So, I'm looking at swoopo.com a new online auction website. Auction increments go up $0.15 a time, You pay $0.75 for the right to make a bid. Apparently, you buy blocks of bids to keep things moving.

For example:

An auction just ended for a Wii Fit balance board. Retail is $89

Auction Price $54.15

Swoopo Bid increments 361

Swoopo gets $0.75 x 361 = 270.75

Plus 54.15 as the auction price

Total = $324.90

Profit = $235.90 not including their discount from the distributor

I figure this must be illegal somehow, maybe some form of Ponzi scheme, but it looks legit.

I saw this a while back. It actually used to be $1 per bid, so it used to be worse. I guess they're going after the bad-at-math customer base.

You have to pay for the honor of making a bid??! No thanks.

A ponzi scheme is an investor scam -- deliver high yields of return on the first few investors by utilizing the money of the later investors. Not really something you would be able to determine based off the website. It looks like a site with a stupid tax -- unless you're the guy who wins the item with making only one bid of course :-)

-Tim