12.12.2009

swoopo.com

Have you heard of Swoopo? Has anyone here used it?

I'm in the throes of making a decision about a new secondary computer. It's clear my current used ThinkPad is dying. I'm deciding between another used, but newer-model ThinkPad from Craigslist (there are many available at good prices) and a new netbook, such as the Lenovo IdeaPad. Each has its pros and cons, but the smaller, lighter-weight netbook is currently in the lead.

While looking around online, I came across someone raving about buying brand-new netbooks for $10 on something called Swoopo. Perhaps I'm the last known person to hear of this site, but I clicked... and was amazed. From Swoopo, typos and all:
Swoopo - the next generation of online auctions

Founded in Germany in 2005, Swoopo is one of the world.s most innovative auction sites. Based on a unique software solution and business model, the company sells premium products like: computers, cameras, game consoles and even cars, at very low prices. Swoopo auctions over 10,000 products per month and has more than 2,500,000 registered customers.

Here is how it works: our online customers buy “bids” in advance. They cost $0.65 each and are sold in packs of 40, 70, 120, 300 or 800. Bidders have the choice of placing single bids, or, using an electronic bid assistant called the .BidButler.. Alternatively, customers can bid via the phone.

Every bid placed, increases the price of the product by 12c and the auction countdown by up to 20 seconds. To help keep track of the money spent on bidding, each auction displays the amount spent on bids by the customer and how much the bidder would save overall, if they won the auction at that moment.

The ‘last bidder standing’ when the countdown reaches zero, wins the auction - usually at a very low price; winners save, on average, 65% when compared to the recommended retail price.

In December 2007, Swoopo was successfully launched in the UK, followed by Spain in May 2008 and the US and Austria in September 2008. Swoopo has launched Canada in June 2009, more countries are going to be added in the future.

If you scroll through a list of ended auctions, you'll see things like "Toshiba 46" 1080p HD LCD TV" having sold for $15.62, an "Apple LED iMac MB953LL/A 27-Inch Desktop" for $6.89 and a "HP Pavilion dm3-1020CA 13.3-inch Notebook" for $15.95. All new, factory sealed.

This is very intriguing, although I'm not completely sure I understand it yet. There are several HP Pavilion notebooks, which seem nice and lightweight. Should I do it? It seems pretty low risk, but perhaps there is a catch I'm not getting.

Your thoughts?

[I've posted a bunch of links in comments. The catch, it seems, is the money you spend on bids for auctions you don't win - which is not refunded.]

17 comments:

L-girl said...

From ZDNet: A $79.16 MacBook? On Swoopo, if it sounds too good to be true...

From BadMoneyAdvice.com: Swoopo: Entertaining Yes, Shopping No

L-girl said...

Technologizer: Is Swoopo Nothing More Than a Well-Designed Gimmick?

L-girl said...

TheRegister.co.uk: Swoopo: eBay's (more) evil twin.

eBay is evil? I don't think so.

L-girl said...

MSN Money: Swoopo: the crack cocaine of auction sites?

Calls Swoopo an "an efficient, addictive way to separate people from their money".

redsock said...

Those first two links are quite good. Unlike eBay, where if you are outbid, you lose $0, with Swoopo, you could make 100 bids at 75 cents a pop, lose the bidding war and be out $75.00.

L-girl said...

Would there be a way to use it, with some kind of controlled method, that didn't end up costing a lot of money? Or should I just move along...

redsock said...

Move along.

L-girl said...

Rats.

rww said...

Sounds like if you win you win big but if you lose you lose big. Undoubtedly they make their money from the big losers and the big winners are like loss leaders.

redsock said...

There are no loss leaders, though maybe it happens very rarely. Maybe.

From the ZDNet article:

"Consider a weekend penny auction for a 13-inch Apple Macbook, which regularly retails for $1,299 but went to a winning bidder for $79.16, plus $239.95 in bidding fees (that's 319 bids times 75 cents each.)
In the end, the winner paid $318.41 - still a fantastic deal. But that $79.16 means that there were 7,916 bids on that Macbook - and at 75 cents each, Swoopo collected $5,937 on that single laptop computer. Assuming it paid full retail price for that Macbook (and that might be a naive assumption), it still profited $4,638.

L-girl said...

Ah-ha.

Worth not using on prinicple!

James said...

Swoopo's become quite infamous among consume protection groups. Definitely to be avoided.

L-girl said...

It's really closer to gambling than an auction. This morning when we were talking about it, Allan likened it to playing slots. You keep feeding in tiny increments of money for the possibility of a big strike. But you never get those tiny increments back, and they can really add up.

Kim_in_TO said...

Thanks for posting this, and all the links. I read through every one of them. Fascinating - especially about the dollar auction, which I'd heard about long ago and forgotten about; in the context of swoopo, it helps to clarify the logic of those who play the game.

This is also similar to the "time investment" phenomenon. When you are waiting, for example, for a bus, and it is taking too long and you are considering abandoning it and starting to walk or look for a cab, part of you wants to stay because the longer you've waited, the more likely the bus will come along "any minute". The longer you wait (i.e., the more time you have invested), the harder it is to leave because it seems that the payoff is more likely to come. (At this point, the analogy falls down because the bus will eventually come but your gambling payoff doesn't necessarily.)

L-girl said...

Kim, I'm so glad you said this post was helpful. After I learned the catch about Swoopo.com, I considered taking the post down, then I thought, wth, someone might learn from it, why not just leave it. Nice to know that happens.

That "time investment" thing is a real tough one. Terrible things - bad relationships, bad jobs, even wars - are continued because leaving would somehow negate the time invested so far.

Some people would cue a terrible song about knowing when to fold 'em, but you won't hear that from me, nuh-uh...

polou said...

I think you should keep this post on for the consumer awareness post or beware. People might read your comments.

L-girl said...

Thanks, Polou, I will. I refer to the comments at the end of the post, too.