Swoopo: Scam or Real

I saw an ad while checking my email today on gmail; It was a request to put up a bid on swoopo for a MacBook Laptop. Swoopo is a commercial site that allows users to bid on specific items.

The way it works is simple: You buy a couple bid’s: each bid is currently worth $.60 and for each bid you make on a product, a bid is taken from your stack of bids (similar to how Dave and Busters work where you pay money to get some tokens and then you use those tokens to play games, arcades, etc)

However, before I even toyed with the idea further, it was quickly apparent to me where the trickery was:
Since you are not able to bid by naming the price you want and Swoopo is the seller, it is very easy for Swoopo to game the system. Swoopo makes money when you use one of your bids. Therefore, the more people that make bids on an item the better for them; it makes sense that Swoopo could easily push in a bid from the backend. This effectively drives up the bid price and keeps the ball rolling on the bids. (cha-ching)

The Swoopo scheme is a genius idea; if you have an item that has a market value of $20 and then Swoopo lists this item… well since each bid is worth $.60 all Swoopo needs is just 33+ people to make a bid and they would have covered their cost of the item! When you factor in the fact that you could easily have thousands of people bidding on an item, its so easy to see how Swoopo would recover the cost of the original item and how customers effectively loose money.

The way eBay works is by far better and more transparent – eBay allows individuals to auction their items. This in effect is the transparency by which auctions are done. When Swoopo puts up an item for bidding, consumers are never sure that Swoopo is not gaming them!

In my opinion this is a site to stay away from; unless, perhaps, I’m missing something- in which case I would like to know.

Please tweet, share, send this article to your friends – lets stop the gimickry!