Smokoo... The biggest scam on South African internet ??
Cross posted on my posterous blogI came across a (relatively new) website called Smokoo.co.za. The site follows a growing worldwide phenomenon called "pay-to-bid auction", which allows users to bid on a specific item, which in turn increments the value of the item, by a pre-determained amount, as well as increases time remaining in the auction. Each bid in turn costs the bidder a specific amount. When the clock hits 0:00 and if you are the last person to have bid, you "win the auction" and then have to purchase the item at the price it ended at, plus add delivery. Sounds confusing ? Exactly. That's the idea behind the site, confuse the shyte out of people, and print cash. So here is a practical example:Yesterday afternoon an auction started for an iPad 64GB 3g (http://www.smokoo.co.za/auctions/smokooauctionipad64gb_3gwifi_2_425b72)
The "recommended retail price" on the site was R11,000. Delivery if you win is (a staggering) R600. Right, so you register on the site, and buy a package of bids. Each BID costs you R5 (Five Rand). You can buy various packages of bids, so for example 50 bids for R250.
Every time you or a fellow bidder bids on the iPad, you increase the price you will pay by 5c. So the price you will pay for the iPad starts of at R0.00, and increases each time a bid is made by 5c. They also offer an auto-bid service which you "load up" bids, and let it bid for you. The iPad auction (eventually) ended this morning, with the final auction price at R1076.90.
Lets do the maths:R1076.90 (Final Price) divided by R0.05 (5c) to get the number of bids placed = 21538 total number of bids placed on the iPad auction.
Each Bid that was placed costs the user R5. So 21538 (Total number of bids placed) times by R5 (cost of each bid) = R107,690.00 (One hundred thousand odd rand)
That's what Smookoo made out of that auction, minus the cost of the iPad and other costs associated with the site (hosting etc etc etc) To me, this is crazy. They are taking people for a ride. A couple of times, I saw the clock hit 00:00, and then all of a sudden it jumped up again. Here is a screenshot to show:
The "recommended retail price" on the site was R11,000. Delivery if you win is (a staggering) R600. Right, so you register on the site, and buy a package of bids. Each BID costs you R5 (Five Rand). You can buy various packages of bids, so for example 50 bids for R250.
Every time you or a fellow bidder bids on the iPad, you increase the price you will pay by 5c. So the price you will pay for the iPad starts of at R0.00, and increases each time a bid is made by 5c. They also offer an auto-bid service which you "load up" bids, and let it bid for you. The iPad auction (eventually) ended this morning, with the final auction price at R1076.90.
Lets do the maths:R1076.90 (Final Price) divided by R0.05 (5c) to get the number of bids placed = 21538 total number of bids placed on the iPad auction.
Each Bid that was placed costs the user R5. So 21538 (Total number of bids placed) times by R5 (cost of each bid) = R107,690.00 (One hundred thousand odd rand)
That's what Smookoo made out of that auction, minus the cost of the iPad and other costs associated with the site (hosting etc etc etc) To me, this is crazy. They are taking people for a ride. A couple of times, I saw the clock hit 00:00, and then all of a sudden it jumped up again. Here is a screenshot to show:
The auction ended soon after this, with the same user winning the auction:
This should be equated to gambling, and given the recent laws being passed in South Africa, surely this should be regulated. At least with gambling on a slot machine, you have a much (much) better chance of winning. Not 1 in 21538 ? Have you tried Smokoo, and what are your thoughts ?


