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| '''Swoopo''' is an online auction website<ref>[http://www.myfoxla.com/dpp/news/web_links/Maria_Surfs_The_Web_Swoopo_com_20090408 Maria Surfs The Web: | '''Swoopo''' is an online auction website<ref>[http://www.myfoxla.com/dpp/news/web_links/Maria_Surfs_The_Web_Swoopo_com_20090408 Maria Surfs The Web: | ||
| Swoopo.com]</ref> where users have to pay for credits that they use to "bid" on items on the website. Each bid costs $0.75 and each bid made by a user will instantly extend the time of the auction by 10-20 seconds depending on the item. The auction countdown will not reach zero until only one bidder is left remaining; an auction can literally remain under 1 minute of time for several hours due to several bidders trying to outbid one another. All bids made by users who did not win the auction will be lost and not refunded. For example, if a bidder bids 10 times on an auction and does not win the auction, that bidder will have lost $7.50.<ref></ref> It is for this reason many have spoken out against Swoopo as a bid-fee scheme (a bidding fee scheme differs from an actual auction by the fact that participants must pay a non-refundable fee for the privilege of placing a bid in an auction-like process) or "a gambling site in disguise, a legit scamming site."<ref></ref><ref></ref> | |||
| Swoopo.com]</ref><ref name="register"></ref> where users have to pay for credits that they use to bid on items on the website. | |||
| == Company == | |||
| Founded in Germany in 2005, Swoopo launched their UK website in December 2007, followed by Spain in May 2008 and the US and Austria in September 2008. | |||
| Swoopo was originally named Telebid, until the name was changed in August 2008 as part of Swoopo's global rebranding. | |||
| The company currently has around fifty employees, and three offices in Munich, Germany; Silicon Valley, California; and London, UK. | |||
| == Mechanics == | == Mechanics == | ||
| Customers buy bids in advance (costing $0.75 each in the US, or 50 pence in the UK). Most "auctions" begin at $0.15 or 8 pence, and increase by the same amount with each "bid". Some items, known as "penny auctions", only increase by $0.01 for each bid, but still cost contestants $0.75 per bid. Each bid also increases the auction's end time by 10-20 seconds. Although the contest winners often pay a low price, Swoopo earns money from the bids placed.<ref>http://www.swoopo.com/new.html</ref |
Customers buy bids in advance (costing $0.75 each in the US, or 50 pence in the UK). Most "auctions" begin at $0.15 or 8 pence, and increase by the same amount with each "bid". Some items, known as "penny auctions", only increase by $0.01 for each bid, but still cost contestants $0.75 per bid. Each bid also increases the auction's end time by 10-20 seconds. Although the contest winners often pay a low price, Swoopo earns money from the bids placed.<ref>http://www.swoopo.com/new.html</ref> | ||
| For example, if an item in a "penny auction" retails for $1000 sells for $80, 8000 bids must have been placed. For these 8000 bids (at $0.75 each), Swoopo earns $6000. | For example, if an item in a "penny auction" retails for $1000 sells for $80, 8000 bids must have been placed. For these 8000 bids (at $0.75 each), Swoopo earns $6000. | ||
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| }} | }} | ||
| </ref> | </ref> | ||
| Swoopo sites are all the same worldwide. For example, UK Bidders will be bidding on the same items as a Bidder in the US. This enables round-the-clock bidding, which means that bidding during the night does not significantly increase one's chances to win an item.<ref>http://www.codinghorror.com/blog/archives/001196.html</ref> | |||
| == Controversy == | == Controversy == | ||
| The method of selling employed by Swoopo is controversial and has been criticized |
The method of selling employed by Swoopo is controversial and has been criticized as being 'scam-like' and like 'gambling', something which is denied by the company who claim that winning auctions involves skill and is not reliant upon chance.<ref>http://www.blnz.com/news/2009/04/06/Entertainment_E-Com_Webs_Retail_Stage_0796.html</ref> ] writing for ] blog called Swoopo a "scary website that seems to be exploiting the low-price allure of ]s".<ref> "An All-Pay Auction", Ian Ayres, 12/16/2008, </ref> Some critics have called Swoopo "about as close to pure, distilled evil in a business plan as I've ever seen." Referencing the fact that Swoopo uses "business plans that are almost certainly illegal, at least here in the US."<ref></ref> | ||
| Speaking to the BBC, Professor Mark Griffiths of Nottingham Trent University, stated that "penny auction" sites should be regulated by the ]. However the Gambling Commission said that it "was not convinced that penny auctions amounted to gambling."<ref name="bbc"></ref> | Speaking to the BBC, Professor Mark Griffiths of Nottingham Trent University, stated that "penny auction" sites should be regulated by the ]. However the Gambling Commission said that it "was not convinced that penny auctions amounted to gambling."<ref name="bbc"></ref> | ||
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| == See also == | == See also == | ||
| *] | *] | ||
| *] | |||
| == References == | == References == | ||
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| * | * | ||
| ⚫ | ] | ||
| ] | ] | ||
| ⚫ | |||
Revision as of 12:20, 20 April 2009
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 | |
| Type of site | Online auction site |
|---|---|
| Available in | English, German and Spanish |
| Owner |  Entertainment Shopping AG |
| Revenue | €20 million in 2008 ($28.3 million) |
| Employees | 50 |
| URL | http://www.swoopo.com/ |
| Commercial | Yes |
| Registration | Required |
Swoopo is an online auction website where users have to pay for credits that they use to "bid" on items on the website. Each bid costs $0.75 and each bid made by a user will instantly extend the time of the auction by 10-20 seconds depending on the item. The auction countdown will not reach zero until only one bidder is left remaining; an auction can literally remain under 1 minute of time for several hours due to several bidders trying to outbid one another. All bids made by users who did not win the auction will be lost and not refunded. For example, if a bidder bids 10 times on an auction and does not win the auction, that bidder will have lost $7.50. It is for this reason many have spoken out against Swoopo as a bid-fee scheme (a bidding fee scheme differs from an actual auction by the fact that participants must pay a non-refundable fee for the privilege of placing a bid in an auction-like process) or "a gambling site in disguise, a legit scamming site."
Company
Founded in Germany in 2005, Swoopo launched their UK website in December 2007, followed by Spain in May 2008 and the US and Austria in September 2008.
Swoopo was originally named Telebid, until the name was changed in August 2008 as part of Swoopo's global rebranding.
The company currently has around fifty employees, and three offices in Munich, Germany; Silicon Valley, California; and London, UK.
Mechanics
Customers buy bids in advance (costing $0.75 each in the US, or 50 pence in the UK). Most "auctions" begin at $0.15 or 8 pence, and increase by the same amount with each "bid". Some items, known as "penny auctions", only increase by $0.01 for each bid, but still cost contestants $0.75 per bid. Each bid also increases the auction's end time by 10-20 seconds. Although the contest winners often pay a low price, Swoopo earns money from the bids placed.
For example, if an item in a "penny auction" retails for $1000 sells for $80, 8000 bids must have been placed. For these 8000 bids (at $0.75 each), Swoopo earns $6000.
In $0.15 auctions, Swoopo receives more than the retail price for the item from bidders as long as the final price is above 16.7% (one-sixth) of the retail price. This is because for each $0.15 of the final price, Swoopo is paid $0.90 total ($0.15 by the winner of the item plus $0.75 by a bidder). Because $0.90 ÷ $0.15 = 6, Swoopo is paid 6 times the final price each item in a $0.15 auction.
In one auction bidders paid a total of $27,675.50, including the "fixed price" of $98, for a $1300 item.
Swoopo sites are all the same worldwide. For example, UK Bidders will be bidding on the same items as a Bidder in the US. This enables round-the-clock bidding, which means that bidding during the night does not significantly increase one's chances to win an item.
Controversy
The method of selling employed by Swoopo is controversial and has been criticized as being 'scam-like' and like 'gambling', something which is denied by the company who claim that winning auctions involves skill and is not reliant upon chance. Ian Ayres writing for New York Times blog called Swoopo a "scary website that seems to be exploiting the low-price allure of all-pay auctions". Some critics have called Swoopo "about as close to pure, distilled evil in a business plan as I've ever seen." Referencing the fact that Swoopo uses "business plans that are almost certainly illegal, at least here in the US."
Speaking to the BBC, Professor Mark Griffiths of Nottingham Trent University, stated that "penny auction" sites should be regulated by the Gambling Commission. However the Gambling Commission said that it "was not convinced that penny auctions amounted to gambling."
See also
References
- [http://www.myfoxla.com/dpp/news/web_links/Maria_Surfs_The_Web_Swoopo_com_20090408 Maria Surfs The Web: Swoopo.com]
- Swoopo Terms of Service
- Swoopo is a gambling site in disguise
- Published Opinion
- http://www.swoopo.com/new.html
-
"Auction results page for a fixed price auction with 36,769 total bids". 2008-12-20. Archived from the original on 2008-12-20.
Price: $5,515.50 This auction ended on Nov-08-2008, at 20:02 PST Worth up to: $1,249.99 Placed bids (336): $252.00 FreeBids (98): $0.00 Final price: $98.00 Savings: $899.99
{{cite web}}: line feed character in|quote=at position 75 (help) - http://www.codinghorror.com/blog/archives/001196.html
- http://www.blnz.com/news/2009/04/06/Entertainment_E-Com_Webs_Retail_Stage_0796.html
- "An All-Pay Auction", Ian Ayres, 12/16/2008,
- Profitable Until Deemed Illegal
- Penny web auctions under scrutiny