Maryland Bar Bulletin
Publications : Bar Bulletin : February 2009

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 TECHNOLOGY TALK:

BY JOHN ANDERSON  

When you visit the Swoopo auction site’s homepage, you watch as time ticks down on numerous products only to jump back up as another bid is placed. It is the next closest thing to being at a live auction. There is no end until there is a winner. Branded as Entertainment Shopping, Swoopo promises suspense, thrills, bargains and excitement.

Other auctions offer great deals, and so does Swoopo, but with other auctions the only risk you take is perhaps being outbid. With Swoopo it’s a bit different. The opportunity to win brand-new products at incredible discounts exist, but so does the more-than-likely chance that you end up with no product and no money. Is it worth the risk? In my opinion, no, but please read further and heed the warnings that lie within before putting it to the test.

Swoopo began in Germany in 2005 as Telebid and gained in popularity when it expanded to the UK in 2007. Now based in California and past the startup phase, they are making handsome profits. It is all based on a very interesting concept: new items are put up for bid, and each time a user bids, the price is increased by 15 cents. At the same time, the amount of time added to the auction also increases up to 20 seconds with each bid. If no new bids are received before time runs out, the last bidder wins the item.

Many people consider Swoopo a scam, and with good reason. This site is dangerously addictive.


Auction winners have received new Play Station 3 consoles for $15, 73-inch HDTVs for $270 and laptops for $67. It is also possible to go broke fast. It’s a gamble – literally. Here’s how it works. You pay to play. Right up front you need to shell out some greenbacks to fill up your bid bank.

Every person who enters the auction pays for each bid they make. The winner will end up with a new Wii system for $100 instead of $250, but when you add up all the bids made by all the other participants, it often adds up to quite a bit more than the retail price. Also, it is just a suspicion of mine, but I don’t think they are buying at retail. This is how they are able to offer products sold at an average 30 percent savings. But how do you get started?

You can purchase bids in packages, ranging from Small offering 30 bids at $22.50 to the ever-popular XXL, giving you 700 chances to win for a mere $525. That works out to 75 cents per bid. After you have your bids, the owners of the site suggest starting small, offering a beginner’s area to get you started as well as $10 off your first win.

Google will attest to the fact that there are more people with a gripe against Swoopo than singing their praises. Most of these people are those who quickly got in over their heads. Many people consider Swoopo a scam, and with good reason. This site is dangerously addictive. So, what does it take to win? Money, luck and patience.

What happens when you run out of money? Never fear. When your bid bank starts getting low you will get an offer to refill it. “That’s no problem,” you say, “I promised myself I wouldn’t spend more than _____ dollars.” But if you find yourself out of bids in the middle of an auction you will be tempted (and able) to rationalize the upgrade. Why? The offer and the timer. The offer to purchase more bids appears at the top of every page you visit with the chance to receive extra free bids if you act before the clock reaches zero. Another countdown? A limited-time offer? “But wait, there’s more” freebies? When I saw this it was like watching infomercials on late-night television, and there is a reason they do this – it works. It’s diabolical. Set a limit and stick to it.

Sure, you can try to develop a strategy and research what products have won for in the past, but I’ve seen one Wii game system sold for $8 while another was still receiving bids of over $200. When you examine past auctions it’s worthwhile to look at the details. In one case, a $3,000 Big Screen TV was won for $267, but it took the winner over 2,300 bids totaling $1,700 to win. In the end, he spent about $2,000 for the TV. Still a great deal, but what if he had lost?

My best advice is to know when to say when. With so much invested in an auction (75 cents per bid) it might be more than a little difficult to walk away from an auction that has climbed past your comfort point. The comfort point is the first thing you should determine before you ever start bidding.

After all is said and done, I am the proud new owner of a Wii at a cost of just about half of retail. Was it worth the anticipation, the agitation, the risk, the reward and the thrill of the hunt? Well, I think I will chalk up my success to luck and quit while I’m ahead. I’ll find comfort in the knowledge that trying to develop skill at Swoopo auctions could quite possibly be an expensive education. An education I choose to trade for the safety, the security, the memory of an exciting one-time adventure.
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Publications : Bar Bulletin: February 2008

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