Auction Money Making technique: IS THIS LEGAL?!
 

http://www.swoopo.com/new.html

Breakdown: People pay a fee to place a bid on an auction. The site spends full price on a prize, people pay such minimal fees that they don't mind bidding--a lot. Aggregate the bid fees and the site makes way more money than it spent.

Legal?

These guys have been around a while. There is actually a method out there to win the items at a low price with very few bids.

It's basically a twist to an "All-pay auction" model, which is I think illegal in the US, but legal in some countries... :2 cents:

There is?

Got a link re legality in US?

I am not sure about the legality of it, but I wish I had thought of it :)

Also, they bill themselves as 'entertainment shopping' so that may be part of how they are skirting certain issues.

Best I can tell, they are using only items that they can have drop-shipped, so they don't even keep an inventory.

Freaking Geniuses!

This part is full of WIN!

That site got me thinking re other items that can be marketed that way:thumbsup

No, I saw it discussed somewhere a while ago, someone said that it's illegal in US, but legal in Europe I think... it was just someone's opinion though, it wasn't a credible source for sure... I didn't look into it very closely, but all the sites I checked were indeed based outside of the US....

It's quite possible it may be legal in the US ->
http://www.law.yale.edu/news/8570.htm

there is no mention of it being illegal in that article...

It's illegal in certain states from what I recall. There was a domainer that tried using a similar approach to auctioning off a domain several months ago which caused quite an uproar, though part of the uproar was because it was a "mystery" domain which he was guaranteeing bying off the winner for $10,000 if they wished - ergo he was auctioning off $10,000, and THAT I'm pretty sure is against the law in every state.

The legality of this method seems iffy cuz it smacks against gaming laws. In France or England, Im not sure, according to CNBC, some guy sold his house for quite a chunk of change despite the down market by dividing into into $1 tickets. Sadly, gaming enforcement authorities were on him like white on rice.

Definitely needs to be done offshore

50 bids just sold for $1.59, i guess that means its REAL? :1orglaugh

kinda defeats the entire purpose when they say bids are 15 cents or 75 cents and then you see bids are worthless.
and are you going to be the one who bids .98 cents for a camera knowing it costing you 15 cents when you KNOW its gonna go higher??
This is why its flawed...

Damn, I don't get it :(