Bids That Give Review: Charity and penny auctions?
There are so many terrible things that happen to children all over the world.
Right now a little boy is dying of hunger, a little girl just got sold by her mother and is being forced into life as a sex slave.
Right now children are being physically abused and then there’s so many children who are just left by themselves and there’s no one there to love or care for them.
I dunno why bad things happen to innocent little children but they do. But here’s what I do know, all of us can do something about it.
You see, that’s our number one purpose. This company was founded to be a true partnership between those children, the childrens charities it supports and its affiliates who make it all happen.
– Randy Jeffers, founder of BidsThatGive
No doubt we’ve all heard the emotional sales pitches of the various charities that attempt to solicit donations from us to put towards the various causes they represent.
Today we look at one MLM company who hope to use these same emotionally appealing sales pitches to get you to join and participate in their penny auction business:
Our company, BidsThatGive – where every bid helps a kid, is a “global business model” designed to help underprivileged children with every bid that is purchased or given away.
Read on for a full review of the BidsThatGive MLM opportunity.
BidsThatGive are a MLM penny auction company. Founded by Randy Jeffers (photo right), BidsThatGive appear to be operating out of the state of Nevada in the US, however the company website (bidsthatgive.com) currently has a private domain registration.
Whereas BidsThatGive appears to be the auction side of the business, the company also offers an attached MLM business opportunity which they call a “Private Sharing Profit Company”.
The domain ‘privatesharingprofitcompany.com’ was just recently registered on July 1st 2012 and shares the same private domain registration as bidsthatgive.com but as of yet isn’t active.
Meanwhile Randy Jeffers has a colorful MLM history spanning several company launches:
- Destiny Telecom (launched in the 1990s and shut down in 1997 after regulators and authorities got involved between 1996 and 1998)
- WOW Mobile (founded in 2010 and bankrupted in 2010)
- Liberty International (founded in 1999, also bankrupted in 2010)
Following the bankruptcy of Liberty International and WOW Mobile, Jeffers launched the Liberty Freedom Network which still appears to be doing business today (marketing restaurant coupons).
The BidsThatGive Compensation Plan
Like all the other penny auction based MLM companies popping up all over the place, the Bids That Give compensation plan focuses on the purchase of bids by retail customers and Bids That Give affiliates themselves.
The bids available for use on the BidsThatGive penny auction are retail bids, wholesale bids and subscription bids.
Retail bids cost 65 cents each and are available for purchase by BidsThatGive retail customers. The purchase of retail bids by customers attracts a 20% commission payable to the BidsThatGive affiliate who referred the customer to the company.
Wholesale bids are only purchasable by BidsThatGive members, or “Bid Ambassadors” as the company refers to them. Bid Ambassadors purchase wholesale bids for 50 cents each and give these away to customers they have introduced to the penny auctions.
For each wholesale bid purchased by a Bid Ambassador, BidsThatGive award him or her 1 point in the BidsThatGive “Daily Profit-Sharing Pool”.
This pool is made of up to 50% of the company’s profit (bid purchases, auction winner fees and Bid Ambassador membership fees) and is calculated daily. The more points a Bid Ambassador has, the larger their share of the profit pool.
Payouts via participation in the Daily Profit-Sharing Pool are capped at $3,000 USD a day Monday to Friday and $5000 USD on Saturday and Sundays. A $20,000 global cap also exists, but excludes wholesale bid commissions (commissions on downline wholesale bid purchases).
Qualifiers for earning in the daily profit pool are the acquisition of two retail customers (to dump wholesale bids on), the purchase of at least 10 wholesale bids and publication of a BidsThatGive advertisement anywhere on the internet, providing a link back to BidsThatGive for daily verification.
Subscription bids are bids given to Bid Ambassadors when they pay their membership fee each month. They can be used only on “Ambassador Auctions” and don’t generate any points in the Daily Profit-Sharing Pool if they are given away to customers.
Wholesale Bid Commissions
Wholesale bid commissions are paid out on the purchase of wholesale bids by Bid Ambassadors in the downline of BidsThatGive members.
The commission amount paid out is dependent on the membership level of the qualifying Bid Ambassador and is paid out on three levels (Bid Ambassadors directly recruited are level 1, Ambassadors level 1 recruit are your level 2 and Ambassadors your level 2 recruit are your level 3).
- Contributor – 5% on levels 1 and 2 and 2.5% purchases
- Guardian – 7% on levels 1 and 2 and 3.5% on level 3 purchases
- Benefactor – 10% on levels 1 and 2 and 5% level 3 purchases
- Ambassador – 12% on levels 1 and 2 and 6% on level 3 purchases
Subscription Bonus Pools
The BidsThatGive Subscription Bonus Pools are made up of 50% of the monthly membership fees paid monthly by Bid Ambassadors.
Shares in the Subscription Bonus Pools are determined by a Bid Ambassador’s downline’s subscription volume. That is to say the more a Bid Ambassador’s downline spend in membership fees each month, the larger the Bid Ambassador’s share in the Subscription Bonus Pools will be.
Levels in the Subscription Pools use a unilevel compensation structure, meaning that members you directly refer are your level 1, members they refer are your level 2 and so on and so forth.
The qualifications for the various BidsThatGive Subscription Bonus Pools available to Bid Ambassadors are as follows (note that Group Volume (GV) counts membership fees paid, personal wholesale bid purchases referred customer retail bid sales by your downline):
- Community Pool (made up of 15% of monthly subscription fees paid) – recruit 2 Bid Ambassadors with pool share determined by the membership fee volume of your first 2 levels
- Mentor Pool – (made up of 5% of monthly subscription fees paid) – recruit at least 5 Bid Ambassadors who spend at least $100 a month and have a downline generating $2,500 in bid sales and paid membership fees in total
- Visionary Pool (made up of 5% of monthly subscription fees paid) – have at least 4 Mentor Pool qualified Bid Ambassadors in your downline, also pays out a matching bonus on Visionary and “VIP Pool 1” Pool earnings generated by your downline
- VIP Pool 1 (made up of 5% of monthly subscription fees paid) – have a downline generating 15,000 monthly GV for 1 share, 30,000 GV for two shares and 45,000 GV for three shares
- VIP Pool II (made up of 5% of monthly subscription fees paid) – have a downline generating 25,000 monthly GV for 2 shares, 50,000 GV for 3 shares and 75,000 GV for 4 shares, also qualifying for VIP Pool II increases matching bonus to include VIP Pool II earnings by your downline
- VIP Pool III (made up of 5% of monthly subscription fees paid) – have a downline generating 35,000 monthly GV for 2 shares, 70,000 GV for 3 shares and 105,000 GV for 4 shares, also increases matching bonus to include VIP Pool III earnings by your downline
- VIP Pool IV (made up of 5% of monthly subscription fees paid) – have a downline generating 50,000 monthly GV for 2 shares, 100,000 GV for 3 shares and 150,000 for 4 shares, also increases matching bonus to include VIP Pool IV earnings by your downline
- VIP Pool V (made up of 5% of monthly subscription fees paid) – have a downline generating 75,000 monthly GV for 2 shares, 150,000 GV for 3 shares and 225,000 GV for 4 shares, also increases matching bonus to include VIP Pool V earnings by your downline
- VIP Pool VI (made up of 5% of monthly subscription fees paid) – have a downline generating 100,000 monthly GV for 2 shares, 200,000 GV for 3 shares and 300,000 GV for 4 shares, also increases matching bonus to include VIP Pool VI earnings by your downline
- VIP Pool VII (made up of 5% of monthly subscription fees paid) – have a downline generating 250,000 monthly GV for 2 shares, 500,000 GV for 3 shares and 750,000 GV for 4 shares, also increases matching bonus to include VIP Pool VII earnings by your downline
- Presidential Elite Ambassador Bonus – have a downline generating at least 1.5 million GV a month, first million GV qualifies you for one share with each additional million GV after that another share, also includes a $50,000 a month bonus
Presidential Ambassador Bonuses
Once a BidsThatGive Bid Ambassador has a downline generating at least 750,000 GV a month or earn $100,000 themselves a month, they qualify for what is called the Presidential Ambassador Bonus. Presidential Ambassadors are subject to a $250,000 a month hard cap on earnings.
The Presidential Ambassador Bonus allows the selection of either a Porsche Carrera or Mercedes-Benz CL550 car, a $10,000 Neiman Marcus shopping spree and $100,000 “lifestyle bonus” paid out quarterly.
Additionally, Presidential Ambassadors are also qualified to open up a new Bid Ambassador position directly above themselves (meaning they effectively recruit themselves).
This second Bid Ambassador position has no monthly income limit and is able to earn all bonuses and participate in the Profit-Sharing Pool scheme in the same manner as a new Bid Ambassador is.
Upon this second Bid Ambassador position qualifying as a Presidential Ambassador for a yearly quarter, a choice of either a Bentley or Lamborghini car or yacht (up to $225,000 in value) is made available as well as a third Bid Ambassador position (placed above the second Bid Ambassador position).
As with the second Bid Ambassador position, this third position has no income limit and starts again as a new Bid Ambassador would. Upon this third Bid Ambassador position qualifying as a Presidential Ambassador, an orphanage is built in the Bid Ambassadors name (up to $250,000 of company money is spent on an individual orphanage) and a fourth Bid Ambassador position is made available.
When the fourth Bid Ambassador position achieves Presidential Ambassador qualification and maintains it for a yearly quarter, a “church, school or hospital is built in the name of the qualifying Bid Ambassador (again, up to $250,000 of company money is spent on this).
In addition to the penny auctions, each Bid Ambassador is also given a BidsThatGive retail store, stocked with items by the company.
Bid Ambassador’s earn commissions when they sell items through their bid stores, calculated as the difference between the wholesale price and retail price the items are purchased at.
Note that retail stores are only offered at the “Benefactor” and “Ambassador” Bid Ambassador membership levels ($100 and $250 a month respectively).
Car Payment Program
BidsThatGive’s Car Payment Program pays out $1,200 towards a new or used car (up to 3 years old) to Bid Ambassador’s who accumulate 60,000 points in the Daily Profit-Sharing Pool scheme.
Bid Ambassadors that qualify for the Car Payment Program are given the title of “Mentor” and must maintain Mentor rank for four weeks before Car Payment Program payments begin.
Joining Bids That Give
Membership as a Bid Ambassador in BidsThatGive has five different price points:
- Contributor – $10 a month with 20 subscription bids, $1000 capped maximum investment in wholesale bids
- Guardian – $50 a month with 100 subscription bids, $5000 capped maximum investment in wholesale bids
- Benefactor – $100 a month with 200 subscription bids, $10,000 capped maximum investment in wholesale bids
- Ambassador – $250 a month with 500 subscription bids, $25,000 capped maximum investment in wholesale bids
Note that capped maximum investments only apple to external money a Bid Ambassador brings to the company. Using Daily Profit-Sharing Pool payouts to re-invest back into the company via wholesale bid purchases (to increase Daily Profit-Sharing Pool point balances) does not count towards this limit.
There is also a free Bid Ambassador membership level available, however free Bid Ambassadors are unable to participate in the Daily Profit-Sharing Pool.
Perhaps something to do with the stigma that often accompanies the MLM industry and the companies that populate it, for some strange reason BidsThatGive proclaim in their marketing material that they are “NOT MLM!”:
Curiously BidsThatGive make this claim despite the fact that they offer referral purchase commissions on multiple levels, contain MLM style membership ranks and qualifiers (group volume and personal volume) and utilise a MLM unilevel compensation structure to calculate qualification on all of their bonuses.
Yeah, and this isn’t a review on BidsThatGive so much as it’s just a bunch of words on a computer screen. Sure thing guys.
The ‘we’re not MLM despite obviously being a MLM” peculiarity aside, compensation plan there are some new additions to the MLM + penny auction niche, but still many of the red flags that are glaringly apparent in rival companies and their compensation plans.
For starters, it’s difficult to look at the Daily Profit-Sharing Pool scheme as anything other than an investment by company members that pays out a daily return.
The only people able to purchase wholesale bids are BidsThatGive members so 100% of the purchasing here is internal consumption. That in itself isn’t a red flag when you consider the retail bids available but it is when you consider the Daily Profit Sharing Pool mechanics.
Effectively BidsThatGive Bid Ambassadors are rewarded daily directly based on the amount of money they themselves invest into the company.
You can call this investment “the purchase of wholesale bids” or whatever else you want but it still constitutes money being transferred directly by company members to the company with the expectation of an eventual return that exceeds, dollar for dollar, the initial amount invested.
Throw in the relationship between how much money is thrown in determining how much of a share in the daily returns offered, and that’s a pretty big red flag right there.
Remember that re-investment in more bids is naturally encouraged to grow point balances and thus increase overall daily profit shares, so effectively it’s not just the initial investment made that determines profit shares, but rather an ongoing contribution via members to increase this balance.
I couldn’t find any mention of point retirement so I’m not sure if there is one, either way though whether points retire or not, members still need to increase points.
With point retirement the reason so is obvious, to replace the bids lost and grow the overall point balance. Without point retirement the need to continue to grow point balances becomes a competitive issue. If one members point balance stagnates, their daily profit share will effectively decrease as other member’s total point balances increase.
“X” points today won’t yield the same daily return as “X” points in a week time when you factor the diminishing value of each point due to overall continued generation of new points in the pool via new and continued investment in wholesale bids by new and existing Bid Ambassadors.
Thus I’m also not entirely sure what’s up with the whole misleading “you get paid to advertise” marketing nonsense either. Quite clearly without an initial investment and ongoing investment in points, you don’t get paid via the Daily Profit-Sharing Pool, whether you publish a daily ad or not.
Given that wholesale bid sales by members are pumped into the Daily Profit-Sharing Pool, quite clearly the advertising for retail customers becomes a token gesture with Bid Ambassador’s far more likely to seek out new investors to pump money into the scheme (remember, they get a referral commission paid out on three levels when their downline purchase wholesale bids and simultaneously invest in the Daily Profit-Share Pool).
The BidsThatGive income caps are interesting in that I believe it’s the first we’ve seen in the MLM penny auction niche however it’s far from a viable sustainability solution.
As I see it the earnings cap only serves to cap passive investors who are attracted to BidsThatGive. Those that recruit new Bid Ambassadors and encourage them to invest (working BidsThatGive like a traditional MLM company), effectively remove a cap on their earnings after hitting the Presidential Bid Ambassador membership rank and generating a new Bid Ambassador position that is uncapped earnings wise.
That said passive investors are still able to bring in $20,000 a week which still equates to 1 million a year in earnings (minus re-investment in wholesale bids).
Note that the term “passive investment” is used as I imagine it won’t be long before lead generators start marketing the sale of “customers” to BidsThatGive members the same as they do for the other MLM penny auction companies.
How many customers a Bid Ambassador needs as they grow their point balances and effective daily ROI I’m not sure as I didn’t see any limit on dumping wholesale bids on customers in the compensation material I cited. In hindsight I suppose this is because Bid Ambassadors are credited with points for merely purchasing wholesale bids, rather than giving them away and/or having customers use the bids.
As for the whole children’s charity angle, that appears to be more of a marketing gimmick than anything else. There’s nothing stopping anyone in another penny auction MLM company from donating to charity and I see its inclusion as serving only one real purpose, that being to allow members to use the predictable ‘but what about the children we help?’ strawman defence to address any criticism directed at BidsThatGive and its business model.
I suspect the same might also be used as a pre-emptive deterrent for any regulators that might investigate the company (a very real possibility that might easily be hastened given Randy Jeffer’s MLM history).
“Government attacks children’s charity donators” looks much better than “Goverment shuts down unsustainable business model largely funded by members that paid out ridiculously unsustainable daily returns”.
All in all I think BidsThatGive is going to struggle to attract actual retail investors and instead will just wind up paying daily returns largely funded by membership fees and wholesale bid purchases by members.
This assumption is strongly supported by the fact that BidsThatGive’s bonus pools are funded by 50% of monthly membership fees paid. Surely if the company had any confidence in the retail side of the business they’d be funding these pools with profits generated by retail customers purchasing retail bids?
Then of course there’s the membership options which pretty much equate to the more membership money you pay each month the more BidsThatGive will let you invest into the scheme and earn via daily ROI.
These points alone pretty much tell you where BidsThatGive are planning to acquire most of their revenue from and sadly doesn’t look well for the long-term viability of the company – legally or otherwise.