Monday, July 13, 2009

The Diabolical Genius of Swoopo

I don't think all too many folks caught this article in the Sunday Washington Post on the auction website called Swoopo. Here's a taste:

At first glance, Swoopo.com -- which began in Germany as a phone and TV-based auction site called Telebid, migrated to the web as "Swoopo," and launched its U.S. site last year -- looks like an auction site patterned on eBay, with prices for most items starting at a penny and rising as members "bid" up the price. Like eBay, Swoopo has a full panoply of auction tools, such as comprehensive records of all completed auctions and an electronic bidding system ("Bid Butler") that will put in last-second bids to keep you in the auction. Unlike eBay, however, on Swoopo you pay 60 cents each time you make a bid.

Sixty cents? Sure doesn't sound like much when a $1,000-plus camera or computer is at stake. But consider the MacBook Pro that Swoopo sold recently for $35.86. Swoopo lists its suggested retail price at $1,799. But then look at what the bidding fee does. For each "bid," the price of the computer goes up by a penny, and Swoopo collects 60 cents. To get up to $35.86, it takes a stunning 3,585 bids -- and Swoopo gets its fee for each. That means that before selling this computer, Swoopo took in $2,151 in bidding fees. Yikes.

This site is something else -- I must have wasted three hours today just watching people bid on various items. It's absolutely fascinating watching just how irrational the buying gets on this site.

Here's an example:

Along with all of the great gadgets that get sold on the site Swoopo also makes bid packets available for auction that give buyers the opportunity. Below is a screen capture of two such auction that occurred right around the same time earlier today:

I'm blown away by this.

Sold individually, 300 bids on Swoopo would run $180, but as a package got sold well below that. In fact, the winner shaves 50 cents off the cost of each of his next 300 bids. The 50 bid package, however is a different story. Even though the auction is taking place, literally next door to 300 bid package, the package sells for not only $6 more than the winning price of the much better deal, and almost $9 over the real cost of 50 bids.

Really, I'm just in awe at this. Swoopo had a revenue stream of $28.3 million (!) last year. That's a lot of people playing this game. Here are some more links with some interesting things to say about Swoopo.

5 comments:

random n00b said...

Maybe the ppl writing about this Swoopo place are "normal real world" types. Who look at the phenomenon in terms of real world auctions or businesses (or even EBay) and don't do any RPGs or have never been to social sites like their kids maybe are on Gaia spending GaiaGold like there's no tomorrow or on Second Life etc., and these reporters probably have no clue what goes there, and no idea about the prevalence of ppl who spend real money for virtual items, engage in lottery/gambling type quasi-gaming behaviors where real world "gains" blend with virtual or psychological "perceived" gains or even - it just a bit of diversion. Another form of addictive gambling/gaming type behavior. The Swoopo folks may be able to argue that the process itself functions as a form of entertainment and the items are more like a prize at a carnival. And should not be compared to a shopper going in to store and emerging with merchandise in a simple and logical transation.

Continuing with the Gaia example, piles of young ppl will spend real cash to buy say - a virtual wand or virtual rave pants for their avatar to wear. The more tricked out your avie is the cooler you are. There are virtual cars and shops and you can sit your avie-ass down in a virtual theater with your virtual buddy's avie and tho YOU are in the US and HE is in Australia, you can virtually watch a REAL movie together". Then maybe you want to show your affection by buying him a gift using real money which gets converted into GaiaGold and then you buy him a new vampire cloak or maybe a virtual full body tattoo which is really just a bunch of pixels that fit into a little square. BUT then perhaps someone break "Gaia law" asm many ppl do (for example re-selling virtual Gaia items on the "side" or secondary market to other Gaia members for REAL CASH which pisses off the admins NO END) and it appears you are a guilty party, you can be locked out of your account, or any number of other issues and NEVER get your virtual items back and customer service there is a bonafide hellhole as in "you can't complain about the service in this place because there is none". So you're jus SOL.
also I don't have time to describe various romantic complications that occur between avatars, but...omg whatta steamy jungle.

So I admit I haven't the time to form a proper opinion on Swoopo, my instinct is that it's a case of applying real life concepts of "normal" to internet culture(s) You can't.

also for the folks who say I just made no sense TFB - that was a short-hand description to illustrate the 9 billion ways that cash-for-item no longer exists in a lot of ways really,
and anyway I only stopped by to say Hi to the Chief (who I realize would NEVER stop by MY blog to do the same) but that's the way it goes. So... Hi Chief

(gawd it's been so long I don't know me own password. hmmm..oh yeah)

Anonymous said...

HI IF YOU WANT TO KNOW ALL
THE SCAMS TAKE ATRIP TO 230357342803 ON EBAY
THEN YOU WILL BE AT PEACE
REGARDS
THE ONE THAT KNOWS!

random n00b said...

Caps-lock typin' loser bursts into flame and dies

*crowd goes wild*

victor said...

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thanks for sharing with us


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