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Auction site Swoopo a scam or a bargain? Posted on Wednesday, May 13 2009
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Is Auction site Swoopo a scam or a bargain?

I've been noticing ads on Gmail advertising gaming consoles that sold for extremely low prices at swoopo.com . Conceptually the site is a very smart money maker which will probably be only gaining more popularity, or notoriety in the future. I wasted 30 bids and won nothing and decided to analyze the system to see if a profit could really be made.

My Incentive

I was hoping to win a Nintendo DSi for my little cousin in Mexico. She wanted a DS for christmas last year but her parents are poor.

10 ways Swoopo's System is Different than Ebay's

  1. Bids cost 75 cents each
  2. Swoopo controls supply and demand (ads)
  3. Product price increases 15 cents per bid / 1 cent in penny auction
  4. Products start at $0
  5. Placing a bid at the last second resets the timer 10 to 20 seconds
  6. 'Bid Butlers' can be used to automatically place bids within certain price ranges.
  7. Bid butlers not allowed in nail biter auctions
  8. If another bid butler matches your bid butler's price range all bids are automatically placed and auction time is extended significantly (usually) as all those bids add 10 - 20 seconds each.
  9. beginner auctions allow you to compete with only people who haven't won an auction
  10. Swoopo has to earn just 16.7% of the retail price to earn a profit.

Verdict: Swoopo is not a Scam and Definitely not a Bargain

Swoopo already makes too much money using gambling psychology and marketing. It doesn't need to do anything illegal to add icing on the cake, its profits are already enormous. While it can be profitable to setup bots that illegally bid up the price until a target is met, as this swoopo clone owner did, swoopo can do this legally by google ad bombardment of certain products and keeping the supply of products low. I did an analysis of a few hundred usernames on the site and found a regularity in the distribution and structure when compared to other sites, though by user id you can see there's an insane amount of users, over 2.2 million though most must be inactive. Swoopo has a limit to the auctions you can win and I couldn't find any accounts that exceeded it or won suspiciously too often. There's no real way to know for sure if they have any shady methods, but in my opinion they're already making too much money to risk anything stupid that might arouse suspicion and lead to a PR disaster.

Logical Pitfalls

There's several ways you can fail at swoopo. Understanding these 5 points should increase your chances and make your expectations more reasonable.

Pitfall #1: Gambling psychology

Swoopo is just a modern, more aggressive implementation of the dollar auction which is designed to make logical people waste an irrational amount of money. Most auctions have a big red 'last 10 to 20 seconds' countdown flashing hundreds of time before the auction ends. Most of the time on items that are worth something: many people lose, 1 person wins, swoopo disproportionately wins. Like gambling, people are much more likely to remember how many times they almost won or won rather than all the times they lost, getting hopes they'll learn to play the system or if they did something just a little bit differently it will lead to success. If a person has submitted a majority of their bids, and they only joined the site to buy a particular item, it may seem logical to continue bidding more than the item is worth just to try and avoid having to buy more bids or risk a clean start with few bids on another auction. It's easy to not think clearly when you constantly have a resetting big red flashing 10 second count down. Pull away from the page when you need to think about something and don't act until you're completely sure. Calculate the cost to risk analysis and be aware of how many people are bidding. Lurk if you're a new user.

Pitfall #2: Sold for Only $x! I should have bid

Many higher price items sell for low in the case of a single bid butler. Single bidders get scared away when their bids are instantly beaten over and over again with a depressing amount of bids being thrown after repeated countdowns. Just because it sold for a low price doesn't mean you would have won at that price. Many of the people that setup bid butlers are just hardcore ebayers that resell the item. $10 - $15 resell profit will suffice at minimum and at that rate they can afford have hundreds of bids on some of the upper priced items. Other people don't want to use bid butlers while one is already active because it can eat several dollars instantaneously depleting your bids and increasing the auction time to unreasonable levels to where more single bidders can track it and join at a later time. To kill a bid butler you hurt yourself and let the single bidders gain an advantage. Be the first one to throw one out on an auction set to end near 3 in the morning and you might just be lucky.

Pitfall #3: Cheapest bid package + bid smart

Be ready to waste a shit-ton of bids and money if you want to even try to be successful on swoopo. Swoopo is basically a rich man's game rather than a poor man's opportunity. The company name speaks for itself, "Entertainment Shopping" not "Bargain Penny Bids". Though there's a few lucky people, wasting $20 - $100 on bids and not winning anything should be taken lightly, because that will be the case for a majority of new users. If that's not something you can do then probably swoopo isn't for you. Bidding at the last second multiple times tends not to help. In fact, sometimes the server lags out and you'll get an auction ended even if you bid a couple of seconds before the end. Sometimes the timer displayed on the browser isn't perfectly in sync with the actual ajax time, also the latency of how long their packets take to reach you can severely hurt your timing and ultimately expectations. If your plan is to bid at the last second, the only bids you might be getting in will be losing ones if the server is slow and or the latency is bad. It takes about 300 milliseconds to get data back after a request. If the server is slow then maybe 500 milliseconds - 1 second. Compound that if your connection is slow or you're far from their server. The average human reaction time is about 200 milliseconds. You can try to time your click exactly but that's not quite how it works. When your competing with other people instantly beating their bid is more depressing than letting them 'almost win' (last sec bid). People with limited means trying to get a one time bargain on something in particular will be disappointed. Ebayers and craiglist resellers that play the system and will be satisfied even with minimal returns are the type that will ultimately gain the advantage and profit the most. The terms and conditions make it clear no resellers are allowed, but why else would many of the winners keep buying the same console systems over and over.

Pitfall #4: Cheap Beginner Auctions

Beginner auctions often have junk with swoopo's listed price being around $20. Those items tend to sell for $5 on amazon or walmart, which is the price swoopo will charge just for shipping. Even when higher priced items like a wii or xbox 360 become beginner auctions, there's so many people that haven't won anything that it usually matches the prices of the regular aucctions.

Pitfall #5: Bidding for bids / product competition

Swoopo limits supply of items and keeps the quantity of users super high through constant adwords bombardment, more often of consoles, cameras and apple products. For that reason you're more likely to win a $1200 refrigerator cheaper than a $170 nintendo DSi. There's a lot more people searching online to order a console than to get a massive fridge by mail. Many users probably join for the single interest in a particular item. One item all bidders have a demand for is more bids leading to some of the most retarded wastes of money you won't see anywhere else (goldmine's for swoopo). Here's the worst: 300 Bids sold for $77.45 penny auction. When it's a penny auction just take out the decimal in the price and that's how many times people voted. That's right, 7745 bids on an auction selling 300 bids earning swoopo $5808.75. With the winner, if I can even call him that, spending $635.45 on what would cost him $225 normally. User Firmenboss was even more retarded when he spent 1019 bids on an auction selling 300 bids, and additionally had to pay $33.71. A serious WTF goes out to you, Firmenboss. An average of 1739 bids total are used in auctions selling 300 bids, 271 bids for auction selling 50 bids and 47 bids for auctions selling 20 bids.

Promotions

Google for swoopo promotions / swoopo promotion codes / swoopo coupon codes before you sign up. They sometimes have promotions like money back on first purchase or free bids. Also after you waste your first bids they offer a countdown saying you'll get 15% more bids if you buy within the countdown. If you're looking to stay keep that in mind.

Statistics

This information represent my findings after tracking many auctions. Out of pure laziness, I won't disclose how many I tracked, how I tracked them or guarantee any accuracy. Those who know me or my work should rely on that confidence when evaluating this data. I do not have access to their database or insider information and I didn't do anything illegal, so this information is not comprehensive at all. Take these findings with a grain of salt. At any point you see the word 'average', take in mind the distribution is fairly scattered and the standard deviation in price and bids is quite high so its value isn't so useful.

Generalities From Research

  1. Bid Butlers win about 56% of the time. Since many auctions are nail biter auctions the bid butler success rate is probably higher.
  2. The average price an auction ends at is $38
  3. Including bids the winner pays an average of $106
  4. The average amount swoopo earns per auction is $627, not deducting the price of the item. This is a bit unfair but suggested retail price is not reliable in assessing their actual costs.
  5. 98 is the average number of bids the auction winner puts in where end price > $100
  6. Nailbiter auctions tend to sell for more.
  7. The people that have won many auctions tend to use bid butlers most often

Biggest Auction Losers / Biggest Swoopo Wins

You probably have seen the ads: "The Hammer Fell At $x on x product! Don't Miss The Next Auction!" Yeah well sometimes the hammer is a bastard. To be fair a lot of items really are sold very cheap, but for the sake of entertainment here are the ones that netted swoopo the most money and netted the biggest fails for the concept of group psychology. Note that the "Total" represents the cost of all auction bids + the final price the winner paid. The suggested retail item price is not subtracted.

#ProductTotal
1HP TouchSmart IQ816 All-in-One Desktop PC$44802
2Apple iMac MB419LL/A 24-Inch Desktop$31666.92
3Apple MacBook Pro MB470LL/A$29544.24
4Sony Vaio VGN-FW170J/H 16.4 Core 2 Duo Notebook$26277.76
5HP Pavilion HDX18-1020US 18.4 Laptop (Vista)$26185.04
6Sony Vaio VGN-FW170J/H 16.4 Core 2 Duo Notebook$25493.44
7Samsung LN46A650 46 LCD TV$24180.92
8Samsung HL72A650 72-Inch 1080p Slim DLP HDTV$23414.84
9Apple MacBook Pro MB470LL/A$23358.6
10Nikon D90 12.3 MP DSLR Camera with 18-105mm Kit$21780.08
11ATV 200cc XLarge Sport$20640.84
12Apple Macbook Air 1.6GHz Core 2 Duo Notebook$19906.68
13HP Pavilion HDX18-1180US 18.4-Inch Laptop$19333.64
14Acer AS8730-6918 18.4-Inch Laptop$18858.64
15Sony Bravia Z-Series KDL-46Z4100/S 46 LCD HDTV$18703.6
16Philips 42PFL7403D/27 42 1080p 120Hz LCD HDTV$18674.72
17Samsung HL61A750 61 1080p LED Powered DLP HDTV$18618.48
18Samsung LN40A750 40 LCD TV$18364.64
19Samsung LN40A650 40-Inch 1080p 120Hz LCD HDTV$18363.12
20Sony VAIO VGN-AW120J/H Laptop$17986.16

No Resellers Allowed?

Not really, just ask Kiku1980 who has won 16 Nintendo Wii's, obviously for his 8 kids and extended families. Here's what he paid for each with links to the auctions: $153.3, $213.75, $241.5, $214.65, $132.6, $178.65, $497.85, $467.55, $149.7, $362.25, $130.2, $40.65, $451.2, $218.7, $176.7, $191.4. A Spanish Blogger even complained about losing to him multiple times.

It may be in the terms of service, but that doesn't mean it can really be checked easily and enforced and they're definitely not banning the people winning the same item over and over again. Why would they want to? They buy a shit ton of bids.

Hsvtigger seems to have the same obsession: $113.1, $164.7, $148.2, $186.45, $66.75, $33.3, $186.6, $234.9, $17.1, $106.65, $110.25, $173.4, $52.05, $66

And again Truebix: $186.6, $149.1, $388.95, $148.65, $128.7, $160.2, $266.85, $168.9, $106.65, $114.75, $137.85, $129.9
, $220.05, $75

Cleveryly at least box a dsi and an xbox too: $167.25, $133.65, $74.25, $118.95, $7.2, $139.35, $184.65, $51.6, $118.5, $138.9, $135.6

Ayazyavuz is same as above except he bought a ps3 instead of an xbox too: $66.15, $185.25, $181.5, $157.8, $318.9, $103.05, $122.85, $119.25, $351.45, $107.25

Zorro2612: $83.85, $656.1, $141.3, $72.45, $630, $558, $278.25, $342.15, $159.15, $120,

1pleitegeier: $45.45, $33.3, $176.55, $111.75, $176.1, $263.85, $237.45, $331.8, $43.8, $126.45,

Kennysdead6: $92.1, $363.6, $173.25, $481.5, $20.85, $76.2, $146.7, $75.9, $169.8,

Toertchen: $132.3, $191.4, $152.7, $228.3, $358.05, $365.1, $231.75, $201.45, $205.2,

Reddevil42: $147.9, $160.5, $340.05, $92.1, $202.5, $103.05, $160.35, $306.9, $127.8,

Alexander17: $222.9, $373.95, $143.4, $156.9, $45.9, $279.9, $249, $124.35, $416.7,

Dartfan180: $292.5, $103.95, $17.25, $226.2, $192.6, $18.45, $31.2, $160.5, $126.45,

Rutti: $53.1, $396.6, $48.75, $32.25, $198, $140.25, $340.8, $43.2, $290.85,

Kavvamartin: $15.78, $75.75, $461.4, $148.95, $32.4, $138, $22.65, $162.15, $269.4,

Kleinratte: $278.25, $556.65, $212.4, $258.9, $208.5, $66.15, $185.25, $313.2,

Einueber: $292.05, $197.7, $118.8, $301.05, $103.2, $150.9, $323.55, $194.25,

KingNothing: $74.7, $90.9, $102.6, $225.9, $88.8, $37.35, $66.15, $81.6,

Beitschi123: $85.5, $122.7, $82.5, $213.9, $147.15, $195.6, $94.35, $245.55,

Corsanico: $100.8, $201, $421.95, $146.1, $225.3, $234.75, $196.95, $212.25,

Bigmamaxxl: $209.4, $62.25, $57.6, $248.85, $323.55, $290.85, $94.95, $308.25,

2l8m1: $96.6, $81.6, $90, $268.2, $24.15, $43.05, $74.55, $52.5,

Dadaroro: $146.55, $264.3, $273.3, $12.03, $320.7, $12, $200.7, $100.35,

Mudviking: $117, $183.6, $307.35, $45.45, $574.2, $103.8, $723.3, $175.35,

123sammy: $149.7, $173.7, $104.25, $191.1, $40.5, $100.65, $36.75, $229.8,

Caruso222: $215.4, $4.35, $33.75, $5.4, $181.2, $10.35, $266.55, $183.75,

There's many more...

Products Swoopo Has Sold Most Often (In Order)

  1. Wii | Nintendo Console + Wii Sports
  2. 50 Bids Voucher
  3. 300 Bids Voucher
  4. Wii Fit | Nintendo WiiFit + Balance Board
  5. Kingston DataTraveler 32 GB USB 2.0 Flash Drive
  6. Kingston Micro SD Reader & 2GB SD Card
  7. Panasonic KX-TG9332T Cordless Phone System
  8. Nikon D90 12.3 MP DSLR Camera with 18-105mm Kit
  9. Transcend TS8GJFV10 USB 2.0 8GB Flash Drive
  10. Corsair Voyager Mini 4 GB USB Flash

Analysis of Nintendo Wii

Since it's the most common thing sold based on my info here's some statistics on it. Price refers to the displayed price at the end of auction. Winner price adds the bid cost to the price.

Total Tracked: 1254
Bid Butler Wins: 1041 (83%)!
AVG of price: $101.21667464115
AVG of winner price(+bids): $179.37157895
AVG of winner bids used: $104.2065
AVG Swoopo Earnings: $613
Standard deviation of price: $64.37504105530
Stdev of winner price: $128.51668267
Stdev of winner bids: 110.8653
Median price: $92.1

Distribution of wins by price range

From $0 - $10: 49
From $10 - $20: 54
From $20 - $30: 72
From $30 - $40: 62
From $40 - $50: 65
From $50 - $60: 60
From $60 - $70: 85
From $70 - $80: 83
From $80 - $90: 76
From $90 - $100: 69
From $100 - $110: 74
From $110 - $120: 61
From $120 - $130: 66
From $130 - $140: 52
From $140 - $150: 52
From $150 - $160: 43
From $160 - $170: 32
From $170 - $180: 45
From $180 - $190: 27
From $190 - $200: 30
From $200 - $210: 24
From $210 - $220: 12
From $220 - $230: 9
From $230 - $240: 16
From $240 - $250: 10
From $250 - $260: 8
From $260 - $270: 4
From $270 - $280: 3
From $280 - $290: 1


Distribution by winner price

From $0 - $10: 49 wins
From $10 - $20: 54 wins
From $20 - $30: 72 wins
From $30 - $40: 62 wins
From $40 - $50: 65 wins
From $50 - $60: 60 wins
From $60 - $70: 85 wins
From $70 - $80: 83 wins
From $80 - $90: 76 wins
From $90 - $100: 69 wins
From $100 - $110: 74 wins
From $110 - $120: 61 wins
From $120 - $130: 66 wins
From $130 - $140: 52 wins
From $140 - $150: 52 wins
From $150 - $160: 43 wins
From $160 - $170: 32 wins
From $170 - $180: 45 wins
From $180 - $190: 27 wins
From $190 - $200: 30 wins
From $200 - $210: 24 wins
From $210 - $220: 12 wins
From $220 - $230: 9 wins
From $230 - $240: 16 wins
From $240 - $250: 10 wins
From $250 - $260: 8 wins
From $260 - $270: 4 wins
From $270 - $280: 3 wins

Time based stats

Time based statistics converted to central time for my convenience =P.

Wins Based on Hour of Day 0 - 23

Hour - Winner Price - Average Price

0 - $174.7 - $88.35
1 - $162.62 - $83.48
2 - $172.6 - $89.4
3 - $159.32 - $97.76
4 - $189.89 - $101.98
5 - $189.8 - $100.46
6 - $185.56 - $101.59
7 - $194.74 - $106.27
8 - $198.19 - $109.92
9 - $189.35 - $110.84
10 - $198.46 - $121.77
11 - $165.2 - $96.93
12 - $172.44 - $111.37
13 - $179.35 - $113.66
14 - $179.05 - $101.84
15 - $179.85 - $114.54
16 - $209.27 - $130.34
17 - $207.58 - $110.9
18 - $177.74 - $101.4
19 - $152.17 - $90.52
20 - $167.18 - $102.17
21 - $192.68 - $92.5
22 - $179.42 - $87.59
23 - $122.71 - $63.19

By day of week

Day - Average Winner Price - Average Price

Mon - $192.22 - $106.33
Tue - $170.64 - $100.74
Wed - $184.91 - $104.12
Thu - $175.49 - $100.57
Fri - $187.64 - $102.71
Sat - $165.47 - $97.4
Sun - $180.51 - $96.62

Analysis Conclusion

Bid butlers definitely have a huge success rate for the Wii, but it's not for the faint of heart because you have to invest uncomfortable amounts just in bids. Day of the week and hour of the day do not make a statistically significant difference. In general the earlier you get in the game the less chance you have of winning, unless you're the lone bid butler on a fairly unpopulated auction. Get in late and you pay more but waste less in bids and have a better chance of winning. Your win is many people's loss.

Article Conclusion

While I wouldn't personally risk more money with swoopo the whole system is amusing. I'm more interested with the mechanics of the site and mathematically studying bidder habbits. I'd rather view it from a programmers prospective than a consumers perspective because it's just plain lulzy sometimes. Swoopo is a system that can advert lines too good to be true legally, and can sell a regular computer for 45K just by adding a few retarded bells and whistles to induce gambling style tendencies from otherwise logical people. The system is just a money machine.




Tags: swoopo scam, is swoopo a scam, penny bid auction site fraud, swoopo bid bot, swoopo bid script, automated bid script, how to win swoopo, sham, better business beauro, consumer reports, testimonials, legitimate, ebay, swoopo clone, swoopo auction scam, swoopo coupon code promotion



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