Gadgetell interview: Swoopo speaks
In case you missed it, my post on Swoopo.com has generated a lot of interest and comments. One of the comment leavers was Swoopo.com’s Senior Manager of Business Development, Chris Bauman.
Swoopo.com is an auction site unlike the traditional auctions you know and has taken a few lumps from readers of Gadgetell. Chris works for the US arm of Swoopo.com (formerly Telebid.com) and has taken the time to answer my questions and fill us in on what the company is thinking.
The idea behind Swoopo.com is somewhat simple: users buy bids (they cost $1 each) then use those bids in an auction. Swoopo’s hope is that enough bids are used to cover the cost of the product (usually high end electronics, DVDs, watches and in some auctions: cash). Sounds simple right?
Maybe too simple, as many folks finding the site via some apparently effective Gmail advertising were quickly scared off. Here are just some of the comments they left on our site:
We at Gadgetell believe we are most effective when we can give both the readers and the companies a place to resolve issues and get all the facts on the table. Chris, to his and Swoopo’s credit, has been actively answering comments here and other places on the web. He was happy to discuss the issues I brought up. Let’s get right to it, shall we?
- Luckily I never trusted it
- It should be (and will be) shut down by regulatory authorities
- If it looks too good to be true, it probably is
- look(s) like a scam
- slimy bastards, but brilliant nonetheless
- STAY FAR AWAY!!
Surely, all can’t be mad at Swoopo?
JG: Why are some people are getting really pissed off at Swoopo? Chris Bauman: It is unfortunate that an auction has just one winner. It is the nature of the beast. People that don’t win are going to be mad, even regretful sometimes, but those very same feelings happen on other auctions like eBay too. JG: Can you give us some perspective on Swoopo? Chris Bauman: Sure, back in 2005 telebid.de a German site started and quickly became popular. The site morphed little by little. In early ‘07, they opened London co.uk; earlier this year Spain .es, live in USA .com just a couple of weeks ago and now we are going live in Austria. JG: I have not found Europeans getting as upset over the site as they have for the US version. Are we Americans just more likely to speak up or is there a culture difference that is manifesting in the feelings we seem to have about Swoopo? Chris Bauman: It may be a different mentality in Europe vs. US users. Back when Telebid started, blogging, comments and the internet wasn’t as big as it was today. We’ve got a lot more access (and willingness) to express our feelings today than we did even three years ago. The fact is people don’t like to be losers. Our CEO, Gunnar, was surprised on how many mixed reviews we’ve gotten. JG: How are you trying to educate users on the differences in your model vs. a traditional auction? Chris Bauman: Our about page is very simple explanation about how it works and has sufficed, but can be clearer. We are looking to expand it. We are also looking to do videos as well. The thing that really sets us apart is allowing users to purchase bids and then bid with those. It is definitely not a try before you buy.Battling globally vs locally
JG: One comment on our site was about a laptop. This laptop was offered for bidding in various countries and you’d deliver a similar version wherever the winner was. Are the bidders battling just those in their country or all the Swoopo sites globally? Chris Bauman: The auctions can be set up to be just within countries or global. There are some products we can only sell in certain countries so those are limited, as much as we can anyway. I mean, anyone can log onto any of our localized sites from a different country. For example: we have watches that we can sell in the US only. Germany auctioned off a Fiat 500 car in Germany only. JG: How are bidders made aware of who they are bidding against? Chris Bauman: We do not make them aware. We don’t say which bidders you are bidding against simply because we are not assured of the outcome. Our business model says the more bidders we can open an auction to, the more likely we’ll cover costs, which doesn’t happen 70% of the time.Money for nothing? Chicks for free?
JG: Ok, Chris, for me a big red flag are your auctions for $1,000 in cash. You call it a 100% off auction where you bid, but don’t have to pay the final bid price (Swoopo hopes to have more than 1,000 people bid and thus, cover their costs). To me. it just feels icky. . Feels gimmicky. Chris Bauman: We see this like a promotion. The same principles apply and we have a cost just like say an auction for an iPod. Only we wire transfer the money instead of ship it. We hadn’t got this kind of comment before. Would it make a difference if it were a $1000 gift card to say, Best Buy? JG: Yes, it would, but I can’t explain why. Giving away cash just seems snarky. Chris Bauman: That might be something we change. We don’t want to give the perception of our site is up to no good. We want people to win and I want to help people win as much as I can. JG: Are you concerned about being viewed as gambling? Chris Bauman: Gunnar, our CEO has been keeping an eye on the auctions for years and has not seen people bid outrageous and not won. Typically been when you come to the site, you came there for a product. We’ve not seen a lot of people go nuts. We try to encourage safe bidding in newsletters, and realize we are introducing a new auction style. There is a skill to Swoopo.How to win
JG: What does it take to win on Swoopo? Chris Bauman: Winning takes two things: money and patience. Every person has a strategy. I interviewed three new winners in US, all three said, “be patient.“ My advice would be start small. Go to the site and start with a DVD. People will learn a skill and bid accordingly. JG: Any last thoughts? Chris Bauman: We are legit, we want people to win and they want to help them. We want to be as transparent as possible. JG: Thanks for your time and efforts responding to our readers. Chris Bauman: No problem.Final thoughts
Chris was very open on the phone and seemed genuine in his desire to help users. Some issues about global bidding seem a bit odd and giving away cash just seems, well, odd. Maybe that is just me. In all, I detected no “snake oil salesmanship” and enjoyed speaking with Chris. Swoopo definitely isn’t something I’d go into blindfolded, but, in hoping to catch one of those items on the cheap, it seems reasonable one could do so. At the end of the day, will I be bidding on Swoopo? No. I don’t believe I am lucky or bright enough to stay ahead of the curve and not get taken in by the heat of the moment. How about you?Keep up with the latest gadget goodness! - 
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Look this swoopo look like not the best site to give you the best price for your money.
Go and check kcbidz.com and there you really get the best for your dollar!
on October 3, 2008 at 11:20 AM - LINKNice tool for Swoopo.
on October 3, 2008 at 05:04 PM - LINKhttp://www.wikiwif.de/bidwatcher.com
“People that don’t win are going to be mad, even regretful sometimes, but those very same feelings happen on other auctions like eBay too. “
Except on ebay you don’t loose all your money, when you don’t win the auction you were bidding on
“I have not found Europeans getting as upset over the site as they have for the US version.“
Guess you have not found out about that since Sofina filed a lawsuit against just about everybody who was expressing a critical opinion…
“Our CEO, Gunnar, was surprised on how many mixed reviews we’ve gotten. “
Probably more surprised that in the U.S. he cannot censor as rigourously
“We do not make them aware.“
...because if they were aware, they would refrain from participating
“Gunnar, our CEO has been keeping an eye on the auctions for years and has not seen people bid outrageous and not won. “
For years? That’s funny, he’s only been CEO for maybe a year
“There is a skill to Swoopo. “
You bet, just as much as there’s skill in playing the lottery
“Winning takes two things: money and patience. “
on October 4, 2008 at 12:01 PM - LINKTrue, except spending money patiently won’t make the deal a bargain anymore
This auction site is a piece of ####. I never won and never will. Crab…... don’t use it.
on October 21, 2008 at 03:51 PM - LINKThis is bullcrap. How would anyone know if Swoopo is manipulating the auctions. Since they have have all the chips, they can hire people 7 dollars an hour just to drive up the auction price, when the auction has reached profit making mark, then they drop out. Or better yet, using programs to do that automatically. The house will always win and worst is no one even know that they giving away money to these aholes. How can anyone tell that those ppl who won a 40” hdtv for $255 is not one of the Swoopo bidders using bidbutlers with infinite bids. This is Bogus, I can’t even begin to imagine. Looking at the site has my my boiling.
on October 22, 2008 at 01:56 PM - LINKSwoopo is a defenite scam. Check out this 300 bid card that I watched goto $576.75. I watched bidding continually go higher and higher for 45 minutes. Why would anyone pay $576.75 for a $300.00 bid card they can purchase anytime from swoopo for $300.00.
http://www.swoopo.com/auction/300-freebids-voucher/112354.html
If people still think it is for real after seeing this then they need to stay on swoopo and give them all their money cause their too stupid to even possess money. By the way there was a TOM TOM 930 GPS that went for $23 and a Sony Playstation 3 for $83 at the same time people were fighting for this 300 bid card.
on October 31, 2008 at 04:11 PM - LINKI found out about Swoopo this evening and have been discussing it with a friend. I don’t at all think it is a scam, but it is tapping into that “gambling urge” people have and anyone who has problems with that should definitely steer clear.
Just to respond to jerry summers’s comment, the winner of that bid card didn’t have to pay $300 for it—as it is very clearly stated on the page you linked, it was “free”; the winner only paid for their bids (in this case $32 for 32 bids) while Swoopo made $3845 from it.
on November 1, 2008 at 02:01 AM - LINKIn response to Jerry Summers:
Jerry… I’m not a member of the site and I just saw the site today and I know more than you. The 300 bid card did not go for $576…. it went for $32. If you look around and understood the different meanings of some of the things on the pictures such as 100% free, then you would understand that the person doesn’t pay the winning price… instead they pay the amount of bids they did. This means while although the price got up to $576, the person who won had to spend a minimal $32. This makes it an extremely good deal as normally it would cost $300.
Also, loosing is apart of every game, every auction, every raffle, etc. If you can’t stand the loosing then why participate in it? This brings me to the next point. Those of you who say “ultimately the ‘house’ brings in the most money” its true! But in what situation is this not true??? Think about it, a business has to make money. No matter what the business, they always charge more than what the product is worth or they have to make money someway. In this case, swoopo, has over 380 auctions running simultaneously. Some last days, some last weeks, but either way it is important to know that they need to generate enough income to make up for all the products they distribute, all the costs of a business, employees, etc. and so the obviously need a way to make money. So what I’m trying to say is, while you don’t have to like their practices (even i don’t like the system), you have to understand the basic principles of a business which is to make money, and in the case of swoopo they do make a good amount of money, but they also offer their users great deals.
on November 1, 2008 at 10:07 PM - LINKI think most people critical of the general Swoopo philosophy have not bothered to really understand HOW to use the site. Ultimately, there is strategy. It is a bit like gambling, just as it was quoted above “...it takes time and money.“ In other words, if you buy 20 bids thinking you’ll win an auction for something worth $1200, you’re going to lose your money. The part he left out is LUCK.
The comment I have trouble believing is that Swoopo doesn’t cover cost 70% of the time. If you look through the completed auctions and add up the number of bids vs. the cost of product, I don’t see how this is possible - unless there is some MAJOR overhead (Gunnar’s salary, maybe?). Just look at the Nintendo DS’s or Wii’s. These regularly go for near the retail price of the unit. Any product that is gets enough bids to equal it’s retail price means that Swoopo earned 6.66 times the cost of the unit in bids, plus the winner usually still pays the final price of the auction. So, if they sell one Wii for $250 they’ve earned $1666 in bids, plus the $250 for the final price. This same concept is also true in the other auction types. I’ve seen very few cases, especially for the more expensive products, where the bids do not cover the item cost plus a large margin to account for the system, databases, salary, etc.
That said, I don’t have anything against Swoopo, but based on these perceived margins, it would seem they could make their bid price much cheaper. Even if 4x the bids are cast, people would feel better about losing $.25 per bid rather than a full $1.
Another error I’ve found in the site is that they regularly OVERSTATE THE SAVINGS. I’ve seen auctions close where the winner has 3 of the last 10 visible bids, but the end report says they won with only 1 bid. The root of the issue seems to be when a person wins with Bid Butler. You can book more than one Bid Butler at different price points. So if one is set to bid up to 5 times between $0-$10 then you set a second to bid 5 more times between $15-30, then you win the auction on your last bid at $30, Swoopo only looks at your last Bid Butler of 5 bids to calculate the amount you spent. So Swoopo would say you used 5 bids, but you actually used 10. Additionally, they don’t count “free bids” against the savings, even though you’d have to spend money to win free bids in the first place. Therefore, if you win some free bids, then win another auction using those free bids, Swoopo says you saved 100%.
I’ve been watching Swoopo and even dived in to trying it out. After wasting a bunch of bids here & there, I reassessed my strategy. I did win a “50 free bid” auction. It took me around 20 bids to win, so I netted 30 free bids. If you’re thinking of trying it out, do like they say - start small. Don’t go for that ipod or LCD tv. Go for a free bid auction, the $80 cash, or something. Before you ever place one bid, most of all, OBSERVE! Watch other auctions as they unfold - you’ll start to see some general patterns to how auctions end. READ everything you can on the BidButler so you understand how it can work, then observe auctions to see how people use it both advantageously and also to their own detriment.
on November 5, 2008 at 02:33 PM - LINKjerry summers said:
“Swoopo is a defenite scam. Check out this 300 bid card that I watched goto $576.75. I watched bidding continually go higher and higher for 45 minutes.“
Jerry, go back and look at that auction. It is “100% off” meaning you don’t pay the final bid price. Your cost is only the # of bids you made. In this case the winner placed $32 in bids and won $300. That was his total cost. Swoopo on the other hand made $576 on a $300 auction due to all the bidding.
The BidButler is the scam part - it is supposed to automatically bid for you when the timer drops to less than 10 seconds. However, I’ve seen it where if there is more that one bidder using BidButler, it won’t wait until 10 sec and will run up bids among all the BidButlers until they are extinguished. This wipes out all automatic bids, while SingleBidders can save their bids and sit on the sidelines.
on November 14, 2008 at 12:23 PM - LINK