AwardsW Review: China tries MLM penny auctions
Despite a dubious looking business model and mountain of ongoing concerns and dramas engulfing MLM penny auction sites Zeek Rewards and Zeekler, one thing that can’t be denied is the schemes ability to attract members willing to pump money into it.
Something that obviously hasn’t gone unnoticed if you take a look at the recent penny auction MLM startups launched globally over the last few months.
With Bidify having just launched their competing penny auctions with a similar “revenue-sharing” compensation plan out of Seychelles, BidsBr tackling the Portugese speaking South American market and regulators around the world asleep at the wheel, today we look at the ongoing trend of emerging penny auction MLM companies with a Hong Kong based new startup, AwardsW.
Similar to the relationship between Zeek Rewards and Zeekler and Bidify and Bidsson, AwardsW functions as the MLM arm of penny auction site ‘YouBidWin’.
Apart from claiming that ‘Awardsw.com and Youbidwin.com are owned by Awards World Co. Ltd‘ with ‘headquarters located in Hong Kong’s commercial center‘, no further information is provided indicating who owns or runs either company.
Both company domains, ‘awardsw.com’ and ‘youbidwin.com’ were registered on the 7th December 2011 however their domain registration information is set to private.
Hong Kong does list an ‘Awards World Co. Limited’ as being a locally registered company (Chinese company name: 艾維華斯責任有限公司 and CR No. 1697776):
However no further information is provided. Both the AwardsW and YouBidWin websites are currently being hosted in the US.
As always, if a MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.
The AwardsW Product Line
Like all other penny auction MLM companies, AwardsW claim the bids sold through their penny auction site, YouBidWin, are the company’s product.
There appears to be only one bid type with YouBidWin, that being retail bids which both affiliates and customers can purchase. There is no information on either the AwardsW or YouBidWin website indicating the cost of these retail bids.
Additionally there’s also what appears to be a retail store offering on the AwardsW website but despite the company launching nearly 8 months ago, clicking on the link to the store results in an “under construction” message.
The AwardsW Compensation Plan
AwardsW use a profit share compensation model with the basic idea being that the money generated by the purchase of bids (either by company members or customers) is paid back out to members.
AwardsW claim to pay back 70% of the daily net profits generated by the sale of bids to company affiliates, with each affiliate’ share of the daily profit pool dependent on how many “points” they have.
Points are generated by affiliates when customers they generate purchase retail bids, or they give bids away to customer accounts that they themselves have purchased.
Bid expire every 90 days and the idea is that each day AwardsW members use some of the daily payout to reinvest back into the company in bid purchases. Thus over time their point balances increase and so too does their share of the daily profits paid out.
30% of all money paid out in the daily profit-share must be re-invested back into the company by affiliates via the purchase of more retail bids.
AwardsW also claim to pay out a 1-8% on the purchase price of goods bought through their online store by referred customers, however this store is currently not operational.
The affiliate sign up page for AwardsW makes mention of four affiliate membership options: Free Member, Manager, Senior Manager and Executive Manager.
No further information on any of these membership options is provided however. Nor is any information provided detailing any costs associated with joining AwardsW or any ongoing monthly financial requirements.
One of the more revealing aspects of all these penny auction MLM companies popping up around the world with near identical business models and compensation plans has been the extent they go to to mask the fact that the majority of money going into these companies, appears to be coming solely from company affiliates.
In the US compliance is big issue and as such companies ban the use of certain terminology by their affiliates, without really making any substantial changes to the general business idea itself.
That being that affiliates pump $x into these companies, earn a daily return, re-invest some of that money back into the company and over time increase their share of the money being pumped into the company by new and existing affiliates.
Customers purchasing bids does make up a small percentage of the equation, but by and large from what we’ve seen it appears to be negligible to non-existent. Why purchase bids when you have thousands of members wanting to give them away to you for free?
Not to mention the inflation this causes over at the penny auctions themselves (who wants to bid against a bunch of people who don’t consider the bids they have to hold any value?).
You could entertain the idea that customer purchased bids are treated separately to bids given away, but when you consider that affiliates earn points by creating customer accounts to purchase bids from – that idea quickly goes out the window.
Moreso when you consider that AwardsW (and other penny auctions) offer a cash payout on all their won auctions, meaning members are able to use their created customer accounts to try to recoup some of their costs by winning an auction or two. And if they don’t, doesn’t matter – they earn more than the initial cost of the bids back through the revenue-share scheme anyway.
As far as AwardsW go, they openly advertise their penny auction MLM scheme as an investment,
stating that they readily accept ‘investment from Asia and North America‘. With a business model identical to penny auctions with a presence in the US, you could just dismiss this and ramble on about how wildly “out of compliance” AwardsW is.
Or on the other hand, just accept that for all their ranting on about how they’re not just investment schemes hiding behind penny auctions, the fact of the matter is the revenue-share business model and compensation plans these companies utilise use investment principles, pays out daily returns, allow members to grow their investments via compounding of their daily earnings and is largely funded by participating members.
Credit to AwardsW for being and open and honest about what sort of business they’re running. Does that make the penny auction MLM revenue share business model and compensation plan any more sustainable in the long-term once members stop purchasing initial bids to give away with new money though?
No, it doesn’t.