I guess they've been around for a while but I just heard about these new kinds of sites recently. Like penny auctions and reverse auctions. I'm wondering if anyone has tried them out?

like:

www.circuspop.com or
www.swoopoo.com

 

swoopo.com you have to pay .25 for every bid you put up but the price of the item increases by only a penny. its so gay. u might get a computer for 12 bucks but you'll spend countless hours and 2k just trying to get the highest bid because you don't actually bid a dollar amount of you choosing, instead you pay .25 to raise the price one penny. and there are a ton of bids going on. so ppl must use it but i think the only ones who ever win anything off the site are the idiots who have no life and sit at home doing nothing but bidding on items at extremely odd hours or at night, while everyone else is off sleeping or working and paying taxes for their lazy asses to be a ****ing leech on society and use our goddamn money!!!! i hate freeloaders if you couldn't tell. =)

 

All of those penny-auction sites work on the same principles that casinos do. There are more losers than winners and thus the house always wins. The few winners fuel the other bidders. I can tell you from experience with addicted gamblers in my life this is exactly the type of thing they would flock to. Most auctions go like this:

Retail price: $2,499
Winning price: $250
Winner spent on bids: $450
Total cost: $700
Savings: $1,900

But look at the hidden cost to every other person who bid on the item:
at 2 cents per bid it took about 12,500 bids to push the price up to $250. The winner spent $450 on bids (at 60 cents each), so they bid 750 times. Subtract the winners 750 bids from the total pool of bids (12,500) and you get 11,750 bids from people who did not win. Those 11,750 bids cost the non-winners $7,050

So altogether the site collected $7,750 dollars and has to mail out one TV worth $2,499. Swoopo, being one of the most reputable of these sites will allow non-winners to convert their lost bids into a discount which they can use the purchase the item at the listed price. So if you spent $500 on bids, but didn't win, you now have the opportunity to purchase the TV for $2,499 - $500 = $1,999. But since the value of the item is always list at MSRP those prices are over inflated. I've seen laptops listed with a value of $999 a selling on amazon.com and bestbuy.com for $689.

Summary:
If you have gambling problems stay away! It doesn't look like it on the surface, but this IS gambling.

If you have the cash on hand to buy one of these items at full price (and don't have an addictive personality) then it might be worth while to try and win an auction and save 50%-90%. Worst case scenario is that you pay full retail price (10%-30% more than shopping around) for the item. If you go into one of these auctions and your not prepared to pay full price for the item, then you stand to loose your entire investment.