Regards,
Cathy Saar
Penny Auction

New Penny Auction Site Muulu Is a SCAM

Whats the deal, is it like ebay?

Thanks

Check out the new website where 1 bid cost as low as 10 cents per click: http://www.for10cents.com

Swoopo has created it’s own market and has created the rules in order to influence that market so it can make money. Basically, it’s goal is to SUPPLY enough auctions to match the pace of DEMAND in order to convince it’s prospects (you and I) that the reward is greater than the risk. Swoopo APPEALS TO THE GAMBLER AND ALSO TO THE UNSUSPECTING. It is to the unsuspecting that I write this post.

Swoopo’s business model involves INFLUENCING both sides of the market – controlling the supply and inflating the demand side. Ever notice that the number of auctions generally remain the same in each category? The supply is very consistent. Ever wonder why Swoopo doesn’t just use a dollar for dollar bid system? or why they make the rule that the clock will reset with simultaneous bids? Why are there so many penny auctions? Why are most all auctions “International” and not just the US? These are their rules so they can nearly guarantee their making a profit. Let me explain.

In the Swoopo “economy”, the price of the product doesn’t really determine when the product sells. All the low price does is entice unsuspecting bidders to play the game. It is a tool to PROLONG demand for that auction. The product actually sells when the demand for an auction lets up enough so the clock runs out. In other words, the risk one takes in the Swoopo economy is that the demand will never let up enough for you to win before you run out of money (and/or the nerve) to keep bidding. To help me explain this concept, let me take this concept to each extreme.

At one extreme, suppose Swoopo floods it’s site with 1,000 identical computers and there is just one bidder that is interested (or who knows about it). That bidder would walk away with 1,000 computers costing $10. Swoopo wouldn’t survive. This is obvious. What may not be so obvious is the other extreme (and what most people may not understand).

Taking it to the other extreme, if Swoopo only allowed one computer at auction, and there is a CONSTANT demand for that computer, the auction would NEVER END until the price reached the retail price!!! At this point, new demand would cease and the winning bid would come down to those who are heavily committed to the auction because of the money they have vested in it. After a history of these kinds of transactions, it would be obvious, even to a monkey, that there is no benefit to playing Swoopo. You could just go buy the computer from a reputable retailer with less head ache and risk. Swoopo wouldn’t survive in this type of extreme market either.

Let’s now look at Swoopo’s “economy” based on these two extremes. Swoopo must stay in the middle of these two extremes in order for it to entice customers AND make a profit! They have created their own system that is heavily influence through it’s playing rules and in the SUPPLY of auctions. The rules they have made are to maximize GENERAL demand – to slow the auction down so wave after wave of customers run across the auction and feed a perpetual bidding war. These bidding wars heat up and cool off – they ebb and flow racking up several thousands of bids. On the supply side, (if their business is honest) Swoopo will allow just enough product into the market so there are winners.

Swoopo’s rules slow down the auction process to keep demand flowing and people bidding. One rule is the .01 cent and .15 price increments. These small increments are merely a confusion to unsuspecting people to think it is a good deal so they will play that auction. It takes a long, long, long, time to move the price to it’s retail price a penny at a time. Resetting the bid clock also prolongs the bidding war and allows wave after wave of new demand to prop up these bidding wars. International auctions are yet another way to even out the demand.

In Swoopo’s economy, Swoopo controls the entire supply side. This is very dangerous because it gives them the ability to manipulate auctions at will – no checks, no balances. I’m not saying they do rig their auctions, I’m just saying that there is no one to notice should they choose to. Swoopo places all of the auctions! They give account to no one but themselves.

Take notice that they average about 200 auctions at a time. Also, compare the 200 auctions to the 5 countries bidding on them! Do these odds really make sense? My point is that this not only a gamble, but a big one at that. The odds of winning a legitimate auction, as Swoopo has structured it, are very, very slim. Watch any auction that is in it’s last seconds. Watch how many people are bidding in those last moments. Follow the bidding war for a short while. How many new names do you see join the bidding process? How many times does it ebb and flow when Bid Butlers but heads? Most importantly, notice how the auctions are ending. Do the auctions end because the demand dries up (I haven’t seen one yet) or are you watching auctions with ten active bidders, half new to the scene, which abruptly ends? Remember, there are only three ways to win: No one is bidding, lag prevents bids from registering, or foul play on Swoopo’s part. All I am saying is just watch several for yourself and apply your logic after you see how most all of these auctions end.

I hope my thoughts have helped you see that Swoopo is a gamble. If you are a gambler and accept this risk…go for it. If your stomach churns then forget Swoopo exists and move on.

But keep covering awesomeness!