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Swoopo – Legitimate Auction Deals or a Scam?

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I’ve never purchased anything from Swoopo and haven’t seen their financials, but after looking at their site and reading several reviews I’ve decided it is probably one of the most brilliant business models I’ve seen.

What is Swoopo?

Swoopo is an online auction site that sells high end electronics and other goods at ridiculously low prices. I mean silly low. Plasma and LCD TVs regularly go for under $100 – and they aren’t small either. We’re talking over 40 inches. High end laptops and video recorders also regularly sell for under $100. The prices are amazing. But there’s a catch.

How it works: Swoopo’s online auction system differs from the more popular EBay. Instead of allowing bidders to bid any amount, Swoopo only allows bidders to bid in fixed amounts ($0.15) and charges bidders $0.75 per bid. That’s right, Swoopo charges people to make a bid. Here is the bidding process as advertised by Swoopo:

  • Bidding on our auctions starts at just 15c, with no reserve prices.
  • The price only goes up by 15c with each bid placed.
  • If a bid gets placed in the final moments, we extend the auction by up to 20 seconds.
  • Each bid placed on an auction costs just $0.75, enabling us to offer such amazing deals.

Watching an auction. If you visit the Swoopo homepage you can see current auctions taking place. As the auction gets down to the final seconds a bid raises the price by $0.15 and adds more time to the clock. Since it only costs a few cents to make a bid, why not take a chance? And that is what people do. Except there are also automated programs that allow bidders to set a limit on how many bids they are willing to make and/or how high they are willing to bid. It can add up quickly! Watching the auctions is almost hypnotizing and I can see how easy it would be to get sucked in.

Is Swoopo a Scam?

I read several online articles stating Swoopo is a scam. But after watching a few auctions and looking at the site, I don’t think it is a scam. I’m pretty sure everything is as advertised. But I also think that some people get upset with the bidding structure or may not understand it.

Bidders have to pay to make a bid, and once the auctions end, the winner gets the item and the losers go home with a lighter wallet and no prize. I can see how this makes for sore losers.

Swoopo is a great deal – for Swoopo!

As I mentioned in the opening paragraph, Swoopo’s business model is amazing. People have a tendency to give in to temptation, and what could be more tempting than a 42 inch plasma TV for less than $100? The beautiful thing (for Swoopo) is that it takes 600+ bids to get to that level, and Swoopo makes money on each bid, plus the winning bid. Swoopo also offers penny auctions, which raises the bid price by one cent instead of fifteen cents. These auctions are also big money makers because thousands of bids take place before the final sale.

What about the items they sell for pennies on the dollar? The folks at Swoopo LOVE selling high end items for pennies on the dollar. It is the best advertising they can get. Swoopo has stated they lose money on many of the items they sell, but my guess is that they make a boatload on the other items. Trust me, they wouldn’t use this business model if it weren’t profitiable.

Should you use Swoopo?

I’m all about saving money. But I wouldn’t rely on Swoopo as a way to purchase electronics at a steep discount. In my opinion, Swoopo equates to little more than gambling. You could win big, but the odds are stacked against you.

Here are a couple more articles about Swoopo:

Have you used Swoopo? What do you think about it?


Published or updated December 29, 2011.
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{ 39 comments… read them below or add one }

1 Miranda

Thanks for this look at Swoopo. I’d been wondering about it myself. It makes sense that they can make a lot of money if everyone pays every time they bid. I also like it that you equate it to gambling: You have to pay each time you bid, whether you win or lose.

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2 Fudge

I tried Swoopo and it was a waste of money. You won’t win anything unless you get lucky or you’re willing to put a lot of money in to bidding. Basically, if you know what you’re getting in to, you won’t do it. I regret wasting my money on that site.

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3 Jan

Sounds like some kind of ponzi scheme to me … you are actually paying for winners discount on LCD.

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4 Ryan

LOL. That’s an interesting way to look at it.

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5 Jeremy Olexa

Oh wow. Pretty crazy business model that they have going there… Looking at some auction for a iMac 24″ Desktop. Its up to 70 dollars right now which is well below the MSRP of 1800. Since it is a penny auction, that is 7000 bids at $0.75 a piece = $5250. I wish I would have thought of this! What a money maker ;)

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6 Ryan

I wish I would have thought of it too. :)

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7 Craig

Have you personally tried it yet? Sounds like a cool system and could help them bring in revenue and I’m sure is a smaller team and has less expenses than an ebay. Pretty cool structure but of course a risk. Curious if anyone has tried it.

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8 Ryan

No, I haven’t tried it yet. I don’t think I am going to. I think it’s closer to gambling than shopping. I don’t think it is wrong to go for it, but I think it would be difficult (or expensive) to win.

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9 No Debt Plan

I saw it a while back. Genius business model as Jeremy did the math there. It’s a great deal for the winner — if you only put in a handful of bids at the end.

The problem then turns into well everyone waits until the end, or uses automated programs, and the auction gets extended, extended, extended…

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10 Ryan

That’s the point. ;-)

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11 DDFD at DivorcedDadFrugalDad

I have heard of this scheme, I mean site, before. Sounded like a scam then and sounds like one now . . . just doesn’t pass the sniff test. Thanks for the review.

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12 paul

you sniffed it!!!

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13 Montana

Hello all, nice to “meet” you! My name is Montana, and I work at Swoopo.com. I manage their online content. I appreciate all the curiosity surrounding Swoopo.

Yes, we charge for bids. We charge so we can provide our bidders with brand new items (most items even come with warranties.) The wonderful thing is when you win, and people do win, you can save on big ticket items for as much as 91% off retail price (including the price you pay for bids.)

I suggest doing a little research before you start. We also have beginning auctions for people looking to get their feet wet.

We have full disclosure on our site. We also provide an extensive help menu to help get you started.

If you’d like to follow the company, hit us up on Facebook or follow us on Twitter http://www.twitter.com/swoopo.

Thanks.
Best,
~MT

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14 Big Fatty

Everyone knows what a scam this is. Go away.

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15 ho_ho_ho_29

Dear MT,

Thanks for your respectful post. I personally don’t understand all the negativity. Swoopo is not a scam. It is a ingenious system that makes a lot of profit. Whoever came up with it is highly intelligent. Swoopo is a fair seller.
However, that said, the system benefits only a few individuals, the winners. Therefore, it is not profitable for most people. Personally, I will never use it, purely for the fact that although the rules of the game are clearly stated and enforced and the game is fair in that sense, the game itself is very hard to win. Anyone with commonsense will not play it.

Sincerely,
Santa Clause
(yes, magic is real)

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16 mitsu gon

yeah think about if the swoopo sell a tv 56″ for $120.00 and every bid you pay $0,75 bid go up 0,15 cents total price $750.oo still they can make alot money .
you pay cheap but the money is on the bid . just like buy a lot ticket

you pay $1.00 but could win million .

i buy alot things on swoopo didnt make me rich yet but gave me new life .
cause you still can resell what you buy .

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17 nick

It is a COMPLETE scam. i paid over 20 bucks on one auction, were there were many people bidding. every time i would bid, many people would also bid right after. But the one time i dont bid, its like everyone just stops bidding and someone wins. It would be a coincidence if i happedned 1s or 2s. But this happened around 7 times for me and i lost a days pay check. SCAM, dont do it, its worse than gambling and its a complete scam

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18 Brian

I think the business model is ingenious. However, I would not participate for the very same reason the gentlemen who posted above me lost a day worth of pay trying to win auctions.

Being that the Business itself is making money off the bids, I would feel there would be less likelihood for any internal monitoring system from preventing a self-outbidding scheme from taking place.

Lets look at it this way.

Swoopo puts up a hot item… lets say a 50″ Plasma TV. Bidding opens up at $1.00 with a half hour bidding time.

It gets a few bids and by the time it reaches a 5-Minute marker it is still priced rather low at lets say $27.00.

Now is where the “Fun” begins. With time breaking 5-Minute marker, the bidders watching the auctions are getting more tempted to closely watch the item to try to “pick” their moment, hoping no one else is going to bid.

By the time it breaks 1 Minute remainder time on auction, the 50″ Plasma is up to $50.00. If it was a $0.01 auction item, each bid was increasing the auction price by $0.01 / increasing seconds on item by 1-4 seconds (from what I witness watching an auction today). Each bid transaction comes at a cost of $0.60. For the item to have reached a price of $50.00, there would have been4,900 bids @ $0.60 a bid for a total item sale value of $2,940.00 for that 50″ Plasma. ($49.00 / $0.01 x $0.60 = $2,940.00) I doubt they paid retail value for that 50″ Plasma, so the percentage of Markup on the item sold even at $50.00 would be well over 100%.

That’s just the icing on the cake.

Now lets say Joe Blow was banking on getting himself a cheap Plasma and this looked like too sweet a deal to pass up. Joes been bidding since the minute marker and made a grand total of 30 bids (30 bids @ $0.60 = $18.00). Lets be honest, $18.00 isn’t that much money really, but if Joe doesn’t win the bid, he spent $18.00 on absolutely nothing. Compound that by the thousands and you really got a huge rip off scheme going.

And I am hardly finished. What Joe Blow doesn’t realize, along with the hundreds of other participating bidders, is that Swoopo stacked the decks! They’ve got auto-auction bidders who will continually outbid you on every item till the finally tick of the clock.

As I said earlier, who is monitoring these auctions to ensure that this is not happening and how is someone to know they auctions are legit? Who is to say that Swoopo hasn’t set into place an auto-bidding program behind their website for every available auction, or that they aren’t hiring people on the side to bid on the items themselves, and paying them a percentage of the bottom line $$$ markups they are making off of items. Who is tracking the items sold to ensure there are actually items being delivered to “customers” as you might think of them.

I highly doubt there is any monitoring of a site in this nature, and I am willing to bet that there is a indecipherable user agreement the length of a full series of encyclopedias covering Swoopo’s A$$ for the legality of the business they are conducting.

If that penny auction 50″ Plasma went up to $200.00 on the final sale, Swoopo brought in an astronomical $11,940.00 for a set that would have retailed $1000.00 – $2000.00 in stores today.

If Swoopo is engaging in self bidding on auctions, and they do not actually let a real bidder/customer win an auction, that $11,940.00 would be ALL PROFIT, since in fact no item was sold or delivered to a “customer”/bidder. I don’t care how they may be doing it, but I would be very skeptical on the ethics of this business and would lean towards the angle that this may in fact be the very thing they are doing.

Someone ought to have the business investigated for fraud.

Good deal or not for an individual purchase, this is capitalistic mentality at it’s dirtiest.

Hey… SWOOPO… CUT ME IN!!! I’ll bid on your auctions for you all day for a measly 1% of your profits from the auctions I partake in, and laugh my A$$ off all the way to the bank just like you are doing.

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19 Moulay

This is very interesting. I stumbled upon the swoopo site accedentally while looking up a Min HP 2133. A MacBook popped up from swoopo instead. It is selling for less than $50 right now. It caught my eye and I checked a few of the auctions. Just incredible! I was so suspicious that I started looking into the legitimicy of it. I ended up here…
In such a business model, I can set this up and based on the comments of Brian (above), I can enuldge in luring bidders in and would make one bidder win. In fact, bidders do win. However, are those items won the same as those bidders get. I mean, after such an incredible revenue (profit), I could go and buy a brand new item from a retailer and ship it to the bid winner. No problem! The cost is 1 tenth or one hundredth of the earnings.

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20 El Williams

Run! Run away as fast as possible. Swoopo is the worst auction site in the history of the internet. Unless you are the owner of this site, your chances of winning an auction are next to impossible and lucky at best. Stick to Ebay. At least on Ebay when you put forth your best offer and lose, it wasn’t because the computer gave the rest of the world 20 seconds to reconsider their offer. Also, paying to have the computer screw you adds insult to injury! Stick to Ebay. If you lose there, at least you haven’t paid for the lucky winner’s product and the website owner’s profit.

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21 EbaySucks

Yes with ebay you just pay the company and their other company paypal, and all the hidden fee’s and the pennies they scam from paypal on a regular basis, and the extra shipping that the post office now charges since getting in cahoots with ebay, and the extra shipping because ebays shipping calculator supposed to be tied to the USPS always screws up mysteriously. Anyways they are both scams to some extent and in the strict current legal sense “Legit”. Buy and sell on craiglist and help us topple them all!

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22 SWOOPO RIP OFF

RIP OFF DO NOT TRY!!!!!!!!!! RIP OFF!!!!!!!! STAY AWAY!!!!!!!!!!!BELIEVE ME WHEN I SAY TO YOU THAT YOU WILL ONLY LOSE YOUR MONEY!!!!!!!!RIP OFF!!!!!!!

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23 Dean Chaudhry

I fully agree with Brian (July 1st thread). I personally do not know of anyone who has won. There is no real proof of any winnings and yes they do need to be investigated. I’d like to speak personally to a “winner”. If a Plasma went up to $200.00 on the final sale, (which brought in an astronomical $11,940.00) were there absolutely no bidders fighting for it past $200?? I have serious doubts about the companys ethics!

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24 Scott

I bought some bids just a few minutes ago to try this out. I’ll be happy to post here again if/when I’m able to win anything. Naturally there’s strategy to these bids and it’ll take some getting use to. The business model here is genius though and I admire that.

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25 Scott

Ok, here’s my advice on Swoopo after trying it out myself.

It’s a waste of your money.

I bought 40 bids (about $25 bucks worth) and did some research on some items. I realized most, if not all the items that sold for way under price are sold between 11pm PDT and 4am PDT. I added about 5 items to my watchlist that all ended between those times (mostly PS3′s, video games and a cell phone).

I was keeping actively bidding on the first PS3 with about 10 other people. It was up to about $40 or $50 and I had only spent a couple of bids at this point, just watching the flow of the auction, but I was ready to stick it out to the end.

Anyway, the auction would hit near 1 or 2 seconds and you’d see a bunch of bids go in at the last second, this happened to all items on auction so it seemed pretty normal.

At 12 seconds left (during one of the countdowns) the auction just ended and closed. It went from 12 seconds to closed with NO explanation as to why. The person who had recently bid won the PS3 at around $60 or so at this point. I was ready to continue bidding and 12 seconds is a lot of time left on an item.

I have no idea why it went straight from 12 seconds to closed/ended. The deadline for the auction (the absolute end date, which each auction item has) was still 2 days away.

I sent a message to Swoopo support using their own support section/form with the item number and asked why it went from 12 seconds to ended with no explanation. They have yet to respond back to me and it’s been 2 days.

My conclusion, either someone is watching these bids and closing them early for whatever reason or their system is seriously screwed up. In either case, I wasted $25 bucks so you don’t have to.

DO NOT USE SWOOPO.

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26 Dan

Simply put…a scam….call me stupido for getting sucked in. You know what they say…if it sounds too good to be true, then…..

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27 Joanne

Hi There, I have played swoopo and I have won some items. It is not a scam if you play it properly. You have to watch and not bid on everything. You don’t bid until it hits a second on any auction you are trying for. You see people bidding when it’s over a minute even 5 minutes. Those are the people who will lose always. I will sit and watch some things I would want to bid on, and if it looks to busy I will not bid on it. There is thinking involved and not just bidding thinking you will get it. It takes time. I won a couple of weeks ago a imac 27″ apple computer for 39 cents. yes this site makes money hand over fist, but you should only be concerned on what you are bidding on and what you might win by watching it carefully. And even items they could not supply me the item which I received for cheap, they paid me full price for it. So if you think it is a scam, well you have not looked at it carefully. If you jump in with blinders on then expect to be out a lot of money.

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28 Bindia

Joanne, I’d like to ask YOU to bid for me then!

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29 Just got ripped buy SWOOPO

My wife & I checked out the SWOOPO site could see the gambling addictition,we purchased bids was scared but tried it. was only placing bids once in awhile when item come to the end I was last bidder usually this will add seconds to auction,posting pops up auction ended with some one elses name onthe bid not letting me bid again the clock had 2 seconds on it before sale ended I thought this was strange 2 seconds on clock they end the sale so I couldnt when the item,but paid for bidding so I took a ditgtal picture of my computor screen just incase this happen to anyone else .This site should be removed it is not an auction it is a scam you lose your money and the item.

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30 maria garcia

IT IS OBVIOUS TO ME THAT FOLKS WHO RUN AND OWN THIS WEBSITE HAVE IT FIXED SO THAT THEY THEMSELVES WIN THE ITEMS THAT PROBABLY NEVER EVEN EXISTED AS UP FOR BIDDING, THE CLOCK KEEPS INCREASING BY A HUGE TIME SLOT, THE SAME ITEM CAN “SELL” FOR PENNIES AND FOR HUNDREDS OF DOLLARS, IN THE SAME BREATH, THIS IS WORSE THAN THE CALIFORNIA LOTTERY, WHERE THE ODDS OF WINNING ARE NONE. I TRIED IT OUT OF CURIOSITY TO SEE HOW BOLD A THIEVES THESE TYPE OF BUSINESS IS, IT IS EXTREMEY “SHADY”, AND I WILL NOT WASTE ANOTHER BUCK….I AM STICKING WITH EBAY.

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31 Shmeckell

I wouldn’t trust them. It would be way too easy for them or an employee to be the person you are bidding against. In fact, the way their system functions, I find it hard to believe that this is not the case, at least until they recoup their money for the item. When an item first comes out no one would bet on it first because there is a 100% chance you just kissed your bid away; so you need to ask yourself who makes all the early bids? I would say they either have the dumbest members on the internet or it is a scam.

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32 Brian

Hey guys. It’s me again. Just checking in to the responses from when I posted back in July.

Seems a general consensus holds true. What I find pretty poignant though is the post by Joanne where she claims to have won a 27″ Imac! LOL!

Sure thing Joanne. What’s your full name? Joanne Swoo Po? Seriously, next time you think about coming to a site to post about your own scam-auction-project as though it is legit, you might not want to claim winning the very item that is advertised on the article page of the review that you are commenting on.

Coincidence that Swoopo is advertising a 27″ Imac on this site in the review above and that Joanne won that very item??? I think not.

Really though Joanne Swoo Po… you got a masterfully ingenious business model. I applaud you for your capitalistic ability to prey upon the stupid.

However, when it comes to disguising yourself as a Winning Bidder within the readers comments that are bashing your auction techniques, you come off as a complete moron.

My 2-Cents (Not to be invested in your site…)

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33 Francis

This site is so retarded, I just wasted $24 the cheapest package. I feel like these people that I’m bidding against doesn’t have any common sense and aren’t real. They would spend more bids and invest more than the retail price of the item. Ive seen a person who wasted $1500 worth of bids to win a $700 product? Also, this site offer so much bid vouchers, it’s almost impossible to compete with them. The Bid Butler is one of the worst feature for this website. I once placed 15 (all my bids) on Bid Butler and it disappeared in one second. There’s no point of bidding against someone who has 300-750 bids that they won from the voucher package when you only have 40 bids. I always see the same winners all the time, they just have LOTS of bids. They use those bids to WIN even more bids (bid vouchers) and just keep spamming bids on the good items.

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34 John

I agree the site is not legit. If you keep bidding on an item someone is always bidding against you. Once you stop there is a winner. Check out the auctions with no bidders it ends real early. Thats because only their employees were bidding. Once a customer starts to bid the auction goes really high.

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35 Ed

anyone ever think that they’d use BOTS to do bidding, win the item, send it to themselves, send the money back to themselves? is there any kind of transparency for this business model? no one in their right mind would spend MORE money on bids than the actual item+closing cost. i think swoopo and bigdeal are both scams.

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36 Bill

Here is why you should not waste your time:
You have no chance of winning since The Bid Butler beats you every time. Not only that there is no way you can out match the bots that are bidding in each auction. From what I have experienced and studied, I have seen the same bidders over and over countless times exceeding the actual value of the item. I believe these bidders work for swoopo to raise the bids so they make you spend more money. An example would be last week while bidding on an apple Ipad, I was bidding against a guy who would bid almost every other bid. By counting all his bids to try to wait and knock him out of the picture, he continues to bid beyond the $829 price, who does that? 1576 bids were made just by one buyer. If you calculate that its .60 per bid so (1580*.60=$945.6) in addition you still have to pay for the auction if you win. Try counting out how many bids a person makes to clarify if you think this is legit or a scam. Also write down all the top crazy bidders that you will constantly see. If you’re going to waste your time and money on this I suggest that you stick with the concept of “Go big or Go home”. You will have to compete with bots and bidders based on who has more bids. Don’t waste your time if you’re going to be bullied out. If you decide to give it a try then my suggestion on strategy is waiting and watching the bidder’s actions. The “Bully” usually will make sure he owns the timer. An example would be the counter clock will never go below 3-5 seconds with him bidding. As he Bully’s people, just wait till he slows down because he is trying to discourage you from continuing on. Eventually he gives the timer up to another “Bot or Bully”. There are two things the Bully is hoping for, 1: is the lag in the system which is why he wants to dominate the clock and 2: he is hoping that people will expect someone else to watch the clock and bid. If everyone’s waiting on someone, then he wins. Glad to give feedback to people who want and need to know what’s going on. Watch how the system works before you play.
Good Luck and I QUIT!!
P: S If you purchase the “Special bid pack M+$50 resturant.com” Make sure they actual send it to you, since I never received mine.

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37 jim m

First things first. If you bid on Swoopo, and if you win, the product, exactly as described does get delivered within a maximum of 14 days. I have been successful in 13 auctions and without fail the product is exactly what you thought you were getting.

That made me a real fan, strictly as a form of entertainment. Seems too good to be true, right? Recently I began to see a large number of auctions go way above what one would expect to see. Strictly by accident I decided to look at their European and Korean websites to see if I saw the same type of behavior. Well, the actions of the bidders were exactly the same…. because they were the same bidders, including me. What was not the same were the products being bid upon in each country.

Certainly you can see the need for some product substitution across borders because a particular brand or model is not distributed in that country, or because of electrical requirements, etc., but what you probably cannot see the need for is a situation that sets groups of bidders from different countries bidding against each other for different products.

For example, you may have decided that instead of going out and buying a new GPS unit for your car or for camping you are going to give Swoopo a try. The bidding is spirited and you have little success after spending your allotted limit. Imagine your chagrin if you had gone to the Korean website and saw that a number of Asian consumers were bidding against you….for a digital camera. You would never bid on a camera, you have two already. The Asians would never bid on a GPS unit, they already have one.

What has happened is Swoopo created an artificial environment pitting strangers against each other, all of them chasing something different, with appeal to their particular region, but in the same bucket without telling anyone. I have numerous examples, but will stop with that one. You can check for yourself easily enough.

Long winded and rambling, it is just that I was really a fan. Won sometimes, lost sometimes, but always thought I knew what I was up against. Turns out I was wrong.

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38 Gerald

Try to register a username on Swoopo that contains any uppercase characters and your registered username will be all lowercase characters. Be suspicious of bidders who have usernames containing uppercase characters because they did not go through the normal registration process. Try it yourself, your username will be all lowercase. Be suspicious.

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39 Nadu

I have a friend who tried a Penny Auction like Swoopo who won an IPad just the other day. It cost him $60. It may have been beginners luck, but since he got it in the mail…I’m willing to have a go at it.

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