BTRIPP (btripp) wrote,

More on that "auction" site ...

The other night I wrote about this "Swoopo" site that was kinda sorta an "auction" site, but obviously had a business model based on charging folks to make bids (@75¢ per). I got an e-mail from them today wondering why I'd signed up on the site but hadn't bid on anything yet, so I thought "let me take a look again" ... here's what first caught my eye:

FABULOUS deal, right? Just $15.41 for a $1450.00 laptop (and, hey, it's just about to end ... where are those bid vouchers?)! But take a closer look ... this is a "penny auction", so the bids go up by just 1¢ ... meaning that there had been 1,541 bids already on this, for which Swoopo had snagged $1,155.75 in bid payments! Since I took that snap, there have been another 167 bids and the time got up over 00:05:00 (a bunch of "bot" bids poured in, each bumping the time up by 00:00:15).

As I noted in my previous post on the subject, it's a brilliant concept, but one wonders how long folks will keep coming back when they've paid perhaps hundreds of dollars (in 75¢ increments) and gotten nothing for it.

What crystallized the concept (and pretty much guaranteeing that I'm never going to "play along") was seeing their FAQ on "Auction Types" ... although they're no longer running these, they had a "100% off" auction where the winner would owe nothing at the end of the auction! This pretty much laid bare the business model where the actual auction results didn't matter, it was all those 75¢ bid fees that were what was driving the site.

Again, this is a brilliant use of several psychological factors to lure people in ... sure, ONE bidder is likely to walk away with a nice laptop for a fraction of its retail price, but they and all the "losers" would have paid Swoopo far in excess the value of the unit. While the classic quote (mis-attributed to P.T. Barnum) that "there's a sucker born every minute" is no doubt a cornerstone of the Swoopo business model, one has to wonder how long it will be until they've burned through folks willing to spend substantial chunks of change to "bid" on things with nothing to show for it ... at least when you're a "loser" on eBay, you're just out your time, you haven't help pay for the winner's prize!

Wow ... looking back on the auction it was now up over an hour, which means there were a sudden rush of bids, at least 240(!), all coming in at once (the bots must have gotten into an automatic bidding war with each other) ... and the current bid is an even $20.00 (meaning that Swoopo has collected more than the retail price of the laptop already!).

This is a fascinating thing to watch ... sort of like seeing somebody desperately filling out forms for a Nigerian Scam or watching a multi-car pile-up ... just as long as you keep telling yourself that you don't want to get involved!

Wow, again ... I just noticed that there was an Acer Netbook (which was recently being sold by Tiger Direct for $199.99, albeit for refurbished units), which was clearly listed as being "worth up to" $349.99, still being bid on at over $400.00! Talk about "suckers" ... they've bid the auction price up more than $50 over the retail price, and Swoopo has netted in excess of two thousand dollars in bid fees for something they were likely to have gotten for around $250 wholesale! That is really AMAZING!

{further edit}
Wow and more wow ... there is another Sony laptop in a penny auction, that is over ninety dollars at this point ... that is 9,000 bids at 75¢ each ... meaning Swoopo has collected in excess of $6,750.00 for a computer that retails for $1,449.99 ... no wonder they used to have those "100% off" auctions ... it's mind-boggling!

{final edit}
OK, so it's now like 16 hours after I initially posted about this, and that laptop finally sold ... for $172.43 ... certainly a good deal for the WINNER (well, depending on how many bids she ended up putting in) on a $1,449.99 computer, but an AMAZING profit for Swoopo ... remember, this was a 1¢ increment auction, so that $172.43 means that there were 17,243 bids made, each costing the bidder 75¢ ... so Swoopo collected $12,932.25, nearly thirteen thousand dollars in bid fees on this! You wonder how long this thing can keep rolling, or if there are enough people out there sufficiently incapable of "doing the math" on this site to keep their hopper full on-going.

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