How to understand Swoopo
Have you gone to Swoopo.com and wondered how on earth they can sell their items for sometimes 75% less than retail, and still remain in business? This article will explain how that works.
Understand that Swoopo does not work the same way typical auction sites work, such as Ebay. Typical auction sites allow users to bid for an item by offering a monetary amount determined by the user. Swoopo sells bids which will be used in place of those monetary amounts, and the amount those bids will equal will be determined by the current level of value the item has accrued. For instance, a single bid could be used as a $1.00 bid, or a $50.00 bid.
Bid auctions are run the same way regular item auctions are run.
Every time a bid is placed, it costs the user money. Currently it is $0.75 per bid. This cost is implemented even if the user does not win the auction. For instance, if you bid once, you will owe Swoopo $0.75 automatically. If you bid twice, you will owe them $1.50, etc.
There are multiple auction formats at Swoopo, the most utilized is the $0.15 auction. This means that for every bid, the price increases by only $0.15. Another format used is the $0.01 auction. This means the price increment is only $0.01 per bid.
At every bid, more time is added to the auction, which eliminates the ability to ‘snipe’ an auction at the last second. When someone bids, everyone else is automatically granted more time to bid again.
If you guess correctly, you can find incredible deals at Swoopo. Things which might sell regularly for $400.00 might go for a final price of $150.00. If you made the final bid and have not spent many bids to get there, good for you, you got a great deal.
In the above case, in order for the price to reach $150.00, the item had to receive 999 bids for a $0.15 auction, one winning bid, and 998 losing bids. Remember, Swoopo gets paid for all bids, winning and losing. 999 bids at $0.75 each is $749.25. The item retails for $400.
The winner of the auction still pays the final price of the auction. If the price is $150.00, the winner still pays the $150.00. Now Swoopo has made $899.25 off the $400.00 item.
Remember, Swoopo only allows users to bid on auctions using bids they sell. So you must purchase the bids, pay $0.75 for each one you use, THEN pay a final price if you win an auction. The cost for these auctions for the users is tremendous.
Another auction type is the $0.01 auction. This means for an item that has a final price of $100.00 has received 10,000 bids. Again, at $0.75 per bid, that comes to $7,500.00 that Swoopo has received, BEFORE the $100.00 is payed.