I am wondering if entertainment shopping sites are just a scam. I am wanting a realy cheap Ipod Touch. Basically the way such sites works is that you pay for your bids, and then with every bid placed, the item rises in price also.
They have a few variants on this where the price is fixed for example, but for the most part you end up spending money both on your bids, plus if you win you have to fork out money for the end product also.
The system isn’t terribly fair either, because they have such a thing as a bid butler, which you can set to automatically place bids for you. Sounds good in theory, but if somebody else puts a bid butler on as well, the two butlers just battle it out until one or the other has spent all their bids, and it ends up costing both people a fortune.
It’s not a scam though, and it IS possible to win, but it’s just very difficult, and there’s not really any skill involved to be honest.
If you’re looking for a website with a fairer system, there’s a site launching next month called Price Plummet, where again you do have to pay for your bids, but instead of the price going up with every bid, every item is initially listed at a maximum of half the RRP, and with every bid the price is actually driven down!
They have a competition up at the moment to win a ps3
the link is www.yellmann.com is good UK entertainment shopping site if you’re interested.
I’ve been receiving their newsletters and they sound really good

I discovered the most amazing website last night, at least until an enterprising attorney general somewhere decides to shut it down.
The site is Yellmann, and offers something they call “Entertainment Shopping,” though in my view it’s more akin to gambling for plasma TV’s. At first glance, it looks a lot like an auction site like eBay: items are for sale, there’s a clock ticking down on each item, and you can bid by clicking a big friendly BID button. Each bid increases the price of the item by $0.15, and most items start at just a few cents.
Unlike eBay, however, Swoopo charges $1 for every bid, win or lose. Oh, and bids near the end of an auction add time to the clock, so there’s always time for someone to outbid you.
Let’s say you see a Nintendo Wii (normally about $250) selling for ten bucks. Even though you have to spend a buck to bid that’s not a bad deal, right? So you wait until there’s two seconds left on the clock and click BID. You spend $1, the price goes up to $10.15, and the clock resets to fifteen seconds.
Well, there’s someone else who already bid on that Wii, and odds are he’s watching, and he’s already spent at least a dollar on it. Not wanting to lose his buck, he bids again.
Guess what! That Wii now costs $10.30, the clock is back to fifteen seconds, but you’re out a buck. But since $10.30 is still a great price for a Wii, you bid again. And now you’re into that Wii for two dollars, win or lose.
As the price goes up, the bidders have more and more invested in the item for sale, and are more and more motivated to not lose. This plays on a well-known tendency for people to go to irrational lengths to avoid a financial loss. Some items actually wind up selling for more than what they would cost in a store, and even if the nominal price is less than retail, some “winning” bidders spend more than retail by the time all the losing bids are counted.
Since Yellmann keeps all the money from everyone’s bids, they make money if the final price is more than about 15% of retail. If that $250 Wii is above $37.50, Swoopo is actually selling it for more than retail if you include the price of the bids.
It’s an amazing bit of financial engineering, specifically designed to use our cognitive biases to generate huge profits. I have to admire it as a tour de force of applied behavioral economics.
The reason I think this is more like gambling than shopping is because the “winner” of any given item is essentially random. There’s very little skill involved, it’s more like a game of financial chicken where the last one to run out of money (or give up) wins. I’m not enough of an expert on gaming laws to know if Swoopo actually meets the legal definition of gambling, but this hardly seems like any kind of bargain to me.

I found this jrgalang.pbwiki.com I wanted to share it with people here;

Questions:
If you were asked to program this example, would you do it? Why?
If I’m asked to program something similar to swoopo.com, I’d say it would depend. The reason being is, as Marketing Concept speaks, “Human needs and wants are innate. You have to find that need which will allow your product to sell.” Given such concept, you can actually then sell a product or service that triggers a need or a want of a human being, and the more that your product or service caters to that need, the more beneficial it is for that being. In the case of swoopo.com, whether it be a result of extensive marketing research or sheer luck, the site did what the marketing concept just stated, it triggered a human need – the need to value something they have more than that of what they don’t have.

The result of such triggered the divestiture aversion of its visitors, also known as the endowment effect, by offering products at low prices and letting members bid on a product which will costs the bidding member 75 cents per bid. As more and more 75 cents are put into a certain auction, the user behind the bid then establishes ownership of the item he’s bidding on, and thus over-values that item from all the rest of the other items available for auctioning and insists on bidding on the item more until he becomes the last bidder and actually win the item from all the rest of the bidders. Given that the endowment effect is pretty much inherent in all of us, if we believe in the site’s claim that they have 1,200,000 registered members, then imagine all the 75 cents that 1.2 million will spend on their bids a day, that will be equivalent $ 900,000 in just a day. You can even disregard the cost of shipping the product and actually ordering the product as the bids per product averages normally above that of its actual retail price, thus the thousands of bids for a single product is actually enough to pay for the product itself.

Sure, a lot may say it’s a disguised gambling operation, but after four years of operations, it’s still not declared illegal. It must mean that even with the 75 cents racket it has for the bids it offers, it actually still legitimately gives the promised product to the winning bidder with no scams. If such were simply the case, I’d be willing to program something like swoopo.com. But, let’s assume it’s not clean – let’s assume the site has algorithms that actually creates random user accounts that are actually bots and bid as if they’re real users just to top the previous highest bid and extend the auction time by 15 seconds more so as to wait for a real user to actually bid and spend 75 cents only to have his bid thrown over by another user, then a dummy user, and so on? That would already be cheating, lying, and even qualified theft which is judicially against the law in most states. If such were the case, then I wouldn’t program something like swoopo.com.

Is it right to program this example? Why?

As previously mentioned, it depends. If it were to be on the basis of pure marketing and with no algorithms that actually makes bids go in favor of the company instead of the highest bidder, then it is right. The company is then merely just lucky for actually being able to trigger a need and utilize it for their own means. Everyone is entitled to keep their business running through gimmicks now aren’t they?

But, again, if the program has algorithms that tops the actual highest bid by producing a dummy bidder until a certain percentage price is reached, then such would be wrong and as aforementioned can result in the company being filed with several lawsuits by the victims who fell prey to such illegal tactics.

The unfortunate part of it all though is the fact that no country still has ever implemented a law obligating programs to be source-viewable to everyone, thus, we can never really tell actually.

Ten (10) Integrative Questions:
1. What is swoopo.com?
Swoopo.com is an auction website that sells devices at rates lower than its retail price by charging its users $ 0.75 cents every time they bid over the current highest bidder and lengthen the auction time by 15 seconds for every new bid declared, thus granting more users to bid over the previous bids and possibly win the item.
Consequently, the website name, Swoopo, is coincidentally taken from the word swoop, which means to “come down upon something in a sudden, swift attack” which can be attributed to the website’s members who would have to bid at the very last second swiftly so as to be sure that they’re able to eliminate further bidders and win the item at the price they bid it for.

2. How can an auction website offer products significantly cheaper than that of its competitors yet still maintain profits reaching $ 21 Million a year?
The website can offer its products at prices cheaper than that of its competitors because of the pay per bid system it implements. The price difference it gives as opposed to the actual retail price of the product, with the numerous members that the site has, is shouldered by the numerous bid charges made by the site’s users.
3. How much does Swoopo.com actually earn through their unique pay per bid system?
Based from the article, an 8GB Apple iPod Touch retails for $229, which a Swoopo.com user was able to buy from the site for just $ 187.65. Given that 1,251 users made a bid for that item before it ended, the site garnered $ 938.25 from just one product alone. Deduct the retail price from the garnered amount and Swoopo.com will still have $ 709.25 left, which is a big amount of money to consider as just merely “net earnings” from a single product alone that actually just costs $ 229 plus shipping to provide to the winning user.

4. What is the endowment effect?
The endowment effect, also known as divestiture aversion, is the hypothesis that assumes people value a good they own as compared to a good that they still haven’t owned. It is quite powerful in this article as it actually emphasizes on the exploitation of human nature and tendencies. The theory though, being that of a mere hypothesis, makes it unable though to be used as justification for exploitation until further proven or confirmed.

5. Would it be possible that the endowment effect exists not only on humans?
Although a hypothesis, a test conducted by scientists and an article written by Charles Q. Choi of LiveScience.com was able to establish that the endowment effect also exists in chimpanzees.
The study proved that essential survival items are foregone for items valued higher by the chimpanzees themselves. Thus proving that such a hypothesis also exists in chimpanzees and possibly as well in other animals.

6. What if, in the occurrence of the inability to source for the auctioned item, the winning bidder is offered by an “equivalent” item and dislikes the “equivalent” item being offered, what happens?
In Swoopo.com, it recently changed its policy with “equivalent” item offers by allowing the winning bidder to choose from a list of possible equivalents, as opposed to the singular no-choice system of before. But, this raises technicality as the bidder fails to get the item that he legitimately won. In some states, this does result in lawsuits. Fortunately, in January, 2006, Sweepo.com now returns the bid payment of the highest bidder should no “equivalent” item satisfy the bidder himself.

7. How can Swoopo.com “silently” pit users from different states so as to ensure around the clock bidding?
In theory, user pitting can be done through algorithms that detects and filters auctioned items based on the user’s location. As an example, let’s assume that there’s one user from the from the UK, and another from the United States. The time zones are different, but the time zone of the user from the one in the UK is relatively close to the US. Thus, should an algorithm or program be installed within the site and detects the locations of both users and see that their time zones are close, the auction items shown to the user from the UK and US are the same, so as to increase the auction amount of each items more as compared to having different offers for the two users.

8. Why is Swoopo.com’s business plan considered to be brilliantly evil?
The site’s business plan is considered to be brilliantly evil due to the fact that the items are well below the retail price it’s being tagged in the market, but due to the number of bids brought about by it’s cheap amount as compared to the competition, people bid for the item, spending $ 75 cents for every bid and significantly increase the product’s price. The auction ends with the difference of the retail and auctioned price almost being similar, with the highest bidder earning the item at a cost almost just the same as buying it elsewhere without having to spend plenty of $ 75 cents to earn it, which only the site will be the sole beneficiary.

9. Would you consider the bidders of Sweepo.com as really being weak and uneducated?
Probably not, because, these bidders have credit cards to actually bid for an auctioned item and has the cash to actually spend for participating in the auction itself. Given that the weak and perhaps even uneducated less likely has the money to even participate in such online auctions, it can then be more generally assumed that the people participating in these bids are not at all weak nor uneducated.

10. What is caveat emptor?
Interestingly, always read these two words, but I always forget the meaning. So to make it a mark, caveat emptor in Latin means “Let the buyer beware.” It indicates that a buyer cannot make the seller liable for defects that may make the property that the former bought from the latter unable to be lived into for ordinary purposes. Relating to the case, indeed, buyers should do background checks first before participating in such transactions. Like they say, “if something is too good to be true, then it probably is.”

Online “penny auction” sites are similar to lotteries and should be regulated in the same way, according to a gambling expert.

Penny auctions have gained popularity over the last few months and now have hundreds of thousands of users.

The sites auction new items, often for a fraction of their retail price, and bidders pay up to £1.50 for each bid.

Professor Mark Griffiths of Nottingham Trent University believes the Gambling Commission “should look into this”.

“I think bidding on penny auction sites is akin to a gambling-like experience,” Professor Griffiths said.

“Obviously, when people are bidding again and again and again and they don’t actually win the item in the end, that’s very much like gambling.”
However, Juha Koski from online auction site Madbid.com disagrees:

“We have two experts who have given us their opinion on this.

“This is definitely a game of skill and would not form under any circumstances under the definition of gambling.”

Happy winner Successful bidders can win anything from a television to a car or a cash sum, for a fraction of its real cost.

Sandeep Anantharaman is one bidder who has won in style. He bid less than £7 for a new Mini. Not surprisingly, he is delighted:

“I did not expect to get the Mini when I started bidding. But once I got the message from the auction site telling me I’d won, I couldn’t believe it. ”

Penny auction sites have grown quickly and now have hundreds of thousands of users.

Concern Unlike eBay, where you can bid for free, users have to pay between 40 pence and £1.50 to place a bid. Bids automatically rise by 1p at a time, and some people make repeated bids.

Tony Northcott of the Trading Standards Institute believes some people may spend more than they realise on bids.

“My concern about these online penny auction sites is that people will bid for goods and not realise at the end of the day they may spend quite a large amount of money,” he said.

The Gambling Commission said it could not comment on individual sites and was not convinced that penny auctions amounted to gambling.

However, it added that it would keep a close eye on developments in this area.

There is nothing more exciting than participating in an auction when you bid to win!

A bid to win auction is one where one person or company has something to sell but isn’t sure of just how much he can sell it for. So he holds an auction where those who want to buy the item places a bid on it, the person who places the highest bid, wins the auction. According to the dictionary  “a bid is the highest price a prospective buyer is willing to pay for an item at a given moment.”

A bid to win auction might have many bidders involved. Bidding increments are set prior to the auction and can be as low as a penny or much higher, perhaps $500.  At least two participants are needed in a bid to win auction, bidders may know other bidders or the bidding can be anonymous.

Win to bid auctions also may have a “reserve price”, this is actually the lowest price the seller will accept and is usually the opening bid. Win to bid auctions used to be primarily used for the sale of paintings and artworks, but with introduction of the Internet, and sites like http://www.yellmann.com and similar sites  one can conduct an auction for just about anything. Generally, these are win to bid auctions with specific rules and mimic traditional auctions. They can be great fun if one is trying to find some obscure item, or the newest in electronics. Many times, in a win to bid auction the last few seconds can be very exciting. One gets quite a charge by being the winning (high) bidder for their prize that they otherwise might not be able to obtain.

Auction sites like http://www.yellmann.com sometimes make bid to win auctions a bit different. For instance, on yellmann one can only bid in increments of $.15. Also, on http://www.yellmann.com the bidding controls the timing – each bid extends the auction by so many seconds.

Bidders should make sure that they are familiar with the item they are trying to win in a Bid to Win auction. They should also carefully check the auction site out before bidding. Finally, the keen excitement of the bidding war gets your adrenaline going, make sure you have set a limit for your bid and stick too it. Otherwise, in all the excitement of a bid to win auction you might pay more than you can afford or more than the item or service is worth.

Bid to Win auctioneers (the person running the auction) is paid by commission on the sale.

Another type of auction is known as a reverse auction. The Encyclopedia describes a reverse auction as:

Reverse auction is a type of auction in which the role of the buyer and seller are reversed, with     the primary objective to drive purchase prices downward. In an ordinary auction  buyers compete to obtain a good or service. In a reverse auction, sellers     compete to provide a good or service by offering progressively lower quotes until no supplier is     willing to make a lower bid.

There are numerous reverse auction sites online. Originally started as a means of B2B procurement, there are now numerous sites for reverse auctions for consumer products. Where as in a bid to win auction, the seller attempts to get absolute highest price for an item. In a reverse auction, the buyer attempts to purchase the item at the lowest possible price. It works thusly, the seller sets a price for the item he wants to auction. Buyers, instead of using the starting price as the low point in pricing of the auction item, use it as the high point. Bidders in a reverse auction than submit bids below the starting price.

In a reverse auctions the bidders are not the buyers, they are the sellers. A reverse auction is won by the seller who is willing to accept the lowest price for a particular good or service. The reverse auction ends, when sellers stop bidding. In general, the lowest bid is the winning bid.

Whether you participate in a bid to win auction or a reverse auction it is a fun and exciting way of getting goods and services. And, usually, you get them at a good price.