A new kind of auction?

I was browsing a forum when I came across someone spamming the board for this site: https://www.pennypurses.com/ (possibly trying to improve their PageRank? Ha). The site claims to sell designer handbags for very low prices via a new kind of auction where it costs a user $0.75 each time they bid, and the price of the item goes up 1 cent for each bid, and the time of the auction is extended. If 100 users each bid five times for a given auction before it ends, the end price will only be around $5 (which the winner pays, along with the cost of her own bids), but the site owner will have made $225 on the auction through bids.

This appears to be a scam, since there is no way the owner could make enough revenue to profit off the items he/she is selling (the bags on average cost more than $225 each) unless such a huge number of people bid on each item that the cost would be driven up far above $5 anyway, making the auction less of a good deal for bidders. In any case, I think the site would be unlikely to find enough people willing to bid for $0.75 (which adds up quickly) for an item they ultimately have very little chance of winning, when they can submit as many free bids as they like on competing sites like eBay.

Something like this was already posted under the name “Swoopo” (search the name to find the blog post) where it’s all pay auction in which the profit is large as long as a lot of people bid. I agree with Christine that it’s kind of silly to be a bidder in this kind of auction seeing that you have a very little chance of winning. I’d have to disagree, however, with the comment that not many people will participate. If you think about how many people play the lottery, this is just a miniaturized version for less stakes.