Jellyfish Smack: How Low Can You Watch Prices Fall?

Though I find it a little bit frightening and bizarre, I’m watching right now a new reverse auction at The company’s standard practice is that it returns part of its revenues from sales performed through CPA advertising on its site. We reported on $5 million in funding for the company late last month. Now they have launched a feature they call the Jellyfish Smack of the Day.

Here’s how it works:
an undisclosed quantity of a particular item (today it’s an 80 gigabyte Video iPod) will be put up for auction, starting at its regular price and falling in price every few seconds. Users watch the price fall, torn between letting it fall lower and buying the item at the current price before the mystery quantity is sold out. There’s a forum for real time communication and the psychology sounds just nuts.

On the first day the event was held, 10 people got Apple 2GB iPod Nanos for free. On Friday 50 SD-P1700 Portable DVD Players were sold in the Smack, some for as low at $60. Thursday’s PowerShot SD450 Digital Camera never fell below $100.

Affiliate revenue sharing, real time chat, crowd shopping – sounds pretty 2.0, doesn’t it? Or perhaps it just sounds like fun. As I post this, the iPods are at $310, the forum is hopping and no one knows how many are left.

The company plans on holding the Daily Smack reverse auctions every Monday through Friday. If you find yourself in psychological shambles by the end of the week, here’s a link to the National Council on Problem Gambling. I’ll see you at Jellyfish though.

Update: It looks like the iPods sold out for right about $200, down from a starting price of $350. The forum was quite active towards the end, sociology and psychology students would have had a great time. See also Woot, a site that sells a single item for a low price every day (and was repeatedly derided in the Jellyfish Smack forum) and ZeeDive, a site with a different model we reviewed here.