Swoopo.com
Nov 6th, 2009 | By Gene A. Wright | Category: General, Information TechnologyThanks James(I have posted his email to me)
1) Basic bidding site with similarities to ebay.com. However each item is preset with a specific bid increment. For example the item may be preset that each bid will increase the price of the item by $0.12. You can’t just bid up an item from $1 to $50 in one fell swoop.
2) In order to bid on items, the user needs to pre-register, but ALSO has to purchase “bid packs”. Basically, you pay for the right to bid, you prepay for this right. Each bid costs the user $0.60.
3) If enough users pre-buy their bids, swoopo.com can basically have their inventory paid for before they even go up for bid.
4) Bidding can potentially go on for eternity. When the initial timer for the auction starts running down, each item has a preset clock that will reset with each new bid. One of the items I was watching had a 10 second clock, so each bid towards the end of the auction will reset the timer to 10 seconds. The auction only ends when there are no more bids. This feature might protect against “e-snipe” that is used on E-bay to steal away auctions at the very end.
5) All bids cost the bidders $0.60 per bid, whether you win the item or lose the item. So the longer you bid, the more sunk costs you have invested in the item, the more you may pursue winning the item “at all costs”.
6) The site is being marketed as “Entertainment Shopping”. I can see why.
The person who is bidding on an item must develop an emotional attachment to the process & the end result. The great feeling of buying a plasma TV for $75 winning bid. However the math behind the scenes is different.
Example below…
I was watching an LG cell phone that had a value (published by the
website) of $250.00 and the pre-set bid increment was $0.06 (touted as a
benefit that it is lower than the traditional $0.12 increment, although
that means swoopo.com will collect more bid fees to get the item to $50
price than if the bid increment were higher).
The bidding was up to $39.12 at last point which equates to (39.12 /
0.06 bid increment) 652 bids. Swoopo.com would have collected $0.60 for
each bid for a total of $391.20 plus the winning bid of $39.12 – - grand
total $430.32 for a $250 phone. BRILLIANT. With the 652 bids and a 10
second timer, the bidders are invested in this product for a minimum of
1.8 hours, speaking to the emotional attachment I noted above. “I’ve
been bidding on this for 2 hours, I’m not going to lose it now”.
The winning bidder will possibly pay much less than the $250, so the
consumer is satisfied with the good deal and Swoopo.com makes out like a
bandit. BRILLIANT
Anyway, not sure if you knew about this site, I certainly will never use it, but it is a very interesting business model.
PS: the LG Phone example above is now at $50.52 so all my math changes during the time I wrote this email, the bidding continues.
Goes to show that “rules” are always changing. What a novel business model that really gets someone emotionally envolved in a purchase. You think you are getting a deal and your keep bidding because of the sunk cost already invested in the bidding process. I watched a couple of item and it drove me crazy, but the bidding kept going a 60 cents a pop.
I agree with rsa. This type of setup could definitely get the buyer emotionally involved in the purchase. He/she could be thinking to himself/herself “look, I’ve already come this far and spent x amount of money, I might as well follow this through to the end and recoup some of my losses by ‘winning’ the bidding war.” This setup is a great business model and I am sure someone is making good money. This is capitalism at work…and it’s great.
Swoopo’s “entertainment shopping” puts an interesting spin on e-auctions. The bid log, count down timer, and timer reset provoke the consumers competitive nature and emotional attachment to the product. This keeps them engaged and bidding until they have won (aka purchased) the product. I could see some people actually paying more than the suggested retail price just to “win” the auction.
Personally, I don’t have the patience or time for Swoopo’s e-auctions. I will remain loyal to EBay and the “Buy It Now” method.
This is a really neat business model and one that could be duplicated in other areas. You could bid on vacations or hotels in the same way or even business services…
This almost seems to me like gamebling, in terms of the Entertainment factor. We all know that half the reason we gamble is for the rush, and this seems to be based on the same principle. With a bidding process that prevents “sniping” I can definitely see more users trying this out. The consistent bid amount seems to be a good idea, from a business standpoint. User’s won’t really realize how much money they spend until it is all over, because they are consumed with “the hunt”.
After seeing this in class, I went home and signed up and paid 45 bucks 75 bids. Let me tell you, it was a waste of money, and I walked away with nothing.
The business idea is great since I fell into the trap and lost money, while they made money. The idea of the BidBulter is even a better idea. The BidBulter will make your bids for you, which allows you to lose more ‘bids’ quicker. I lost 20 bids in about 30 seconds because it would just keep outbiding the highest person without taking time into consideration.
I really like that the timer resets after each bid. This may increase the final price consumers pay but I’ve had SO many products stole from me in the last 10 seconds of an eBay auction!! It’s so frustrating.
“5) All bids cost the bidders $0.60 per bid, whether you win the item or lose the item. So the longer you bid, the more sunk costs you have invested in the item, the more you may pursue winning the item “at all costs”.” This is going to scare people away. It’s a good revenue concept, but 60 cents seems a little outrageous.
After class I went to this website and I could not belive how easy and user freindly this site was. It is the funest time I ever had gambeling. I was lucky enough to win and at the end I paid close to 200 more than the actual price of the product itself and it was still a great price. The funny part is that I felt proud, exsited, and a “Winner” at the end.
This is an excellent business model. Upfront work spent on developing software and algorithms…..and that’s basically it! The website does the rest. The only thing I don’t like about this is that I didn’t think about it.
This to me seems somewhat sketchy. I feel like you should only use this if you know the system like super well or else you are just wasting your money. If you know what your doing, hey go for it but if you don’t you should stay away. I also thing, like gambling, this could get really addictive to some people. I could see someone just wanting to win so bad that they’ll forget they’re paying for each bid! I don’t trust myself enough to use this but i think it’s great for all those out there who know how to use it to get amazing deals!
I like the idea of the bidding clock being reset towards the end. From experience I know that people have ways of purchasing the product at the very end with small application that wrote. This not only gives the seller the best possible chance to make the most cash, but also gives the buyer the opportunity to purchase that product at the highest amount of money they are willing to spend.
I went onto Swoopo.com and watched some of the bidding and I was a little addicted and I was not even making any bids. It was enticing to see very expensive items for very low prices. However once you did the math on some of the products being offered you realize how much money Swoopo.com is actually making.
My biggest concern is that Swoopo.com has employees that are doing some of the bidding to just keep other users bidding and making Swoopo $0.60 a bid. It that is the case then it is a scam, if not it is a brilliant new business model.