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    Airlines Can Charge, People Will Pay

    April 15th, 2010

    All sorts of talking heads have been in the news recently discussing what the impact will be of the decision that Spirit Airlines to charge people up to $45 per carry on.  They talk about how other airlines will watch them to see how the program is received by the public.  Then of course there are the Southwest commercials that only talk about how they don’t have bag fees.  But all of these people, in particular Southwest, are missing the boat.

    People  get upset when new fees are implemented.  Some fees, like for checked baggage, are just frustrating while others, like charging for bathroom use, are silly, and still others are illegal (like charging for handicap assistance).  But these fees only make people upset for the moment and then they pay.  I would argue it is in danger of becoming a confusopoly.

    What makes it worse is that the pointless TSA rules force you to discard items (like beverages) and yet provide no oversight on the cost of the beverage on the other side of the gates.  Meanwhile they are spending $1 Billion on scanners that, by all accounts, don’t work, are able to transmit ‘nude’ photos (as specified in the requirements document in the original proposal), and could damage your DNA.  And of course this is tax dollars and additional security fees at work.

    Whatever, the point is there are lots and lots of fees which brings me to the point of this post: all of the power is in the hands of Kayak and Priceline.

    Think about it for a second.  Airlines are imposing these fees so that they can get the lowest far shown, which should drive business.  This clearly is based on the assumption that price is the most important thing to customers that are traveling.  And yet nothing is being done on these comparison sites to expose this.

    Which brings me to my secondary point: Southwest is getting screwed.  If I ran Southwest starting tomorrow, the first thing I would do would be call up Priceline and Kayak.  I would get an estimate of what it would take to add “how many checked bags”, “how many carry-ons”, “how many in flight meals/snacks”, “how many in-flight bathroom uses”? and similar things to the site and I would pay to develop that functionality.  The prices people see now are simply no longer valid.  There are too many additional add on costs to just keep ignoring them.  And for an airline like Southwest, to not expose that more in a pricing engine is a HUGE miss.

    While I like the lower costs, and I like the idea of only being charged what I use, I also think I like to feel like I got a deal, or at least am not being taken for every cent I have.  It is a very delicate balance, and probably depends on the point of the trip (business or fun).  This could get interesting.

    What do  you think about the more a la carte structure (besides that cable companies should offer it)?

    This has been a Thought From The Cake Scraps.

    How To Make Money On Theists, By Eternal Earth-Bound Pets

    February 24th, 2010

    This is a must read.  It is quite possibly the most ridiculous business idea I have ever heard.  And yet here a guy is, that has made$11,000+ so far.

    Basically Bart Centre started a business, Eternal Earth-Bound Pets, that is centered on the idea that atheists will not be taken when The Rapture happens and neither will pets.  This is how it is sold according to the Feb 22, 2010 issue of Business Week:

    “In this event, they say, the righteous will be spirited away to a better place while the godless remain on Earth.  But what will become of the pets?”

    And the website itself says:

    “The next best thing to pet salvation in a Post Rapture World.”

    “If you love your pets, I can’t understand how you could not consider this.”

    So everything about the site, including the name – Eternal Earth-Bound Pets – is focused on making pet owners feel bad that when The Rapture comes their pets will be left behind.  Thankfully for them, atheists will not be taken and, therefore, will still be around to take care of the pets.  But of course there is a fee for this.  $110 gets you a 10-year contract.  IF The Rapture happens in that time, the pets will be taken in by atheists approved by Eternal Earth-Bound Pets.  Otherwise you just burned you money, similar to any other insurance deal.

    It is very clear that Mr. Centre thinks that his customers are complete and total morons.  But, to his credit, the guy is completely upfront about his whole business plan:

    “I’m trying to figure out how to cash in on this hysteria to supplement my income.”

    “If we thought the Rapture was really going to happen, obviously our rate structure would be much higher.”

    I’m not sure how I feel about this whole thing.  On one hand it seems like the phrase “a sucker is born every minute” has never been more applicable.  On the other, if you really think that The Rapture will happen, and that your pets will not make the trip with you, this could ease your concern.

    It is the same thing that a tarot card reader, ghost communicator, or any ‘fortune teller’ relies on.  They, and perhaps their clients, know that they are completely making stuff up.  BUT, if, at the end of the day, the person with the ‘power’ has made the customer feel better, or given them hope, or given them something exciting to think about, has the person got their moneys worth?  I, for one, hate horror movies and cannot imagine why someone would pay to have themselves scared (and haunted mazes are only slightly better).  And yet there is no way that I can call the whole genre a scam because not everybody feels the same way, obviously.

    So do you have pet after-rapture insurance or is the whole thing a scam?

    This has been a Thought From The Cake Scraps.

    Why Free Content Isn’t Free

    November 20th, 2009

    Advertising.  That is the motto of seemingly every business you hear of today.  They will provide a service that is free to the customer and it will be supported by advertising.  Even Twitter said today that they will be launching an advertising business soon.  Fine.  I get it.  There is tons of money to be made with advertising.  Look no more than the post on Shoemoney where Jeremy says that:

    We allocated them a small budget of like 100k for a week and they did incredible.

    A SMALL budget of $100,000 per WEEK.  Yeah, there is money to be made in advertising space on your product/blog.  It is a great idea.  I have ads on this blog to help offset the cost of running it.  Hey, if it works that is great.  And best of all?  The consumer gets the content free.  Right?

    Well, that really all depends on your definition of free.  You get a discount at your local supermarket when you swipe your shopper card.  You earn rewards on your credit or debit card.  You get to use a product and it costs you nothing.  But one must stop for a moment and think about what is really happening.

    Business are generally not in business to be a charity.  Otherwise they would be a charity; that’s how these things work.  So that means that whatever strategy they are employing at the current moment is probably set up so that the company makes money.

    Now of course there are two sides to every coin.  You swipe your shopping card to get a discount.  The company collects the data and learns from it.  They place things near each other to cross sell.  Is this a service – they want to make it easier to shop.  Or is it trickery – you will buy both items even though you only need one item.

    The same is true with credit card loyalty programs.  Of course you get rewards so you are happy, but the company is also collecting data on you buying habits – maybe to send you offers in the mail.  Like the stuffers that come in some bills.  You don’t really think that stuff is all random do you?  (well, it might be, but not if the company is properly leveraging the data)

    And of course the ads for free services.  Even if you never click them, you see them.  They are the billboards of the internet.  You just have to trust that the display advertising works (or test into it).  They are impacting your perception of the brand or at least keeping it top of mind.

    Perhaps these are trade-offs that you willingly make.  Maybe you think you are the exception and don’t see it all.  That may be the case, but there are lots and lots of ever increasingly sophisticated way to trick your brain.  What our brains react to, how they work, what areas are activated when image A is viewed vs. image B.  Really, there are places doing consumer research where they are actively scanning the brain of the volunteer while they participate in the study.

    It is a very interesting, but possibly scary field – for the consumer.  So when you see all of these ad supported things and think it’s just free, consider what you are actually selling to get it.  Yourself.  And as the techniques get increasingly intelligent, the idea of ads everywhere gets increasingly uncomfortable.

    What do you think about all the ads?

    This has been a Thought From The Cake Scraps.

    Virtual Goods And How I Don’t Get Them

    November 4th, 2008

    I may be in the minority or maybe I just don’t have enough money to throw away or maybe I just don’t get it.

    Viximo is a purveyor of virtual goods, more commonly called gifts.  While I would not say that they are common on Facebook, Facebook is the largest platform that they exist on (to my knowledge).  To be fair, while I might not think that they are common, Facebook is counting on it for revenue and not in small amounts.  It is estimated at $30 to $40 Million a year.

    I don’t know how much Viximo is planning to make but when I first read about them over at TechCrunch I knew they would make money.  To be clear, I still don’t get it.  I know they will make money, and lots of it since their cost is fixed and it does not matter how many of a particular gift they sell, but why do people buy?

    The value of something is defined by two things – supply and demand.  There is nothing more to it.  If you had 1 ton of gold and nobody wanted it you may as well have 1 ton of gravel.  In contrast you could have that ton of gravel in a place where no quarry exists and everybody wants it and it could be worth lots.  It is all supply and demand.

    How does this relate to virtual goods?  If someone buys a virtual gift who really owns it?  If Facebook goes under – work with me here – where is your virtual gift?  Gone.  Do a google search on what happens to DRM protected music when the issuer goes under.  The sites going under will actually tell you to burn your songs to a CD and rip them back to your hard drive because you can’t transfer them or have the DRM validated after the site shuts down.  Why risk it?

    I guess my point is that I understand that it can be fun to give a gift, it doesn’t really make sense.  Just e-mail them some clip art.  The only thing that I think makes sense is the free gifts.  The gifts that are sponsored by a company.  If the company takes its time, makes it clever, and makes it interesting then it can be a great marketing tool and a fantastic way to generate some buzz around the brand.  So it makes sense to a company to pay Facebook to offer their ‘gift’ but can someone explain why I should pay for one?

    This has been a Thought From The Cake Scraps.

    eBay Continues Changes

    October 23rd, 2008

    eBay is once again changing the way it does business by adding more restrictions to its sellers.  Remember when eBay added in the features that allowed a buyer to rate a seller on several categories?  Well now eBay is using that as a basis to say if sellers can continue to sell.

    This excerpt from BizWeek illustrates it quite well:

    In a nutshell, eBay wants its sellers to keep a 4.3 or above (out of 5-star) composite average on several metrics on which customers leave feedback. The most controversial is the shipping and handling feedback. A 4 in this metric means “reasonable,” but if a seller starts getting mostly 4s, eventually that will pull her overall rating down below 4.3. If a buyer rates the shipping charges as “neutral” (3) or “unreasonable” (2)—even if that perception is mistaken—the seller’s ratings will plummet and her account can be suspended. Sellers do have 30 days to increase their rating while they’re suspended, but if they’re not selling, it’s obviously tough to get better feedback.

    It is clear that eBay really does not want to be in the auction business anymore.  These new rules make it very difficult for sellers, and exceptionally difficult for low volume sellers, to stay compliant.  All it takes is one or two disgruntled buyers and you are screwed.  I am glad that I got out while things were still not all that bad.

    These sort of changes make me wonder though.  A business always has to be evolving or they risk being left behind.  You have to find new opportunities or niches to fit in to have growth.  But what if you lose your core competency while doing so?  Are you so focused on growth that you would risk the thing that made you great?

    eBay was known as a place for auctions.  That was what they were good at.  As they move toward a model that is now focused on Fixed Prices not auctions, I think they are giving up more than they realize.  It is easy to blame the lower profits on the economy now, but I would think this would be a time for eBay to shine.  People are selling stuff they don’t need and also looking for stuff at a good price.  As eBay continues to make these changes I wonder if the current economic circumstance is clouding eBay’s view of the business model they are chasing after.  Then again, maybe eBay is positioning itself to take on Amazon.  This could get interesting.

    This has been a Thought From The Cake Scraps.

    Tracking Yourself With Fitbit

    October 14th, 2008

    Previously I have covered how a site’s internal campaigns track you and how a website should track you but Fitbit tracks you in a whole new way.

    I originally read about this a few weeks ago and just saw another post about it over at TechCrunch and I still think that it is pretty sweet.  The device claims to be able to:

    help you determine how much exercise you’ve been getting and how many calories you’ve burnt. It can also tell you how many steps you have taken and how well you’ve slept, all based on its internal motion detector.

    I have heard of a device that can track calories you have burned, or at least take a guess at it, but what I found to be really interesting is the claim that it can tell how well you have slept.  I am a pretty light sleeper and I would be really interested to know how often I really wake up during the night.  I also think that it is a great way to remind people the importance of exercise.  Besides, who can not love something that basically seems like Nike + iTunes on speed.

    The other really cool thing is that

    All data gets automatically synchronized to your computer and then the web through a wireless base station, so you don’t even have to plug it in. Once synced, you can view your health reports online. -TechCrunch

    There is something awesome about graphs, charts, and numbers that I generated myself that just seems better than graphs, charts, and numbers that I didn’t.  The only problem is that all this sweetness is $99.  Is that really worth it?  I’m not sure but I signed up on their website to get an e-mail as soon as they get some in stock.

    I wish Fitbit the best of luck on creating a business that makes money.  The road is littered with those who have tried, but I think this one has a chance.  I suggest you go check it out for yourself.

    This has been a Thought From The Cake Scraps.

    Penny Cave: To Each His Own Gimmick

    October 7th, 2008

    I have previously posted on Swoopo (Pure Profit: A Look At Swoop) and on the types of auctions they have. And as you can probably tell from the title, they are making a ton of money. Well apparently one Swoopo wasn’t enough so enter PennyCave.

    PennyCave operates on the exact same concept as Swoopo. You purchase your bids from PennyCave and then you use the bids on various auctions they have going. But, they can’t outright copy Swoopo so they have their own set of what I call gimmicks to sucker you out of your money. If you don’t have any background on either Swoopo or PennyCave read my post on Swoopo which describes in detail how the sites work.

    Gimmick 1: All Penny Auctions This is the most glaring gimmick that PennyCave has. By having each bid raise the price of the auction by only a single cent it makes the total price look very attractive. Consider seeing something worth $100 going for just $11.53. Then remember that that is 1,153 bids each at around $1. Swoopo has this style of auction but not each and every auction.

    Verdict on Gimmick 1: Fails to help the customer or be less of a scam.

    Gimmick 2: Discount On Bids If you buy bids in bulk you can save money. Since you waste the money anyway I don’t see that as a huge bonus, just a ploy to get you to buy more bids. I am guessing the thinking here is that while it is true that you will pay less for an individual bid, ultimately you will bid more than you would have with a standard cost bid ($1). Therefore, overall you will spend more money because you know your bids were cheaper, but who is going to calculate by how much? This also makes it difficult to see how much you really have into the site in bids because each bid may cost something different if you buy bids at different times.

    Verdict on Gimmick 2: Fails to help the customer or be less of a scam.

    Gimmick 3: Shipping Included This one is pretty self explanatory. In reality it is just another ploy to get you to think that you are not really spending that much. The real trick here is that in your mind you will look at an auction for $4.20 and think it is not so bad because shipping is included. That would be good logic if it didn’t take (at minimum) $315 in bids to get to that price.  And that is using a rate of 75 cents a bid, the lowest possible rate when buying bids and you have to buy $1000 worth of bids to get it.

    Verdict on Gimmick 3: Fails to help the customer or be less of a scam.

    Gimmick 4: ‘Auctions Live’ Time Frame This is another great example of ‘helping the customer’ meanwhile ‘robbing them blind’. By limiting the time the auction is live from 10 AM to 12 AM what looks a perk to you, the bidder, is really a scam by PennyCave to not let the auction end during an off peak time. By having bidding during a time that ‘you won’t miss the end’, guess what, neither will anybody else. That means that you will get to bid against everybody else and drive up the price and waste your precious bids. Time to celebrate this great customer service.

    Verdict on Gimmick 4: Fails to help the customer or be less of a scam.

    Gimmick 5: Fewer Live Auctions Clearly this is to minimize risk. Less live auctions means that more people will be bidding/betting on those auctions. On the plus side, you have less things to lose money on.

    Verdict on Gimmick 5: Helps the customer control betting but ultimately fails to be less of a scam.

    As you can probably tell I am not enamored by this site. It is very easy to get in over your head. Currently it looks like there are actually some good deals in the finished auctions section, but that is because the site is so new. Once more and more people start using the site it is only going to get worse and the deals with it. Just look at eBay and how they are moving from auctions to fixed price. It is not that you can’t get good deals, it is just that it is a lot harder to get the deal for the amount of time you invest.

    The bottom line is to stay away from these sites – so called “entertainment shopping” sites – unless you go into it with a set amount of money that you are willing to lose. If you don’t plan ahead like this you are bound to end up over investing in the auction and come out way behind. Just look at this auction where there is over 900 bids (at almost $1 each) and the thing retails for just $280. Not smart.

    This has been some Thoughts From The Cake Scraps.

    Types of Swoopo Auctions

    October 6th, 2008

    From my previous post on Swoopo I generated a small bit of confusion because Swoopo has several types of auctions.  Here they are directly from the Swoopo site (though I rearranged them a bit for my comments):

    Fixed Price Auction
    If you win a Fixed Price Auction, you only pay the price indicated in the heading of the auction (plus delivery costs), regardless of the level the bidding reaches.

    100% off
    Where an auction is marked “100% off”, the winning bidder does not have to pay the final price. That’s right: the price is zero! You just need to pay the delivery charges.

    These are basically the same thing and makes this site seem a bit more sleazy.  Here’s why.  With a fixed price auction or a 100% off auction you don’t pay the value of the auction, just the fixed price or nothing, respectively.  That seems straight forward until you think about it.  If they already know what they are selling it for (or that they are giving it away free) the users are basically just giving them money.  They are literally proclaiming “Here is something free, what will you pay me for it.”  Can you really even call that an auction if the bidders are not actually impacting the price?

    Penny Auction
    In a penny auction, the price rises by just one cent with each bid placed (whereas in a normal auction, it rises by 15 cents).

    Well this is nice of them.  In case you were able to hold off yourself from bidding when the price went up 15 cents with each bid they have auctions where it only goes up a single penny.  Thus, you look at the price and want to jump right in not realizing just how much money Swoopo is going to take you and other fools like you for.

    NailBiter Auction
    During a NailBiter Auction, BidButlers aren’t allowed. Users may only place single bids by manually clicking or calling. Don’t walk away or you miss the next incredible deal!

    This would be interesting except that the time goes up with each bid (see below).  So instead of a “NailBiter” you have a sit around all freaking day bidding and waiting for the thing to end.  Good times I’m sure.  Too bad I’ll miss it.

    Open Auction
    Anyone can bid on an open auction, even if they have already reached their eight auction limit. Open auctions do not count towards your auction limit. See ‘How many auctions can I win a month?’ for more information.

    Wait, I can only win so many auctions in a given time period.  Doesn’t this sound a lot like what a casino can do if they think you have a gambling problem?

    20-Second Auction
    All auctions start as 20-second auctions. The countdown increases by a maximum of 20 seconds each time that a bid is placed.

    15-Second Auction
    You guessed it – with these the countdown increases by a maximum of 15 seconds with each bid placed.

    10-Second Auction
    You guessed it – with these the countdown increases by a maximum of 10 seconds with each bid placed.

    Wow.  What variety.  It is like the Jelly Belly of auction sites.  Really guys, do we need a different line for each you guessed it – X second auction type.

    I hope that clears things up a bit for people.  In my original post I did have my math with the winner having to pay for the final price of the auction.  While this isn’t always the case, it often times is.  I’m not going to waste my time looking around for exact examples, but if you want to Swoopo does feature a list of completed auctions.  Please remember what Thomas Tusser said: “A fool and his money are soon parted.”

    Please Keep Searching: What Microsoft Is Missing

    October 5th, 2008

    Microsoft is trying yet another approach to get you to use Live Search.  Previously they have tried everything under the sun, including giving miles for flights such as Midwest Airlines.  Sadly the games there are nothing to write home about and it isn’t surprising that Microsoft went back to the drawing board.

    This the aptly named SearchPerks is set up to give away tickets that you can the trade in for stuff (the perks).  Sounds alright in concept, but it is poorly structured.  Right off the get go you notice to win anything worthwhile takes forever (though they say during the promotion they will give away extra).  Here is a simple breakdown from Search Engine Land:

    • 105 tickets (4 days worth of searches) = 1 ringtone
    • 250 tickets (10 days worth of searches) = 100 frequent flyer miles
    • 5,500 tickets (7 months worth of searches) = xBox wireless controller

    The length of time is determined because you can only get 25 tickets a day.  Oh, and the promotion only runs until April sometime.

    I wonder if they are taking the wrong approach to this altogether.  I really liked Yahoo’s “Search For A Cure” program.  The money is going to breast cancer research.  I also noticed that on a survey at Banana Republic the reward for filling out the survey was not a percent off or dollar off perk.  Rather it was some amount would get donated to a charity of your choice -from a list of 5 or so.

    The fundamental question here for me is what are you really trying to do with these programs and who are you targeting?  It seems like with a program that rewards the individual user that when the perks end they will just stop using it.  When I consider the promotions that donate the money I think that the user gets to feel good about doing it.

    Why is this such a big deal?  Easy, because when the promotion ends and the user was getting the perks they now have no reason to continue to use the service.  But if the perk goes to a charity, the user was not getting anything, but rather giving something, when using the service.  When the perk ends they are no longer ‘giving’ anything but also there is nothing that will make the user feel like something is being taken away from them – as is the case in a perk that rewards the user.

    Another important point, in my view, is that the perk for charity is more likely to be picked up on a larger news site because the company is giving to a good cause rather than greedy users (from a public perception standpoint).  I think that promotions that give stuff away on the web generate a big surge of people trying to play the system and then just fall off.  No loyalty.  No long term PR to point to for the company.  Compare this to a news story about how the company is “doing their part” to help the world.  The company can use the promotion as a platform to point out that they helped while also promoting whatever service they were trying to get you to use.

    So is this going to work this time?  I don’t think so because there is no long term perk for the user and I don’t see any reason to switch other than to “watch out for number one” and the stop after the promotion ends.  That is the thought from The Cake Scraps.

    10/4 UPDATE: While I never said that Live Search was a failure – just that Microsoft is trying everything under the sun – there is evidence from Hitwise that shows that the Cashback promotion Microsoft is running may be increasing Live Search’s use.  Extra information can be found here and here but I still stand by my post that these are short term gains and use will fall off if/when these promotions are discontinued.

    Pure Profit: A Look at Swoopo

    September 25th, 2008

    This post digresses a bit from web analytics but the business concept of Swoopo is so brilliant – but not endorsed by myself – that I had to post on it.  Before I get into this post I want to make one thing clear:


    Now that I have made my position clear I can get into how brilliant this site is for making money at the expense of others.  It is not customer service oriented and it is probably not going to have a ton of repeat customers.  What it will have is a huge pocket book as long as P.T. Barnum’s phrase holds true: There’s a sucker born every minute.

    First I will lay out for you how the site works.  It is a ‘auction’ site…sort of.  Swoopo sells bids for $1.  Each time you use a bid on an item the price is increased by $0.15 for that item.  So here is an example:

    Person A buys 5 bids from Swoopo for $5 total.  Person A sees an auction for $1000 and places the first bid.  The auction is now at $0.15.  Person A now has a sunk cost of $1 (the cost of the bid they used).  There is no way to get that dollar back, win or lose.  If Person A wins they must pay the $0.15.

    Person B also purchased $5 of bids.  Person B sees the same auction and places the second bid.  The auction price is now $0.30 (because each bid increases the cost by exactly 15 cents).  Person B now has a sunk cost of $1.  If Person B wins they must pay the $0.30.  Swoopo now has $2 in the bank and the auction is at 30 cents.

    This can happen with as many users as there are suckers to start accounts.  Why are they suckers?  Because everybody that does not have the top spot just loses the money they spent on bids.  *Poof* Gone.  If you think this sounds a little like gambling or a complete scam you are not alone.  People get swept up into the auction and don’t want to get nothing for the money they spent on bids.  I think you will understand it better if I show you an example of people getting ripped off on the site.

    Please note that while the math in the laptop example assumes that the winner has to pay for the item, Swoopo has different types of auctions which are described in my post on types of Swoopo auctions.

    An auction for a laptop that says on the auction page, and I quote, “Worth up to $1,399.99”  The winning bidder, as stated on the site, placed 2020 bids.  That is $2,020!!  And the auction page proclaims “Savings: 0%”  when it really should read negative!  So Swoopo made like $600.  BUT WAIT!  The auction started at $0.00 and finished at $3,353.85.  Now read that again.  They were already up $600 from the winners bids alone.  The winner sucker still had to pay $3,353.85 because that was the price of the auction.  Okay, so Swoopo walks away with a cool $4,000 pure profit.  (Like a bad TV commercial) BUT WITH THERE’S MORE!  Remember that bids are placed in 15 cent increments.  That means that if the auction finished for $3,353.85 you take that divided by $0.15 which equals $22,359 in bids!!!!  That brings total profit to $22,359 (bids) + $3,353.85 (auction) -$1,399.99 (retail cost of laptop, probably not their cost) = $24,312.86

    This is not to say that there are no good deals on Swoopo.  The auction for $1000 finished at $568.20.  The winner of that auction placed 218 bids ($218 dollars worth) for a savings of 78%.  Why is it 78%?  because it is a 100% off auction  – see my post on types of Swoopo auctions– meaning that you don’t have to pay the final value of the auction (how sketchy is that).  In theory, if no one else would have bid, you or I could have spent $1 on one bid and won the auction.  If we would have won the other guys $218 would have been for nothing.  Now keep in mind that if this were not a 100% off auction that the winner would also pay $568.20 in addition to the $218 for bids.  Total investment: $786.20.  Is that really worth the risk of getting nothing?  I think not.

    There are 2 kickers that I have to throw in yet.

    1. Every time a bid is placed the length of the auction increases.  Therefore if a bunch of people “snipe” it at the end, the auction can go from 5 seconds left to 20 min.  Yeah.
    2. And in case you were worried about the one who got away, Swoopo provides a “BidButler” that auto bids for you up to your set amount when someone out bids you.  If you are going to spend $1 a bid, please don’t let some BidButler do it for you.  After all they don’t call it “entertainment shopping” for nothing.

    All said and done this seems like a little bit of a scam, praying on people that either don’t get it or are stupid.  If one were to use this site the only smart thing to do would be to research what auctions of stuff goes for and then place a single bid when it gets to that price and hope you are not out bid.  Anything else is just a waste of money.  That is, of course, if you ignore the fact that everybody else who has bid gets nothing.  It is a combination of eBay and gambling – more gambling (in that you must pay to bid but if you don’t win you don’t get anything).  Think of betting on red in roulette, you only get something if you win otherwise it is gone.  At least if you win there others can win as well.  If it were Swoopo roulette if you won everybody else would lose.

    It is just amazing – and yet totally understandable once you get the mechanics – that this site made money selling $1000.  $3788(bids) – $1000 (cost of item) = $2788 profit.

    Paraphrased Swoopo business plan in short: find 10 people to give us $10 each and one of them will get this $20 gift card.  Repeat.  Official Song: I Get Money

    What do you think?  Scam?  Brilliance? Awesomeness? Just another web site?

    10/6 UPDATE: Check out my new post on PennyCave, a Swoopo look-a-like!