Stay Away From Swoopo

by

swoopo

I have a pretty extensive history of mucking about in the online auction space. I picked up my very first DVD player (new) at a steep discount in 1998 via Ubid (or maybe it was Microwarehouse’s auction site). Over the years, I’ve also unloaded a ton of gadgets and more on ebay, originally via my own account and most recently via a real world consignment shop. And yesterday, after seeing a ton of ads and catching the NY Times write up, I gave Swoopo a try.

Swoopo positions themselves as a spend to save, shopping entertainment site. But this ain’t no Mercata. Bidding on the nice looking new inventory runs 60 cents a pop. (Bid units are bought in bulk, with 40 @ $24 being the lowest entrance fee.) Which doesn’t sound like much, but with limited merchandise and numerous competitors you’re going to spend a pretty penny to most likely fail in your quest. Plus, each bid extends the time remaining in an auction by a preset amount of seconds. Resulting in additional bids.

I blew about $30 trying to pick up the nice looking Panasonic Lumix TS1 waterproof digicam last night. The winner ultimately nabbed the camera for about half off, but who knows how much he spent for that honor. And the automated BidButler sniping feature he used takes away the competitive joy. In fact, I wonder if I’m bidding against pros who’ll ultimately resell their bounty. I’m also left with a somewhat dirty feeling using Swoopo, which is more akin to gambling than other auction sites. And, as with Vegas, the house always wins.

13 thoughts on “Stay Away From Swoopo”

  1. Yeah, I was also intrigued by Swoopo about 8 months ago or so when I first came across it. They are just printing money it would seem. If you add up the number of bids, especially on the penny auctions, they are getting tens of thousands of dollars for a $1500 laptop that they sell for $750 or so. No doubt some people get quite a deal, but most people get nothing and as you say, the house wins handsomely.

  2. I too looked at Swoopo after seeing the ads on places like SlingCommunity. I was about to try it until I found out you have to pay something like $40 just to be able to bid. I figured that, yeah, if you really want something, maybe you can get it if you spend the time watching the item and then playing the game. Perhaps you’ll get a TivoHD XL for $30 and spend $150 in bids. It’s still a great deal. But what if you spend that $150 and don’t win. It’s too much of a risk. I doubt many people place two or three bids and walk away with an item.

    For me, I prefer to stick with eBay when I want something. Doesn’t cost anything to bid and I can easily set the limit for what I want to pay for an item and after that not worry about it.

    As the old adage goes, “If it sounds too good to be true, it probably is.”

  3. I actually tried this back at the beginning of the year, and managed to get a tomtom 900? something for 50$ all in, but yes, it could have gone the other way and I was out 30$ in bidding chits. I think the model was VERY attractive when there were fewer participants, but at high participation the risk of NOT winning after actually PAYING a bunch of $$, is high. They apparently made a LOT of money, even selling this stuff at what appears to be WELL below their wholesale value. Sure they do, if each of FIVE people bid 20 times, they get 100+ bids in pure profit. If not more.

    I think it will quickly come out that it is probably better to bid on ebay for a bestbuy closeout or refurb than a lot of the items on swoopo.

  6. Thanks for the heads-up. Here’s one in return.

    I got the Panasonic Lumix TS1 about a month ago, for swimming pool photos of my new son. A few items to know:
    -AVCHD Lite on a Mac requires iLife ’09
    -No lenscap whatsoever, which makes me anxious, so I’m now looking for a case
    -Photo and video are quite satisfactory to my untrained eye
    -Friends are consistently delighted to see a camera dunk in the water

  7. I lost some money on this site about a year ago. Gutted.

    Came and back and was surprised to see you can buy the thing you bid for. It’s frickin’ awesome! Spent about 200 bids on a PS3 console and lost, but bought it after for a normal price minus the amount I had put in bidding before.

    I think I’ve broken even now. Won a mouse the other day, so can’t complain. Just got to try and not lose any money in the future.

    So yeah, moral of the story. I say bid if you really want it and would be prepared to pay the full price for it anyway.

  8. I tried Swoopo. Fun and exciting. I didn’t win but applied all my lost bids to buy the item. They call this “Swoop-it.” Now if I am going to buy something, I’ll try to win it on Swoopo and have fun and maybe get a great deal, but there is no downside because if I lose, I’ll just buy it from them!

  11. Correct me if I’m wrong, Dave, but I though Swoopo wasn’t allowed to do business with Maryland residents.

  13. Alexi, I’m not sure. But you might have missed the posts where I moved to VA. Suppose this applied to you, tho!

    PeteyNice, No I moved to Virginia to win prizes on Xbox Live’s 1vs100. ;)

    FYI I had an interesting email exchange yesterday with Howard Hartenbaum, who reached out to me in regards to this post. He’s both a Swoopo investor and board member. We don’t see eye to eye on the benefits of the service, which he says is a no-lose proposition – the fun of trying to get a product, the possibility of winning, and the ability to purchase it outright with bid credits when you don’t. I have a less rosy view and find this to be somewhat predatory and deceptive. Howard believes they can improve that perception by better upfront communication in explaining exactly what the service is and how it operates. Regardless, I suspect they will do very well financially as long as the regulators leave them be. But I wouldn’t sleep at night if this were my baby.

  14. Ahh – I see. Well, congrats on the move. I’ll have to think of some way around MD’s laws for any future Swoopo purchases or 1 vs 100 play.

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