CrunchGear

It’s gonna take them at least a good 10 years before they can compete with eBay..lol

Its more like Gambling to me.. I tried this a month or two back.. deposited £10 ($20) and only to find me loose it! Its more like this 50 people gamble… 49 loose their money and 1 wins it.. and yea he spends 10 to 25% of product price while the rest is compensated by remaining 49 users and remaining is profit/revenue for Swoopo (previously TeleBids).

Now isn’t that a Gambling or they still call this Gaming? I avoided it later… you only get addicted in loosing more money! I would rather hand around Best/Hot Deals Forums & Cash Back Sites to buy gadgets or gizmos for cheap - Safer Bet!

Its just opinion… !! But I avoided it completely.. :)

It’s not about competing with ebay. It’s about big cash for the owner of this site. How do you know that the people winning stuff there are real? And even if they are, the site still makes a lot of money. This phenomena is based on “one dollar auction” psychology and in the long term, the only winner is swoopo.

http://en.wikipedia.org/wiki/Dollar_auction

sounds like gambling to me

Sounds like a sucker’s game.

The site is pure genius and probably a money maker. My favorite is the chance to “buy” 300 more bids…though they give them to you for free. Their Fixed Price Auctions are genius as well…no matter how high the bidding goes, you still only pay $98 for a 37″-40″ LCD TV worth $1200-$1999 or more…depending on the auction. So, there is no real risk to bidding higher. Sure, you pay $1 per bid, but if you throw out 200 bids, you still get the TV for $98, saving you about $800.

I did some calculations on a couple of bids…a TV bid up to about $1,200..at 15 cent increase per bid, that’s 8,000 bids. You can do the math…they made $8,098 (bids+fixed auction price), for a TV that cost them MAYBE $1,000 to buy wholesale. The bids are similar, but costs the winner nothing but their bids…one recently “sold” for $256.35, 1,569 bids…so $1,569.00 for…you guessed it…300 more bids to use against other people to make them spend more as well….

There are so many stewpid people on techcrunch who comment as if they understand game theory. Any business is a gamble. People put in fixed amount of money hoping to make fixed amount plus some. To call this gambling is correct but to call this gambling as oppose to another kind of business is incorrect.

The entire economy is based on a game. I once knew a small retailer who bet that more people will buy supersoaker. So he bought up as many supersoaker as possible. He didn’t realize that a big supersoaker shipment is coming the next from a different wholesaler. So when he went to sell the supersoaker at 500% its cost, he ended selling none because another retailer who bought the supersoaker cheaper price him out.

something is wrong when bid is much much higher than the advt price- http://www.swoopo.com/auction/sony-vaio-vgn-fw170j-h-16-4-core-2-duo-n/101046.html

If you notice, when products sell for more than the recommended retail price this is because its a 100% off auction, click on the little banner where the 100% box is ticked and it will explain all.
If its 100% then you will only pay delivery only, so forget the final price.

I’m from the UK and ive used Telebid for a couple of months and already I have won a Sony PS3 for £52, ok i spent over £60 in bids, not only on the item i won but another PS3 i didnt win.

So yes it seems like a scam but people like me do win, its a bit of luck along with having some balls and being sneaky i suppose.

A friend of mine in one day picked up 2 Nintendo Wii’s for £30 and around £40, yes he might of finally paid more with bids but still a big saving.

If you do the calculations its obvious that Swoopo are doing very well and making lots of money but isnt that what its all about with a business, I’m not fussed because its worked for me.

ebay killer?

This makes perfect sense. I did this in an economics class once. The prof. told us he was going to sell $1 and make money. Rules being that the first (winner) and second (loser) place people must pay. Therefore as soon as the price was over $0.50 he made money because he would get the winners money and the second place persons money.

Anyway, the same thing applies here. If you have already sunk $400 into bids and you are out bid even if the product costs $500 you are willing to bid way more because otherwise your $400 gets you nothing. So you end up paying $700 for $500 worth of stuff so you don’t feel like the $400 you already had in was a total loss.

Back the the economics prof. He said that in once class he made almost $20 because people didn’t want to just lose. They would rather win at a higher cost. Seems strange, but it sure is easy to get caught up in the moment.

@David

– Yes this is classic irrational bidding behavior. The only problem here is that it only works once. In other words, your economics professor was able to do this once in class to make a point about how irrational people are, but I bet he wasnt able to convince the same two bidders to do it again and again.

In the short run, this is interesting. In the long run, these guys will have a hard time attracting a repeat audience — becuase for every ‘winner’ there will be at least 1 ‘loser’ (and probably a lot more losers, ie 20:1). Most of those losers will not repeat their waste of cash over and over again ad infinitum. So they will be constantly searching for new users.

This is what makes this closer to a scam than a real business — they dont care about repeat business at all in their model. Its a one time hit and then a big FU to all the losers. I totally think this is an interesting study on humanity, but it isnt a viable long term business.

Brushfire

It’s a genuine company - I noticed the name change a little while back which seemed odd and a little concerning. Looking at it though I think it is just a name change as the main German company behind is still the same. If you visit telebid.com you’re taken to a different Swoopo site with all the original Telebid details.

Personally I think Telebid/Swoopo is too addictive and too misleading but it does seem to have had a fair share of success making many times the cost of the prizes and even making fortunes on auctioning their own free-bid vouchers (why anyone would personally pay more money than a voucher’s ‘worth’ is beyond me and highlights how dangerously addictive this is)!!

In a pre-emptive pot, kettle, black, strike I’d like to clarify Raffle.it. Raffle.it is also based on a game of skill and does have one winner for each raffle, I guess we’d call it entertainment shopping too. BUT we stipulate from the start exactly how many tickets are available, at what price, and ensure that there is some form of reward that if used, is worth more than a raffle’s ticket cost for everyone that takes part. Raffle.it is on course to be a fully blown marketplace supporting people struggling to sell their stuff, schools crying out for additional equipment, charities and businesses.

I think I’m going to give it a try - the automatic bidder though is dangerous and I think is there to make them more money. It’s almost like a lottery, but with some control. I think if you’re dedicated and fast enough, you can probably snatch something up - like one of those snazzy little eee pcs. :)

Ooops i posted this earlier but not in the place i should of.

If you notice, when products sell for more than the recommended retail price this is because its a 100% off auction, click on the little banner where the 100% box is ticked and it will explain all.
If its 100% then you will only pay delivery only, so forget the final price.

I’m from the UK and ive used Telebid for a couple of months and already I have won a Sony PS3 for £52, ok i spent over £60 in bids, not only on the item i won but another PS3 i didnt win.

So yes it seems like a scam but people like me do win, its a bit of luck along with having some balls and being sneaky i suppose.

A friend of mine in one day picked up 2 Nintendo Wii’s for £30 and around £40, yes he might of finally paid more with bids but still a big saving.

If you do the calculations its obvious that Swoopo are doing very well and making lots of money but isnt that what its all about with a business, I’m not fussed because its worked for me.

Anyway, I like this site, its different and fun plus if you have a good go at it you can do ok, but dont expect to win on 10 seconds when youve only just started and only spend a 5 or 10 $/£ or €, it wont happen.

Actually, this is very similar to a common scheme used in Germany for charity auctions — I remember my high school using it to auction off some items. If I remember correctly this is called an American auction (”Amerikanische Versteigerung”) in Germany — not sure if it is popular in the US. The attraction is of course that if you are lucky you can win a lot with a single small bid, and so it tends to bring in more money for the charity while providing some entertainment. So it is really a cross between an auction and a raffle, or an auction and a poker game.

However, I have not seen this in a for-profit setting and I think this is a bit problematic. I mean, can I run a casino without permits if I pretend it is an auction that involves poker cards as part of the mechanism? Doing this online for charity would be great though.

I think that’s fine… If its a raffle/lottery/gambling scheme then they need to label it as such. Otherwise, its problematic not just from a legal standpoint (at least in the US) but also from a customer standpoint… I dont want to gamble with money unless it is obvious that I am doing so. Usually ordering electronics is not a gamble. If they are clear about what it is they are doing, then I think its all good.

This is a highly dubious business model. Who can control whether the other “bidders” a real or just faked by a computer? The whole thing has nothing to do with ‘buying’ it’s pure gambling - and since you cannot control the outcome of the game it’s not a skill game but a game of chance. Unfortunately, German Start-ups really seem to love such shady business ideas. I know a couple of similar services that I’m not going to mention here - every user becomes a loser.

It’s feels like that money scam when someone askes you for change of 40 in 10s and 5s, then confuses you into giving them more than 40.

Surprisingly I can see their ad (via Google AdSense) on this blog! - http://i34.tinypic.com/jj00mp.png !! Hmmmm ?

I’m not a programmer by any means, but it seems to me a service like this would be pretty easy to exploit with a script…

This site is terrible. I tried it out and it took my money and left me with nothing. I did find another site, 1/2 woot and 1/2 ebay that had some good deals. I got me a ps3 for a lot less than I found it on eBay. Just thought I pass it along. http://www.cowboom.com

***Disclosure – I am the CEO of Swoopo***

Your article has a couple of incorrect assumptions and conclusions.

Say I spend $500 in bids and at the last minute I’m sniped by a final bidder.

Like a real auction, bidding will continue until there are no more bids. When someone places a bid, the time is extended to allow for all interested bidders to get in their bids. Imagine an auctioneer standing in the front of a room, saying, “going once, going twice,..” If anyone bids, at this point, the auctioneer will extend the time for bidding to all of the bidders. So, you cannot be sniped.

There are also “BidButlers” who can watch the bidding for you and bid automatically, further confusing the invisible hand of the market.

Auctions for high value items can be live for a longer period of time. We have hence developed a bidding agent called “BidButler” that places bids on our users’ behalf when they cannot be online. Additionally, we are showing the bidding history of the last 10 bids clearly indicating if the bids were placed by the BidButler or not (shown on site as SingleBid).

Presumably that lost $500 goes towards buying more product for the site and increasing Swoopo’s revenue.

Any of the money received from bids will first go towards paying for the product that is being auctioned. If there is a surplus of money from one auction, the remainder will be put toward any auctions where Swoopo does not cover the costs of the products in an auction. The latter group making up about 70% of all auctions.

And, as a note, all of our auctions are for brand new, factory sealed, factory warranted items. We are currently shipping items totaling about $1.5 million to our winners every month. Needless to say that all bids are placed by real users. Swoopo cannot influence any auction after it has begun.

Interesting - I hadn’t thought of that, that perhaps the extra money from one auction covers a below-market price on another. Sounds like you have to have some faith in human nature (or psychology) to always provide bidding behavior in patterns expected to create a profit margin.

Since CEO Gunnar is reading these posts - I would ask how he is getting around strict gambling laws in usa?

USA State and Federal laws provide for severe criminal penalties.

You can verbally engineer this to mean whatever will make you feel better but bottom line - it is nothing more than thinly veiled raffle / lottery. And the “skill” requirement doesn’t fly under US laws.

Seems your company has legs and some reputable VC backing - I can’t believe you would be so stupid as to launch in the USA without first considering gambling laws that can bring down your entire company and put you in a situation where you are picking up soap for a living.

The only real winner on Swoopo’s website is Swoopo. LOL!! Total gambling scam. People can easily lose $50-$500 on just a few auctions and get nothing in return. If they are going to keep it at $1 bid, they should return 90% of the money back into the bidders acount for the people who LOSE. That way Swoopo still makes a nice profit, but the loses aren’t BIG loser and get discouraged on bidding. I’ll stick with EBAY.com, thank you very much. I can get most of my gaming goodies on EBay for %10-$50 saying and I don’t have to “PAY ANYTHING” to make a bid. Swoopo.com is a German site, so why is this being advertised in America? What a ripoff. Check out the website if you want a good laugh.

@David,
What you described is called gambling. LOL!! People in Vegas do that all the time. They will see that they’ve losed $100, but don’t want to leave a loser, so they spend more money to win what they losed. Same thing is happening here. People are bidding on products they want to win, but then don’t want to lose what they’ve spent, so they spend more to try and win the product that’s worth their cash. No difference, as sometimes you will win all your money back and some times you won’t. With Swoopo, the chances of you getting your money back is slim, unless you win the product and it’s less then the amount of your bids and the final price. Like gambling at a craps, blackjack, roulette or poker table, there are ALWAYS LOSERS. With Swoopo.com gambling con auction site, there will always be a lot of losers. The only true winner is SWOOPO.com.

@Ken,

CEO Gunnar lives in Germany, that’s how he gets around U.S. State and Federal laws. The site it hosted out of Germany. It’s still a scam to me. What can happen and probably will, is the government will have the site shut down permanently. Even though they say the lose money on 70% of the good and make profit on 30%, I honestly don’t believe that.

I’ve been watching their auctions all day and I saw a $229.00 IPod sell for $66.75 which cost bidders $445. So Swoopo made $511.75 - $229.00 = $282.75 off the Ipod. That’s almost double what the product costed. How many did the people who didn’t win lose? A lot. With EBay there is ONE clear winner and no real losers. If you lose on EBay, you just go to the next auction. You don’t have to worry about losing $20-$500 and seeing nothing in return. Good luck to the people who use this website. Supposely they have about 50,000 members. I registered and went to make a bid and found out you had to “Pay For Bids” and I said, “No way!!”. What a joke.

Beware USA bidders - if you are bidding on a laptop auction;

your bids are sometimes being used to compete against Europeans bidding for a DIFFERENT item but under the same Auction ID. Two different laptops, different specs but using same auction ID and combining the bidders to compete against each other and push up the price.
Check this out - if you open up two windows on your screen:

swoopo.com (USA) and compare with swoopo.co.uk (UK). Seem to be same auctions / different currency BUT:

Check out the laptops and you will see two different lots under the same ID - double the amount of interested bidders - only one laptop issued at auction end = FRAUD

Further to above post, check out these two auctions that were running - two different laptops were being auctioned and the bidders were being combined;

http://www.swoopo.com/auction/sony-vaio-vgn-fw140e-16-4-core2duo-vista/104131.html

http://www.swoopo.co.uk/auction/acer-aspire-8920g-18-4-core-2-duo-notebo/104131.html

Two laptops auctioned under one ID - twice the number of interested bidders from different countries forcing up the bids placed. Were 2 laptops given? NO! What did the winning bidder “mask001″ receive? A SONY VAIO 16.4″ and an ACER 18.4″ ???
Or was only one item given???????? FRAUD BIGTIME

@Mike e boy:
LULZ
Under Help, Delivery & Shipping they have this:

“Substitute items

On rare occasions we are no longer able to source the specific item detailed in the auction. When this happens, we will contact you and offer to send you an equivalent item of at least equal value. Many of the products we sell are high-technology items that have a short life-cycle, so often this will mean an upgrade to the newer version of the item.”

NICE SCAM! SCAM! SCAM! SCAM! SCAM! SCAM! SCAM! SCAM! SCAM!

@Vinay
http://i34.tinypic.com/jj00mp.png
MORE LULZ

@Gunnar Piening
EPIC LULZ

I don’t know about in the US, but here in the UK SwOOpo has been going for a while. Formerly known as Telebid, nothing has changed just the name, maybe they were trying to avoid the stigma attached them.

Anyway, there is a new site starting up over here, I think its UK only, but it sounds like they are on the right track.

Its called Price Plummet and they have a page up at the moment giving some info and a prize draw for a ps3.

It launches in December and the items start at half price or something, and you bid the price down. Also there are multiple game types and they have features which can enable you to use skill to win.

If you can use skill then I think I will be giving it a go.

anyway check them out http://www.priceplummet.com

This site is awesome and is NOT A SCAM!

Go and check it out! You will get the best price for your dollar!

kcbidz is not a scam but swoopo is a scam

Nice tool for Swoopo.
http://www.wikiwif.de/bidwatcher.php

I think these guys are making a lot out of the “auctions”. Whilst there will invariably be one winner who gets a bargain all the others will end up getting burned.

I did a breakdown of an XBOX 360 auction I participated in, seems they made around £600 from it!

I am retired and on a fixed income and tried to win my granddaughter a Wii setup. I did not realize that Swoopo kept all your bid monies and when i lost the bid at $100 for a Wii,
I was shocked to see that the whole sum was gone,just gone! I immediately wrote an email explaining that i apparently did not
understand that they totally kept the $100 and asked to be contacted about this since it was all i had and now can’t bid anywhere.
For all they brag about, they won’t even answer an email , and i have sent one two days in a row. I unknowingly made a bad move and you would think they would respect that or atleast
contact me about it. Call me stupid but i can’t read that well anymore.
I guess if i hear nothing i will have to report this event to the BBB and all the blogs i can reach. Do they really want this? Or maybe they just don’t care.
Thanks for listening
C Kozlowski

kcbidz is the best. Not a scam like swoopo