Gambling + Shopping = Swoopo

Swoopo is a brilliantly addictive (some might say downright insidious) new auction website that can best be described as Las Vegas casino meets eBay. The online retailer refers to its service as “entertainment shopping,” a bidding model that offers users the chance to purchase products at deep discounts with more than one catch.

Auctions for everything from laptops to flatscreen TVs start out at the “too good to be true” price of $0.01 and go up from there in $0.01 increments until the timer counts down to zero. However, during the final moments any bid received extends the auction by 20 seconds, allowing it to go on indefinitely.

And while this fact alone is a clever enough move, ensuring that there’s always a fury of activity at the end, the true genius of the Swoopo model lies in the fact that each bid costs would-be buyers a seemingly reasonable $0.60. However, it’s this nominal fee that enables the site to rake in its fair share of money, while still allowing winners to walk away with such amazing deals. And though it’s the losers who ultimately wind up paying the real price, Swoopo makes certain that there’s always another opportunity to try again.

[via Freakonomics]

[image via Gabriel_Not on Flickr]