I think this is the problem . You clearly know its a raffle . .I like the odd raffle too .

That would be a great idea for the forum. Weekly raffles say $1 a bid equal to retail price + maybe a $1 handling fee

for example croc is $27 +$1 handling fee = 28 bidders/tickets sold only = 1 in 28 chance of winning or $2 a ticket & 1 in 14 chance of winning .
The problem i see is you need to have 10 coins raffled a week to make it worthwhile for the organiser to get $10 to pay for his time & fuel to go to the post office or one of the high volume traders here that goes to the post office anyway you could do away with the handling fee.

Would that be legal or would the $1 handling fee be considered profit /wages /taxable ?

 

Doesn't the 50th person to bid pay the amount of their bid+ postage?? Eg, I am the 50th to bid on coin at $25.60 - so i pay this amount plus postage?
I don't think you can win the coin for 80c ??
This would minimise/eliminate any potential losses?

 

Go back and read #58. It seems you can!
Russ

 

THis is why I originally didn't think the system would work like this.. its jsut to high risk for the seller.

All you need it two mates working together to game it.
1. Wait for a new auction to start. (let's say 1oz coin)
2. Mate #1 bids (Total bids required to win coin - 1)
3. Mate #2 (who is sitting next to them but logged in with another account) immediately makes the 1 bid required to win the coin.
4. Mate #2 gets coin for trivial amount makes a profit of spot, mate 1 pays retail, then sells the coin for retail less a few dollars. Basically two for the price of one.
5. If someone else happens to bid before Mate #1 or between Mate #1 and Mate #2. Then Mate #1 pays retail and loses a few dollars. But if you are ready to go as soon as the sale starts and you are reasonably coordinated.. this should be a minimal risk as you should win more often than you lose, and the payoff for a win is far greater than that of a loss

What am I missing?

 

Your on the right track, mathematically for BC to make money, the original item needs to be listed at 2 times the selling price for that item. This only covers the scenario of the 2 horse race where 1 bidder is majority bidder and second person snipes.

However there is a problem what happens when person 1, bids over more than half of the bids. That already covers for purchasing of the item. Do they just get it at that point? where the auction keeps going?

I don't think the whole system is well thought out, obviously I am only basing my assumptions on what was presented. Lets wait for BC to come back with some real numbers on how it works and the actual rules.

Slam

 

Hi Bull_bear

When we launch, the terms and conditions will cover collusion among members and the consequences involved.

We won't be going into to specific details at this stage, as we are currently testing the software with different simulations.

 

Hi slam

We want all members to have access to the same information from the same source. This will be covered in our 'Terms and Conditions', when we launch later this year.

 

Hi Excalibur.

No, if you're the winner of the auction, you only pay what bids you have placed.

For example 1 bid $0.80, 2 bids $1.60, 10 bids $8 plus postage.

Yes you can win the coin for $0.80 plus postage.

 

Hi Bullion Baron,

Thanks for the luck, we knew this wouldn't be an easy sell to start with. It is a different way of doing business to the norm and we understand the scepticism.

 

Must be getting close now. Any further advancements to advise the public BC?

 

Thanks for the question Russ, indeed we are getting close.
Be sure to pre register at http://bullionconnection.com

Here's a sneak peak..


We'll keep you informed.

Regards,
BC