A reader recently asked me write about Swoopo – an online auction site, that seems to be distantly related to the Ebay model. I just first want to mention that while I am very comfortable selling stuff on ebay and even started an Ebay business, I have never used Swoopo – so if you happen to be a Swoopo-Ninja, please share your wisdom in the comments!
What is Swoopo?
Swoopo is an online auction site. If you have used Ebay, you know that, just like a basic auction, bidders place bids and the highest bid wins.
Swoopo, adds a new spin to this. They charge bidders 60 cents for each bid. While at first it might seem like this is worse, it actually could be a good thing. The reason being is that the money paid by bidders is used to offset the price of the item. As a result auction winners often can purchase items at a fraction of the retail price.
A Swoopo real life example
I started looking at auctions that had already ended, so I could get a feel for what kind of a discount we were talking. I recently was shopping for cameras (best point & shoot cameras), so I noticed that a Canon T1i
Below are the details of the finished auction…
As you can see in the screenshot above, the high bidder placed 186 bids @ 60 cents each for a total of $111.60 spent bidding on this camera. The final auction price ended at $22.76. So, doing a little simple math we can see that this lucky guy Zyan100 got this $800 camera for a total of $134.36!
The downside
Risk
Before you run over to Swoopo.com and invest your life savings, a couple things need to be mentioned. First, the guy who won the above auction could have been outbid. If he had been, then he essentially would have been out $111.60. That’s no fun.
So, because of this, it now makes sense that Swoopo calls themselves “Entertainment Shopping”. Yea it is kinda shopping and kinda gambling.
According to the Swoopo site, after you place bids and you lose an auction, you can use the money you spent as a discount to buy the item outright…
“Even if you don’t win the auction, you never have to leave Swoopo empty handed. Any time after you’ve placed your first bid in an auction, you can choose to buy the product for a discount, getting back the cost of the bids you placed in that auction. You’ll never have to pay more than the Worth Up To price for any products on Swoopo.”
Investment
The other downside, I see is that you can’t just buy a single bid. You need to purchase bids in “packs” with the cheapest pack being $24 for 40 bids.
My hunch is that many people get intrigued by the idea of winning and sign up, but aren’t committed to it and end up never winning an auction or never using their paid for bids. It is likely the ones who are really committed to the process who are the most successful with Swoopo.
Limited Items
After digging around the site a bit, you begin to realize that there really aren’t that many items up for auction. Just like a site like Woot.com, you could end up buying junk that you don’t need because you are lured in by a good price.
Is it a scam?
Doing a little more searching about Swoopo, you find out that the word “scam” is tossed around quite a bit. Having just tried it out for the first time while writing this article, I don’t think it falls under the category of scam, but it should be used with caution.
Or better yet, it should be used with strategy. From the little I know about it, it seems the best way to approach it is to use it when you have something that you are already planning on buying. For example if you were planning on buying a computer monitor anyway, it might be worth trying to win it on Swoopo for a much lower price. Then, according to their policy, even if you don’t win the auction you can still buy the monitor directly from Swoopo at it’s retail price minus however much you bid (within the next 24 hours).
The danger I see, is that many people probably just go and play around with it, only to lose money. Bottom line, unless you are ready to make a purchase of an item that is listed on Swoopo, I wouldn’t recommend it.
Has anyone tried Swoopo? I would love to hear what some regular Swoopo users think!
{ 15 comments… read them below or add one }
It would be nice if there was legitimate competition for Ebay. The only thing that is close is Amazon. However, you can only sell items that are already for sale on the site at a lower price. It is also not a true auction site.
Thanks for sharing, I will have to check Swoopo out!
Very interesting sounds more like a Gambling site than an auction site to me. It will be interesting to see what kind of feedback you get from people who have used the site and are Swoopo-Ninjas! Thanks for the review.
Interesting site. If I remember correctly Swoopo was founded by a game theory phd. In similar games studied in game theory players are initially motivated by greed, but later become motivated to not lose! I wouldn’t go so far as to call it a scam, but I certainly wouldn’t want to be a part of a business model like this.
Also interesting to note is the companies view of this. You mentioned above that a winning bidder walked away with an $800 camera for $134. Now factor in the numerous other bidders that did NOT win and Swoopo just sold an $800 camera for somewhere around $1600 (from a Wall Street Journal article about Swoopo in Fall ’09-ish).
Deacon, that doesn’t surprise me that it was created by such a smart guy – personally I don’t really like the business model, but after watching it a little bit, it is pretty amazing to see how genius the whole thing is. But just like most lottery based opportunities – the winner wins because so many others lose.
I must be weird, I dislike the entire auction concept. On the rare occasion I do buy something, I just want to know what the price is and buy it (if I decided I do want or need it). I don’t want to compete with others over it. Anyone else feel this way about auctions? guess I am old fashioned.
Swoopo is certainly interesting, but I agree that it is closer to gambling than an auction. I wouldn’t use it unless like Bob said I was already planning on buying it and was willing to pay whatever their full price was.
Swoopo is a penny auction site just like eBay, if you have tried it before. You can do shopping from here through online bidding. Few days back I have read an article about another penny auction site, Brugle.com-An Online Bidding Site Par Excellence. As the number of bidders increases, prices of the product will decrease, I think you must try it out, might be it will bring you some more new things.
I first heard of Swoopo from a stranger who approached me at lunch, he said he overheard my friend and I talking about buying a 27″ iMac, and that he bought one on Swoopo for $100 – adding in the cost of his bids came out to be about $200. I’ve been fascinated by this ever since, but I want to learn a good strategy before I start because this sounds like something you can lose your shirt on if your not careful, and guaranteed there are ninjas already on the site winning at the expense of rookies like me.
So here is my strategy in theory – please weigh in:
1) Only bid on stuff that I am committed to buy anyway. That way I don’t feel pressured to keep outbidding someone else for fear of losing what I have already invested in bids. Never be motivated by fear.
2) Only bid on items that have a controlled retail price – like an Apple computer. They are pretty much the same price no matter where you shop, so if I end up losing the auction, I can still buy it for list price on Swoopo I won’t regret it. On the other hand, if I lose an auction on a Samsung UN46B8000 46-Inch 1080p LED HDTV and had to pay list price ($2,055.00) , I would regret it because I could have bought it on Amazon and paid much less ($1,650).
3) Since I am planning on buying the item anyway, I won’t stop outbidding the competition until the total cost of my bids + the bid dollar amount meets the cost of the product. At which point I would lose money if I “won” the auction.
4) Returns: The 14-day refund policy only reimburses you the cost of the auction, no the money you spent bidding. Warranty/Exchanges vary based on the product – so check out the policy for the specific item I want to bid on before I begin.
Following these four points will help me avoid “fear based bidding”, and possibly save a great deal on something I am going to buy anyway. And in the end, though I may not win, at least I can’t lose.
Matt
About a year ago we found at about swoopo from some friends, and we decided to try it out by buying the cheapest package of bids. We carefully selected the items we wanted to bid on but never won anything, though we came close. Pauhl and I were very strict when it came to our trial run of Swoopo. We promised each other that if we didn’t get anywhere with the first purchase of bids, that we would stop. We knew it would be easy to get carried away. I have thought about trying it again, but I think it makes more sense to use Swoopo if you are actually in the market for a specific item, not just for the thrill of getting a good deal. Similar to Woot.com, I check woot every day, but I have in mind a few things that I would like to have, or even need around the house. Those are the things I buy from woot.com, not all the nifty gizmos they usually sell.
Wow! Sounds a bit risky to me…I’d hate to be out that money, but I guess for the right item, and if you like to roll the dice a little, why not!?
I don’t know how successful they will be but they came up with a very interesting idea that’s for sure! I guess you can get really good deals on items after you gain some experience on how bidding works etc… I will definitely research this new system and write a review on my blog.
Great post.
Perhaps I can just add to this that the best way to guard against being ripped off by online sales or auctions of any kind, eBay inlcuded, is to use a bona fide online escrow company. Although it does add some cost, that will take uncertainty out of the transaction.
For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably Escrow.com (http://escrow.com). In fact, it’s the only one that eBay recommends.
Take care,
Ulf Wolf
DON’T USE SWOOPO! When I first read this post, I checked out swoopo and was immediately mesmerized. The idea of getting great products at such steep discount seemed too good to be true. It is. Luckily, I only bought $45 in bids, and at this point I regret buying any. It’s almost impossible to win. I lost in three different auctions. One live by placing bids myself, and two with different bidbutler strategies. So the joke is on me, all I got was the stress of gambling and a few waisted hours.
After reading and watching some reviews it makes much more sense. Swoopo is set up like gambling and the lottery. My suggestion – DON’T USE SWOOPO!! If you really want to buy something and it works in your budget, save the money and buy retail.
Try to register a username on Swoopo that contains any uppercase characters and your registered username will be all lowercase characters. Be suspicious of bidders who have usernames containing uppercase characters because they did not go through the normal registration process. Try it yourself, your username will be all lowercase. Be suspicious.
I used to bid on Swoopo for nearly a year and then they allowed the entire site to be overtaken by a large group of bidders that worked together to win auctions. Once other people saw this large group working together then others began using the same techniques and Swoopo did absolutely nothing to stop it from happening, in fact their customer service basically just blew me off until I threatened to spread the cheating technique around the internet so at least everyone who bid on the site would have the same level playing field. After six months of reporting the cheaters every time I saw them cheating they finally escalated me to Jehnna Koch who is the supposed customer service manager at Swoopo. She took the list of users that I provided her that were cheating and she closed some of the accounts for fraud, only to have a number of them reopened inexplicably by the German office. I found this suspicious and began to think these accounts were actually Swoopo accounts, but it wasn’t until they began questioning how I knew people were cheating that I became fully convinced that Swoopo is a scam site that either bids on their own auctions or that one of their German employees has a group of friends that they work with to win auctions. When they asked me how I could verify if people were cheating I explained that everytime a bidder reset their bid butler it would go off so it was easy to tell when they were turning it on and off to allow the single bidder they were working with to win the auction. The next day the bid butler was changed so a bid would no longer go off. I thought this was either a very strange coincidence or they changed their system so I could no longer tell when people were cheating. I thought I would test my theory that they were involved so when Jehnna the customer service manager asked me how it was that I was able to provide them with lists of auction numbers and people who were involved in the auctions I explained that I would search Google for the bidder names so I could see what auctions certain bidders would be on together, showing that they were working together because there would be a long list of auctions that would come up in the search. I figured by telling them this if the auctions no longer showed up when I did a Google search it would confirm that Swoopo was in fact making changes on their end to assist the cheaters and make it more difficult for me to know when people are cheating. It wasn’t a week after I told them about my Google search technique that the auctions were no longer showing up on Google, reinforcing my belief that they are involved with the cheating on their website. There continues to be a large number of individuals who cheat on auctions at Swoopo, and even though I have provided them with a large number of auctions showing the overlap and collusion of bidders and somehow this isn’t sufficient to prove cheating to Jehnna Koch. Swoopo is a shady business and their business practices are highly questionable and unethical. If you want to see for yourself just watch the bidding techniques of Millionerxxl, Katze1963, Mudviking, angryenough, Kazanan, Bigmamaxxl, Assb76, I could go on and on. They all work together to win by having one person have the bid butler and then one single bidder bidding later and later at 1 second. Eventually others will stop bidding because they think the single bidder is going to continue bidding at 1 second and when they don’t the bid butler wins. Watch how late people bid at one second – that’s the dead give away. The other tactic is to have the bid butler and then have a single bid as well and then they shut the bid butler off letting the single bidder win. Their tactics are constantly evolving so you just have to watch and pay close attention to bid patterns. When you are skilled enough you can see it from a mile away. Unless you are Swoopo – they have no idea, mostly because they only look at data. None of them even know a thing about the auctions and they don’t have anybody even watch the auctions as they are going live. I highly recommend finding a different penny auction site, as Swoopo is very questionable and is getting worse all the time. In my opinion the site is a total scam, but that is just my experience. If you want to contact Jehnna Koch directly at Swoopo with your own complaints here contact info is: 650-567-9667 ext 122 or you can email her directly at jkoch@swoopo.com