One Fell Swoopo

I need to figure out a way to make money doing nothing. I know how to make money doing something, but I'm just about tired of that. Today I was introduced to swoopo.com. I guess it's a fairly new website; at least to me. I just want to talk for a minute about how this works.

Let's use eBay as a point of reference. Everyone knows how it works: You have an item, and a set amount of time to bid on it. If no one else bids, the item is yours. If you do get outbid, enter a higher price or kiss it goodbye. Often times, even with shipping and handling, you can get a pretty good deal on eBay. Sometimes, however, you're better off going to the store. Basically it's an online auction. Pretty simple, right?

Now here comes swoopo. Let me break this down for you before I get to my point. So the basic concept is, you have an item. Before I go on, I just want to be clear that I am not talking about a pair of Chucks or a fitted hat. I'm talking 47" LCD TVs, PlayStation 3s, HD cameras - the good stuff. OK back on track. Let's say the item starts at $0.01. Yes, one penny. In a sense, it works the same way eBay does. You bid and hope no one else bids higher than you. If you're the last bidder when the time runs out for that item, you win that item, and most likely at a deeeeeeeply discounted price. I've seen a 40" Sony Bravia LCD TV go for $3. At this point you're thinking it probably can't be legit, right?

Therein lies the rub. Each bid costs $0.75. So every time you bid, you're spending money. And to make matters worse (or better, depending on what side of Swoopo you're on), every time you bid time is added back to the clock. So let me paint the picture. I'm bidding on that Bravia. The current price in the auction is $60. 2 seconds left. I place my bid (costs me 75 cents), and the price goes up to $60.01. Now there are 17 seconds left. Clock ticks down to 8 seconds, someone else bids. $60.02. 23 seconds left. See where this is going? Now on one hand, you may get a $1,200 TV for 60 bucks. But think about the operators of this website. If this item started at one cent, is now at $60.02 and each 1-cent bid costs 75 cents, you've already made over $4,500 on one item. Profit and then some! It's been described as "a cross between a raffle and a game of chicken."

Still with me? Now assume there's no inventory. Assume the Swoopo people - geniuses as I like to call them - collect all the money from these bids, go to bestbuy.com, order the TV and ship it to the winner's house. They can literally collect money from people trying to get a deal. Capitalism at its finest. Now let's throw some other factors in there. It's an international website. So basically if you plan on going on to Swoopo in the wee hours of the morning to catch it at an "off peak" time, no such luck. It's still lunchtime in Tokyo. Or the day's just starting in Prague. And whatever it costs to run this site, or whatever overhead they have it can't be much, at least not enough to make it unprofitable. Brilliant.

My point is this: As with any great idea, I'm mad I didn't come up with it. And don't think I won't try to come up with something better.

I really just want to be rich. That's all.