Foreword: On the 28th of August Bidify made some additional changes to their compensation plan. In order to catalogue the changes, the original Bidify compensation plan shall be referred to as v1.0, the changes in this article reflect v2.0 and the new changes v3.0.
Following the SEC take down of Zeek Rewards for running a $600 million Ponzi scheme, Bidify immediately announced they were reducing the initial investment amount US-based members could make, from 25,000 Euros down to 5,000.
Largely seen as an irrelevant cosmetic change, which appears to be somewhat of a recurring theme over at Bidify, less than 24 hours later after this announcement the company announced they were shutting down Bidify altogether to remodel their compensation plan.
With Bidify being Zeek Rewards’ biggest competitor and roughly half way into their penny auction points 120 day run (after which a true test of their viability would have taken place), this was largely seen as confirmation that, as many suspected, a MLM penny auction pegged to a points based compensation plan was not sustainable without mostly paying newly invested affiliate money.
Zeek Rewards had been doing exactly this for nearly two years to the tune of 98% of the daily ROI paid out consisting of newly invested affiliate money.
In any case, shortly after taking Bidify offline to work on a new “more traditional” compensation plan for their affiliates, Bidify popped back online yesterday.
Read on for a review of the new Bidify compensation plan.
Whereas the old Bidify compensation plan focused on mostly affiliates purchasing bids and giving them away to increase their share in a profit pool that was undoubtedly mostly being funded by their fellow affiliates (as evidenced by the dramatic plunge in the daily ROI % paid out to Bidify affiliates immediately following the shutdown of Zeek Rewards), Bidify’s new compensation plan revolves around the sale of Bidsson penny auction bids to customers.
Qualifying for commissions
In order to qualify for commission payouts, Bidify affiliates must be generating a minimum of 25 Personal Volume (PV).
1 PV is equal to 1 Euro being spent and is defined within the Bidify compensation as including self purchase of bids by affiliates or their retail customers.
Residual commissions in Bidify are paid out using a unilevel commissions structure. A unilevel structure places an affiliate at the top with every recruited affiliate placed directly under them, forming that affiliate’s level 1.
Any new affiliates recruited by those level 1 affiliates count as level 2 and so on and so forth.
Using this unilevel structure, Bidify pay out commissions on the sale of bids down 8 levels. These commissions are paid out as a percentage of the Group Volume (GV) generated by the downline of an affiliate, separated into levels within their unilevel team.
Note that GV is defined within Bidify as bid sales by an affiliate’s downline (other affiliates) and the purchase of bids by retail customers belonging to their downline.
How many levels a Bidify affiliate is paid out on depends on what tier qualification they are currently at. There are five tier qualifications within Bidify and along with their requirements they are as follows:
- Tier 1 (be a “qualified” affiliate) – 10% on Level 1
- Tier 2 (qualified affiliate + 25 GV) – 10% on level 1 and 4% on levels 2 and 3
- Tier 3 (50 PV + 100 GV) – 10% on level 1 and 4% on levels 2 to 5
- Tier 4 (50 PV + 200 GV) – 10% on level 1 and 4% on levels 2 to 7
- Tier 5 (50 PV + 300 GV) – 10% on level 1 and 4% on levels 2 to 8
Frequent Sales Credit
Originally named the “Mandatory Account”, Bidify’s new Frequent Sales Credit is a bonus paid out at a rate of 25% of the cash commissions paid out to affiliates.
Bidify state that Frequent Sales Credit can be used to
- purchase Bidsson bid packages
- pay for won auctions
- pay Bidify monthly membership fees
- purchase cruise tickets
In addition to the residual commissions above, Bidify also offer their affiliates the chance to go on two 7-day boat cruises a year.
Each month the company tallies up their top 5 affiliate performers and gives them tickets for a free cabin.
The company states that if the same affiliates top the list who already have tickets for a cabin, the bonus will roll down to the next affiliates in line (performance wise) for that month.
What happened to existing Bidify affiliate’s old points?
With the old compoundable “Ponzi points” not fitting into Bidify’s new sales based compensation plan, Bidify have found themselves in the position of trying to provide some value on the money previously invested in the scheme by affiliates.
Capping affiliate points as they were prior to the scrapping on the points-based compensation plan, Bidify have announced a weekly payment every Monday from a pool of ”50% of the auction revenue” for the week prior.
How much of a share in this pool an affiliate earns each week is directly tied into how many bonus points they’d generated prior to Bidify scrapping the points-based compensation plan.
Mechanically this could still be seen as a payment mostly consisting of affiliate money (should there be more affiliate bid purchases than retail customer purchases in any given week), but being closed off to new members and with a lack of an option to re-invest earnings to increase point balances, I’m not too sure how this plays out legally.
From a practical sense as a new affiliate looking to join Bidify I might be weary of this compensation paid out to older affiliates draining the overall commissions pool.
Effectively every week company revenue disappears into a profit pool that is only made available to a select few group of affiliates. As a Bidify affiliate who joined after the compensation plan change, I wouldn’t be able help but observe that these are commissions paid out each week that I have no means to ever qualify for.
With the Ponzi points compensation plan gone and no need to encourage affiliates to invest in bids for a daily ROI, membership to Bidify is now just 25 Euros a month.
Along with the 25 PV affiliate qualification requirement, if an affiliate was to self-qualify for residual commissions they’d be looking at a minimum 50 Euros a month to participate.
Bidify’s new compensation plan is a massive departure from the Ponzi-esque points re-investment scheme they had running only days ago.
With it comes a strong refocus on the sale of bids and whereas before (putting the legalities of running a potential Ponzi scheme aside) they might have been able to get by on affiliates generating the vast majority of the volume paid out as a daily ROI to affiliates, now this is not the case.
Instead, the inherent value of the Bidsson bids themselves is being put to the test rather than the value of the points able to be generated by the purchase of them.
Being the second largest MLM penny auction under Zeek Rewards’ Zeekler auctions prior to their collapse, it goes without saying that anyone considering running a MLM penny auction (or already running one) is going to be watching Bidify and Bidsson to try to evaluate whether or not an MLM penny auction is viable without a Ponzi scheme attached to it to drive sales volume.
By and large the affiliates from various MLM penny auctions I’ve come into contact with have shown no inclination towards enthusiasm of penny auctions themselves so I really think those in Bidify are going to have to focus on attracting retail customers if they’re going to succeed in the business going forward.
One of the big problems I predict is going to be customer retention and from that the generation of a consistent (and reliable) income by affiliates. Penny auctions by nature entirely allow bidders to spend money and walk away with nothing (well, not quite nothing if you consider the experience of losing their money something in itself).
As such it’s entirely possible for someone to purchase Bidify’s one and only product line from the company’s affiliates (bids) and then have nothing to show for it.
How this will play out in the long-term of course remains to be seen but I’d strongly suggest any change in Bidify’s compensation over the next few weeks would be an indication that a MLM penny auction relying on the sale of bids to customers isn’t really viable.
Part of the problem here I suspect going forward will also be that those who initially joined Bidsson did so to participate in the passive nature of a Ponzi points re-investment scheme. With that gone they’ll no doubt pay the 25 Euro a month admin fee to see how much the weekly profit pool pays out, but if nobody pushing actual bid sales and thousands of points in the pool, this might dissolve quite quickly.
The first new revenue pool payment is due either this coming Monday or the next so it’ll be interesting to see what the dollar payout is per point generated under the previous compensation plan.
With August a month most MLM penny auction affiliates and company owners would most likely quickly wish to put behind them and forget about, we’ll be keeping an eye on how Bidify performs throughout September.
Any status reports from Bidify affiliates during this time are of course naturally welcome.