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View Full Version : The Crack Cocaine Of Auction Sites


dilettante
Jul 22nd 2009, 12:24 AM
Have you guys seen Swoopo (http://www.swoopo.com/) yet?

It's an online auction site (sort of like Ebay...only far more insidious), where one can purchase high priced electronic merchandise for a fraction of the cost. The items up for sale are new and put up by Swoopo (not other users, as on Ebay) and generally start at some stupidly low price, e.g. $0.20 for a big screen TV. Then users have 24 hours to bid and the highest bidder wins.
Looking at the site right now, there's a 50" plasma HDTV going for $101.50 with 30 seconds left in the auction, and a 47" LCD HDTV currently bid up to $33.48 with 14 seconds left to go. What a deal!
Just three things to keep in mind:

You can only bid in pre-set increments (generally $0.12). So, if the current high bid is $100.00, your bid will raise it to $100.12; you can't just bid any amount you want.
Every time anyone bids, the auction gets extended by 20 seconds, so that other people have time to out-bid you (and thus also extend the auction 20 more seconds, giving you time to outbid them...etc).
Every bid, regardless of whether you eventually win the auction or not, costs you $0.60.


Here's an insightful (and amusing) little piece on how it all works: http://www.thebigmoney.com/articles/money-trail/2009/07/07/crack-cocaine-auction-sites?page=0,2

I bring it up because, frankly, I have tremendous respect for these people; this thing is really quite ingenious. Go to Swoopo.com; you can actually watch countdowns ticking away toward 0 on fabulously low-priced electronic goods; it's astonishingly compelling. And for just about every auction people really do walk away with merchandise at a fraction of the retail price (though, of course, never quite as small a fraction as it appears since they had to pay for all their bids as well as the final auction price). It's really a form of gambling, but it doesn't look like gambling, which is really the clever part of it.

Anyway, I'm sure it says something significant about the human psyche or the global marketplace, but at the moment all I can think of is "dang, I wish I'd thought of that."

Americano
Jul 22nd 2009, 10:25 AM
Have you guys seen Swoopo (http://www.swoopo.com/) yet?

It's an online auction site (sort of like Ebay...only far more insidious), where one can purchase high priced electronic merchandise for a fraction of the cost. The items up for sale are new and put up by Swoopo (not other users, as on Ebay) and generally start at some stupidly low price, e.g. $0.20 for a big screen TV. Then users have 24 hours to bid and the highest bidder wins.
Looking at the site right now, there's a 50" plasma HDTV going for $101.50 with 30 seconds left in the auction, and a 47" LCD HDTV currently bid up to $33.48 with 14 seconds left to go. What a deal!
Just three things to keep in mind:

You can only bid in pre-set increments (generally $0.12). So, if the current high bid is $100.00, your bid will raise it to $100.12; you can't just bid any amount you want.
Every time anyone bids, the auction gets extended by 20 seconds, so that other people have time to out-bid you (and thus also extend the auction 20 more seconds, giving you time to outbid them...etc).
Every bid, regardless of whether you eventually win the auction or not, costs you $0.60.


Here's an insightful (and amusing) little piece on how it all works: http://www.thebigmoney.com/articles/money-trail/2009/07/07/crack-cocaine-auction-sites?page=0,2

I bring it up because, frankly, I have tremendous respect for these people; this thing is really quite ingenious. Go to Swoopo.com; you can actually watch countdowns ticking away toward 0 on fabulously low-priced electronic goods; it's astonishingly compelling. And for just about every auction people really do walk away with merchandise at a fraction of the retail price (though, of course, never quite as small a fraction as it appears since they had to pay for all their bids as well as the final auction price). It's really a form of gambling, but it doesn't look like gambling, which is really the clever part of it.

Anyway, I'm sure it says something significant about the human psyche or the global marketplace, but at the moment all I can think of is "dang, I wish I'd thought of that."

I read the link and they have a money making machine. They get 60¢ for every bid made.

Michael
Jul 22nd 2009, 10:41 AM
Very clever. The only thing more popular than gambling is bargain hunting. Both are notoriously compulsive.

I agree with Americano, this is a money making machine!

dilettante
Jul 22nd 2009, 10:49 AM
I read the link and they have a money making machine. They get 60¢ for every bid made.

Yep.
To take the example from the article, they sold a $1,799 computer for $35.86 but made $2,151 in bidding fees. Therefore they made a profit of 2,151 + 35.86 - 1,799 - [shipping] =~ $387.86. All for just setting up a website applet. And THAT's just assuming that they simply went out and bought the winner a computer at retail prices. Any wholesale discount they can get is only gravy.

drgoodtrips
Jul 22nd 2009, 12:15 PM
Holy crap! If this thing takes off, I bet you're going to see legislation address it eventually.

Americano
Jul 22nd 2009, 12:56 PM
It's similar in structure to a raffle often used by non-profits; buy a $25k car and sell 1000 $50 tickets for the drawing. Their concern is bids (tickets) and I can't determine any illegality but I'm not a lawyer.

Michael
Jul 22nd 2009, 02:19 PM
Holy crap! If this thing takes off, I bet you're going to see legislation address it eventually.
I don't see any possible reason for regulation here. No one is being ripped off and no one is breaking any laws. :shrug:

partofme
Jul 22nd 2009, 02:33 PM
I sort of want to give it a try but I don't know if I want to buy $24 worth of bids just to do that. I wish I could pay just one bid at a time.

drgoodtrips
Jul 22nd 2009, 02:37 PM
I don't see any possible reason for regulation here. No one is being ripped off and no one is breaking any laws. :shrug:

I don't see any valid reason. But, the fact of the matter is that this is essentially gambling, which riles feathers. I'm looking ahead to the (inevitable, if this takes off) stories of people getting themselves into debt chasing the cheap item dragon and having a relatively small number of products to show for it.

partofme
Jul 22nd 2009, 02:39 PM
I don't see any valid reason. But, the fact of the matter is that this is essentially gambling, which riles feathers. I'm looking ahead to the (inevitable, if this takes off) stories of people getting themselves into debt chasing the cheap item dragon and having a relatively small number of products to show for it.

I could see it going either way. Some forms of gambling such as slots and poker are frowned on while others like bingo and the lottery get a pass. I've never quite understood that. I'm sure the hard core family values types will raise a stink over it.

drgoodtrips
Jul 22nd 2009, 02:45 PM
I could see it going either way. Some forms of gambling such as slots and poker are frowned on while others like bingo and the lottery get a pass. I've never quite understood that. I'm sure the hard core family values types will raise a stink over it.

The lottery is pretty easy to understand - it's run by the state ;)

Americano
Jul 22nd 2009, 02:49 PM
I could see it going either way. Some forms of gambling such as slots and poker are frowned on while others like bingo and the lottery get a pass. I've never quite understood that. I'm sure the hard core family values types will raise a stink over it.

But still hold their bingo games on not-for-profit church premises.

Americano
Jul 22nd 2009, 03:00 PM
I'm suddenly seeing a lot of ads for Swoopo, which makes it looks like there are some bright people behind it.

drgoodtrips
Jul 22nd 2009, 03:02 PM
I'm suddenly seeing a lot of ads for Swoopo, which makes it looks like there are some bright people behind it.

I just showed it to a buddy of mine, and we're discussing via IM the possibility of crawling the site and analyzing bidding patterns.