BigDeal – Swoopo Without the Losers
Back on April Fool’s Day, we talked about Swoopo and their “entertainment shopping” site. I was pretty critical because, well, the numbers just didn’t ad up and the site seemed to end up being a ripoff with only those who got lucky to win a price war making out and everyone else losing.
Apparently I wasn’t alone in that, since BigDeal.com has recently emerged from its former incarnation as Project Fairbid in a quest to directly compete and bring fairness to the Swoopo selling style. The idea is to remove the defeat and (probable) loss of cash many bidders on Swoopo feel when they don’t win a listing.
To accomplish that task, BigDeal has simplified the process so it’s not as confusing as Swoopo’s, has flat-rated the cost-per-bid and has taken losing bids and turned those into “loyalty points” that can be used to buy other stuff (mostly gift cards at outlets like Amazon and Footlocker).
While not as good as just getting a refund (if that happened, these sites wouldn’t have an income stream), it’s much better. The only down side I really see to BigDeal is the small number of picks to choose from in their product lineup. Right now, with the site newly-launched in it’s current incarnation, the number of users is small too–making it easier to win.
The site just received $4.5 million from Mayfield Fund, First Round Capital and Foundation Capital, so it’s got the backing to go somewhere too. This type of e-commerce might be the fastest-growing one out there now. So VC’s are considering it a better risk than some other startups.
Here’s a rundown of how BigDeal works:
You purchase bids from them in lots and those bids can be used for auctions. Every purchase means loyalty points, which can be used to discount gift cards. So if you purchase $25 in bids, you get 25% off a $100 Amazon gift card. Last, but not least, the prices on items, if you lose the bidding war, are competitive with major retailers like Wal-Mart.com instead of just listed at full suggested retail. So even if you lose the auction, you can still get a decent price on the item.
It’s free to sign up at BigDeal, but bidding requires you to purchase credits first.
