The Crack Cocaine of Auctions Sites

[jeffrey]

Imagine for a second that you set out to come up with an online shopping site that would take advantage of everything we've come to know about consumer behavior to separate people from their money in as efficient a way as possible. What would you do? Well, you'd probably try to draw buyers in with bargain prices. You'd pit them against one another in an auction. You'd ask them to make snap decisions without taking much time to figure out just how much money they're spending. On top of that, you'd ask them for only very small amounts of money at any one time, letting payments of a few cents build up to hundreds of dollars...

The Crack Cocaine of Auction Sites: Swoopo.com is the most efficient, addictive way to separate people from their money. | The Big Money

[Broken Arrow]

OOOH OOOH Oh my goodness, a 42" LCD TV, and the bid is only $142 with 15 seconds left!

um....

[Joan.of.the.Arch]

Ho-hum, they'll have to work a little harder to entice someone like me.

[disneysteve]

Very interesting concept. They can make a big profit on the fees and the winner can still get a really good deal. The problem is the hundreds or thousands for losing bids cost people money and they got nothing for it. I think that would get old real quick for folks who don't win an auction. Kind of like going to the casino. It is fun for a while but if you never win, you lose the interest in continuing to play.

[Joan.of.the.Arch]

Actually we have used similar method to auction items for charity among smallish groups of people. We take bids on an item, say an elaborate handmade nylon kite, starting at $0.25. If you bid $0.25, you have to put a quarter in the donation bucket. If the next person bids $0.30, they must put $0.30 in the bucket. The bids rise slowly, the donations rise slowly, but most everyone can bid and be happy to donate something. People might bid multiple times and so put something in the donation bucket multiple times. When done in person, it is often very funny. Sometimes two people might put together their pittance, one giving $2.37, the other giving $1.78 for a total single bid of $4.15. They may well know they will be outbid, but they do it anyway in order to empty their pockets into the bucket. By the time it is over a colorful, unique kite might sell for $75, but much more has been collected for charity, everyone had fun, and everyone was able to donate.