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Swoopo - A Different Kind of Auction Site
I came across the auction site, Swoopo,
yesterday via a Google ad in my Gmail news ticker. I hadn't heard of
the site so I decided to check it out (it seems ads do work on me
sometimes). My initial impression of Swoopo was "HOLY CRAP! There are
some GREAT deals here!" I was stunned, no amazed, at how low the prices
were on everything.
You don't have to take my word for it here are some examples of auctions won there in the past day:
Not all of the items sold on the site are games but most of the
stuff is electronics. Video Games, cameras, phones, tvs etc. As a
gadget junkie I thought I had found a little slice of nirvana. Who
knows maybe I have but, once I looked a little deeper, I saw that it
wasn't all as idyllic as it first appeared.
In order to bid on Swoopo you need to buy a bid pack. Bid packs
range from $20-$500 in cost. Initially I thought that I basically just
had to pre-commit some money to the site before I could bid. However,
it turns out what you are donig with a bid pack is buying the right to
bid at $1 for each bid option. Thus a $20 bid pack gives you twenty
bidding opportunities. If you get caught up in a bidding war with
someone else and that one item takes all twenty of you bids but you
don't win the item you're still out the $20. Multiply that by all the
other people bidding on items and it suddenly becomes obvious how they
can sell stuff so cheaply; all participants are offsetting the cost of
each item.
Let's look at the Nintendo DS I listed earlier. Some guy named
Dorsey36 won it. He had to bid 14 times to become the high bidder so
right off the bat he alone has spent 14 just for the chance to win the
item. Fortunately for him his highest bid was enough so he won the
chance to pay $67.95 for the system; add in his $14 in bids and he
actually spent $81.95. That's still a great deal for him - he saved
$48.04 on that particular item (based on MSRP of $129.99). However,
everyone else who bid lost at least $1 in order to participate.
It also doesn't appear that you can get a refund for your bid
package. Once you buy a set number of bids Swoopo keeps your cash
whether you ever use them or not. So if you bought 20 and you were the
aforementioned Dorsey36 you now have 6 bids left to try and win some
other item. More than likely you won't win something with just six bids
and thus your actual expense for the console was $85.95. Multiply that
out by all the other users who have an insufficient number of bids left
to do anything else with and Swoopo has really made a nice profit.
Pretty ingenious really as I imagine most people would invest in
another bid pack before throwing some bids away in an auction they have
no chance of winning. Once you're in the Swoopo system it's mentally
tough to escape.
It's important to realize you could easily invest in a bid pack and
never win a single auction. However, to help minimize the risk of
people abusing the system and the great deals any one user account is
only permitted to win 8 auctions in a 28 day period; thus, at most, a
person can only be bidding in 8 auctions at once (assuming they haven't
won any yet in the current period yet). It's not really a fixed 28 day
period either, but rather, a rolling one. Thus if you win an item on
the 1st one of your auction slots will be filled. If you win one more
on each subsequent day then, by the eighth of the month all eight of
your slots will be filled. Then, on the 29th one slot will open up and
on the 30th another will so forth and so on until all eight of your
slots are emptied (though, you could be filling them as they empty).
I haven't bought any bids yet and thus can't really comment on how
quickly they ship or even on the legitimacy of the whole operation.
However, I can say it is kind of fun to watch the auctions as they near
the end. People jump in, just like on eBay trying to win an auction;
however, with each bid more time gets added to the auction thus those
final seconds (or minutes) happen many many times per auction. It's a
great way to drive up the price, suck in more bids, and generate
revenue for Swoopo plus the people bidding get to go through an
emotional roller coaster as they try to seal the deal. I imagine part
of the benefit, to the consumer, is the adrenaline rush that comes in
the heat of competition near the end of an auction.
I did register with the site yesterday but I don't imagine I will be
buying any bid packages. I can't rationalize spending money for the
opportunity to spend money. However, I wish I had thought of the Swoopo
business model because it seems like a great way to pull in far more
than face value on nearly every item you sell.
source: http://finalcut.newsvine.com