Swoopo

I saw a commercial for this website recently, and decided to check it out. It seemed interesting. It's called Swoopo, and it's basically an auction site with a little twist.

Here's how it works. You buy bids from the website for 60 cents a bid. Swoopo puts an item up for bidding - for example, bidding just ended on an HP TouchSmart Desktop. It retails for $999.99. It's a penny auction, which means the price starts at $0.00 and everytime a bid is placed, the price goes up 1 cent. They put a timer on it, and when the time hits 0:00:00, the last person to bid wins the item. But, every time someone bids, time gets added back onto the clock, so often the "last 10 seconds" will last like 15 minutes.

The $999.99 HP computer sold for $5.55. The winner placed 194 bids. So what does this mean? Well, the guy who gets the computer - he's a winner. He pays $5.55 + $92.40 (that's how much it cost him for his bids) + $19.90 (delivery cost) and he gets a real nice computer straight to his house. That's $117.85 for a $1,000 computer. So he wins.

For the site, their income is the 555 bids that were placed. At 60 cents a bid that's $333. Now I'm sure they got a deal, but I don't know how much it cost them to get to sell the computer, so maybe they made money on this item, maybe not. I am sure that overall they are landing in the black. Other items go for $30.00 or more, and a $30.00 item nets the site $1800. So the site wins.

So if the buyer wins and the site wins, who loses? The answer is those who bid, but don't win. On the HP, there was probably some guy who put in a lot of bids, but ran out eventually. We know the bidder bid 194 times. Say someone bid 100 times and wasn't the last bidder. Well that's $60 spent and nothing to show for it. Better luck next time.

It's a cool idea. Paying for bids rather than just having the eventual winner pay keeps prices down for the winner. You can check it out if you want at www.swoopo.com