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Swoopo and Faith in Humanity

Edit: It appears that Swoopo is no longer in business. I'll leave this here for posterity sake.

I’m sure you’ve seen the ads, a $1500 TV selling for $86.00, an $800 digital SLR selling for $50. After ignoring the ads for some time, I had to check-out Swoopo .

Upon visiting the site, I had 2 thoughts:

1.    Why didn’t I think of that?
2.    Wow, there are some stupid people out there!

I’ve read a lot recently about people thinking that Swoopo is a scam or a rip-off or something untoward and should be shut down. After looking into the site a bit, I whole-heartedly disagree. Swoopo is another means of entertainment and you do have to have a measure of intelligence to use the site.

To illustrate, I’d like to use two examples from the site ...

First, for those of you that don’t know anything about Swoopo, here’s a brief primer:

  • All auction start at $0.00
  • Each bid raises the selling price by $0.12 in a standard auction
  • You have to pay to bid and bids cost $0.60 each.

There you go. That’s really all you need to know to have a basic understanding.

Now, let’s look at a couple examples from the site: A Winner, and a Loser.

The Winner

An auction for a 47-Inch Phillips 1080p LCD HDTV recently closed. The final selling price of the auction was $86.94. Swoopo says the TV is worth $1449.99, but I can buy it at Sam’s Club for $1198.00. The auction was a 2-cent auction, meaning that each bid only increased the selling price by $0.02 rather than $0.12.

In order to win the auction, the winner had to cast 174 bids. Remembering that bids cost $0.60 each, he spent $104.40 just bidding. So, doing the math:
$  86.94 (the final selling price)
+ 104.40 (the cost of the 174 bids)
+  69.90 (shipping)
 $261.24 (Total Cost)

This person just bought a TV that retails for $1198.00 for $261.24.

He’s a Winner!

The Loser

Another auction for a Nintendo DSi Console in Blue recently came to an end. The final selling price of the game was $103.92. Swoopo said the game is worth $169.99 and I can buy it at Sam’s Club for $164.88.

At first, it looks like a good deal ... but, wait, there’s more ...
To win the auction, the user cast 157 bids. Let’s do the math on this one:
 $103.92 (final selling price)  
+  94.20 (the cost of 157 bids)
+  12.90 (shipping)

This user just spent $211 a game that I can buy for $165.

He’s a Loser!

The Ultimate Winner

Some people have asked, “How can Swoopo sell a TV that costs $1500 for $90?” Here's how:

Looking at the first auction, we know that it closed at $86.94 and that it was a 2-cent auction. That means that each bid only increased the price by $0.02, telling us that, in order for the price to reach $86.94, there had to have been a total of 4347 bids cast. Remembering that each bid costs the user   $0.60:
     4347 (bids)
x   $0.60 (cost / bid)
 $2608.20 (total bid cost)
+   86.94 (final selling price)
 $2695.14 (total earnings for Swoopo)

Swoopo just made $2695.14 on that auction. The winner took home a TV for $1000 off retail and Swoopo can go buy 2 more. Everyone is happy.

The second auction is just as fun for Swoopo. 
    866 (bids ($103.92 / 0.12))
x $0.60 (cost / bid)
$519.60 (total bid cost)
 103.92 (final selling price)
$623.52 (total earnings for Swoopo)

They made $623 dollars on a game that retails for $165!

Final Thoughts

If you use your intelligence, you can get some good deals on Swoopo.

If you don’t know when to say when, don’t use Swoopo. You have to be careful and pay attention and use your head, lest you find that you’ve spent over $100 with nothing to show for it. If you are that person, don’t rant that it’s a scam and a rip-off. It’s not their fault you weren’t thinking.

All-in-all ... Swoopo gets filed under ‘Man, I wish I had thought of that.’