BidXcel Review: “Profit-sharing” done right?
When BidXcel first popped up on my radar not much information was out about the upcoming penny auction opportunity.
From information available at the time though, it seemed as BidXcel was going to be a continuation/relaunch of the failed outdoor niche orientated ‘Win The Hunt’ penny auction, but this time with an attached MLM compensation plan.
That was a few weeks ago now and since then Win The Hunt has been completely shut down and BidXcel compensation plan details have been released. Read on for a full review of the BidXcel MLM opportunity.
Win the Hunt was a penny auction launched in July 2011 by Andrew Bracken and Dave Hofer.
In late 2011 Bracken announced that Win The Hunt would be ‘going into 2012 with ‘a solid customer base of over 100,000 registered members’. Despite this, when I visited the site a few weeks ago most of the penny auctions available were expiring with no bids.
Sometime between then and today, the Win The Hunt auctions have been pulled offline altogether.
BidXcel appears to be built on the foundation of Win The Hunt combining the penny auction side of things (with a much broader niche offering auction wise) and a MLM compensation plan.
Andrew Bracken is still on board in an executive management role and has been named as the CEO of BidXcel. David Hofer has also been named as a co-founder of the company but whether or not he has an executive management position in BidXcel was unclear at the time of publication.
As for who owns BidXcel, the company is keeping that secret stating only that
Ownership in the two companies is privately held.
Operations wise, it appears BidXcel are operating out of the US state of Colarado.
The BidXcel Product Line
Like all MLM penny auctions, BidXcel’s product is penny auction bids. These bids are purchased through the company and can then be used to bid for items on BidXcel’s penny auction website, XcelBids.
XcelBids are sold in “bid packs” as follows:
- 20 bids – $40
- 50 bids – $100
- 225 bids – $200
- 555 – $500
- 1550 – $1000
The XcelBids domain (xcelbids.com) was registered on the 3rd August 2012 but is currently offline.
The BidXcel Compensation Plan
Through their compensaton plan, BidXcel offer their members retail and profit pool commissions, along with matrix commissions and a series of matching and incentive based bonuses.
Qualifying Volume and Group Volume
The BidXcel compensation plan revolves around sales volume that is broken up into two main categories, Qualifying Volume (QV) and Group Volume (GV).
Within the BidXcel compensation plan structure, QV is defined as
retail Bid purchases (made) by you (BidXcel affiliates) or your personally referred retail customers
and GV as
retail bid purchases (made) by personally referred affiliates or their personally referred retail customers.
In order to qualify for commissions in the BidXcel compensation plan, affiliates must have two active retail customers and be generating a minimum of 40 QV a month.
Additionally BidXcel affiliates must also perform a “daily business promotion” in order to qualify for commissions. BidXcel as of yet haven’t specified what this promotion is, other than stating that qualification includes
a daily check-in with the promotional task you completed that day.
No further information is provided.
BidXcel Membership Ranks
Certain commissions offered through the BidXcel compensation plan are determined by an affiliates membership rank.
There are eleven membership ranks in total in the BidXcel compensation plan and along with their respective qualifications, are as follows:
- Certified Affiliate – 40 QV and 2 active customers
- Supervisor – 40 QV, 120 GV and 2 active customers
- Manager – 100 QV, 300 GV and 2 active customers
- Director – 100 QV, 400 GV and 2 active customers
- Executive – 100 QV, 500 GV and 2 active customers
- Senior Executive – 100 QV, 600 GV and 2 active customers
- Bronze Executive – 100 QV, 600 GV (of which one recruited affiliate must be generating at least 300 GV towards) and 2 active customers
- Silver Executive – 100 QV, 600 GV (of which two recruited affiliates must each be generating at least 300 GV towards) and 2 active customers
- Gold Executive – 100 QV, 600 GV (of which three recruited affiliates must each be generating at least 300 GV toward) and 2 active customers
- Platinum Executive – 100 QV, 800 GV (of which four recruited affiliates must each be generating at least 300 GV towards) and 2 active customers
- Diamond Executive – (1oo QV, 1000 GV (of which five recruited affiliates must each be generating 300 GV towards) and 2 active customers
Note that from Gold Executive onwards the amount of GV required by recruited affiliates exceeds the total required in order to maintain that rank. These figures are taken directly from the BidXcel compensation plan and I’m not sure why there’s an excess in the sum total GV recruited affiliates are required to genearate vs. the total GV required.
BidXcel affiliates are paid a 20% commission on the retail purchase of bids made by either their genuine retail customers or other affiliates they have recruited.
Recruited Affiliate Bid Purchase Commissions
In addition to the “retail” commissions affiliates make when their recruited affiliates buy bids, BidXcel also offer an additional percentage commission offered down four levels.
Affiliates you personally recruit form your level 1, affiliates they recruit your level 2 and so on and so forth.
Using this structure, BidXcel pay out the following Affiliate Bid Purchase commissions:
- Level 1 – 5% of the bid purchase amount
- Level 2 – 4% of the bid purchase amount
- Levels 3 and 4 – 3% of the bid purchase amount
The Xcelerator Bonus Pool
BidXcel claim to be a “customer acquisition program” for XcelBids with the Xcelerator Bonus Pool being designed to reward affiliates ‘for (their) customer acquisition activities‘.
BidXcel claim the Xcelerator Bonus Pool is made up
up to 50% of the retail customers acquired using bids on the XcelBids E-Commerce site every day.
Given that retail customers themselves aren’t revenue, I can only assume the above quote, taken directly from the BidXcel compensation plan, is a typo and they are actually referring to revenue generated by the use of bids in the XcelBids auction.
The 50% of revenue generated by the use of bids (note that revenue is actually generated upon the purchase of bids, not their use however the use of the bids is a qualifying factor for that revenue to enter the Xcelerator Bonus Pool), is split into 4 bonus pools.
Affiliates are able to participate in any one bonus pool, primarily depending on how many bids they, their recruited affiliates and customers have used in the XcelBids penny auctions.
- Pool 1 (15% share) – 100 to 999 XcelBids used in the auctions and must also have 2 retail customers
- Pool 2 (21% share) – 1000 to 2999 XcelBids used in the auctions and must also have 3 retail customers
- Pool 3 (28% share) – 3000 to 4999 XcelBids used in the auctions and must also have 4 retail customers
- Pool 4 (36% share) – 5000+ XcelBids used in the auctions and must also have 5+ retail customers
Note that for each 1000 used bids counted in the Xcelerator Bonus Pool, an affiliate must have 1 additional active customer.
Matching Xcelerator Bonus Pool Bonuses
BidXcel pay out a matching bonus on the earnings of recruited affiliates in the Xcelerator Bonus Pool, paid down up to four levels:
- Level 1 – 5%
- Level 2 – 4%
- Levels 3 and 4 – 3%
Matrix commissions are paid out in BidXcel using a 3×9 matrix. With you at the top, a 3×9 matrix has three member positions directly under you forming your level 1. In turn these three positions branch out into another three positions each (your level 2) and so on and so forth down 9 levels in total.
The first few levels of a 3×9 matrix look something like this:
Using this structure, commissions via the BidXcel matrix appear to be tied into the purchase of “ePacks”. There are two monthly ePack purchases made available to affiliates:
- Basic ePack – $40 a month with 20 XcelBids
- Xtra ePack – $100 a month with 50 XcelBids
The company states that the purchase of an ePack is “optional”, however they also mention they are “qualifiers” so I believe that a monthly ePack purchase is required in order for affiliates to qualify for matrix commission payouts.
BidXcel claim that ‘over 50% (of the monthly ePack revenue) is paid out to qualified affiliates and spread throughout each level of their matrix‘, with how many levels of their matrix affiliates are paid out on determined by their membership level:
- Supervisor – 4 levels
- Manager – 6 levels
- Director – 7 levels
- Executive – 8 levels
- Senior Executive or higher – 9 levels
At the Platinum and Diamond Executive levels there is also something about “matrix re-entry” mentioned. I believe this involves the creation of a new matrix above an affiliates primary matrix position in order to effectively extend the size of their 3×9 matrix.
Matrix Generation Bonus
Paid out as a percentage matching bonus, the Matrix Generation Bonus is paid out on the matrix earnings of recruited affiliates in your downline.
A generation is defined as the recruitment of a new affiliate. Affiliates personally recruited are the first generation, affiliates they recruit are the second generation and so on and so forth.
How many generations deep you are paid out on depends on an affiliate’s membership rank:
- Bronze Executive – 10% on generation 1
- Silver Executive – 10% on generations 1 and 2
- Gold Executive – 10% on generations 1 to 3
- Platinum Executive – 10% on generations 1 to 4
- Diamond Executive – 10% on generations 1 to 5
Lifestyle and Car Bonuses
No specifics are provided on either the BidXcel Lifestyle and Car bonuses, other than affiliates are only able to choose one of the two.
Membership at BidXcel costs $49.95. This appears to be a once-off fee.
Monthly matrix commissions are tied into the purchase of either a $40 or $100 ePack, so should an affiliate wish to earn matrix commissions, the required purchase of ePacks could be seen as an additional monthly expense.
BidXcel define themselves as
the global marketing arm for XcelBids, an E-Commerce solutions site available to a worldwide market.
BidXcel is a customer acquisition program and you are rewarded for your customer acquisition efforts.
With e-commerce being defined as nothing more than
the (electronic) buying and selling of products or services
this appears to be little more than an attempt to perhaps differentiate themselves from being seen as “just another MLM penny auction”, or distance themselves linguistically from the MLM penny auction niche altogether.
Regardless, compensation plan wise the biggest red flag I see with BidXcel is the inclusion of affiliate bid purchases as qualifying for retail sales and thus Group Volume.
The counter to this would naturally be that 2 active customers are required to earn commissions in BidXcel, however BidXcel only define an active customer as someone who
is using bids on the XcelBids
ECommercepenny auction site.
No minimum requirement as to how many bids must be used is mentioned. That said, with no option to “give bids away”, it’s worth noting that the bids used by customers must be also purchased by them.
This neatly eliminates much of the internal consumption problems that have plagued MLM penny auctions in the past, however the legitimacy of this model then shifts onto the verification of the customers affiliates sign up.
With customers having to purchase bids in order to use them, one would hope at the very minimum BidXcel would be conducting in-house verification on the customers their affiliates are signing up.
Anything less than a thorough check to make sure the customer in question is an actual person and fully aware of what they are signing up for, will leave BidXcel wide open to the problem of fake customers. This has been one of the central problems thus far in the MLM penny auction niche when companies have required affiliates find customers in order to qualify for commissions and bonuses.
Getting back to the counting of affiliate bid purchases towards Group Volume however, at first glance it might seem viable for affiliates to sign up customers, buy whatever the minimum amount of bids that need to be used per customer account and use them in the auctions in order to qualify for the Xcelerator Bonus Pool (spending the rest of their QV requirements themselves), however in the long-term this isn’t at all attractive.
New customers are constantly required with each 1000 used bids that count in the Xcelerator Bonus Pool, and over time the liability of having to buy bids through ever-increasing customer accounts will inevitably become a vastly daunting task. And seemingly not worth the returns thus derived from the Xcelerator Bonus Pool.
As I see it, thorough verification of the customers being signed up by affiliates and the requirement for customers to purchase bids and use them to qualify as “active” is key to the legitimacy of BidXcel.
And this of course then brings us to the issue of customers and MLM penny auctions.
Thus far it’s yet to be proven whether or not a MLM penny auction can attract enough retail customers in the long term to remain viable.
The biggest MLM penny auction to date, Zeek Rewards, was recently shut down for being a Ponzi scheme by the SEC and through those actions, it was revealed that 0.25% of the bids given away by over a million affiliates were actually used by customers.
With those bids being free, it remains to be seen whether or not that percentage can be raised when customers are required to purchase bids.
Looking at the Bid Packs available, depending on whether the minimum amount of bids required to be used is above or below 20, XcelBid customers could be looking at a minimum $40 a month spend on a bid pack just to qualify as active (for which they have no incentive for, as it’s only the affiliate who introduced them to BidXcel who gains anything by a customer qualifying as active).
I suppose a lot of that depends on the quality of BidXcel’s Xcelbids auction platform, but with the penny auctions as yet still to launch it’s impossible to make an assessment of them yet.
One only needs to look at the failure of the Win the Hunt penny auctions Bracken and David Hofer previously launched due to a lack of retail customers to see how important these points are.
Of course Win the Hunt didn’t have an MLM component attached to it, but for a real world MLM penny auction example one need only look as far as Zeek Rewards, a million plus affiliate strong company recently shut down for being a Ponzi scheme.
Looking at the customer statistics of Zeek Rewards, I personally don’t think there are enough customers to go around in the niche to sustain a MLM penny auction (let alone the multitude of them popping up), but compensation plan wise if BidXcel are thoroughly verifying their customers and requiring them to use bids they themselves have to purchase, then I can’t fault them for that.
I will say though that the matrix stuff seems to be out of place. Motivation wise I can’t see it as anything more than an optional incentive to make affiliates buy bids to generate bid traffic through XcelBids, simultaneously rewarding affiliates by paying out commissions on fellow affiliate’s bid purchases.
Having followed MLM penny auctions for nearly a year now, my experience has been that affiliates of MLM penny auctions typically have no desire to use them themselves as customers (read: spend their own money on bids and use them themselves).
With the dust still settling on the Zeek Rewards Ponzi shutdown, I’d be cautious about entering any MLM penny auction at the moment. With so many in prelaunch at the moment I’d be strongly thinking about waiting till some of them launch and then assessing the MLM penny auction playing field after a few months has passed and you’ve got some idea of the operational direction of the company in question.
On the surface BidXcel looks like a step in the right direction but alot of that is going to depend on their verification of customers and the quality of their yet-to-launch XcelBids penny auction.
Track record wise the MLM penny auction niche hasn’t got off to a reputable start so it might be best to adopt a patient wait-and-see approach here.
Update 13th March 2013 – In a rather abrupt notice published on their website, BidXcel have announced that they have shut down effective as of March 2013.
Oz, next to last paragraph, that should be “quality”, not “qualify of their yet-to-launch”.
Whoops, thanks for that.
Just another matrix scheme. I checked thier web site, a nice little power point presentation. Listened in on a conference call, about twenty pound of b.s. stuffed in a ten pound bag. Nothing of substance to this company.
They started out with the “join for free” tease, turned it into a $49.00 sign up fee, and added the usual “qualifiers”. If these scammers, err, business people put half as much effort into real work as they put into these “programs” they likely would have more money and fewer indictments.
After initially putting my big toe into this after a very persistent and charismatic little person attempted to recruit me, I have parted ways and have no intention of going back to try it full body immersion, unless and until they have been in business for , like, 17 years.
I stand a good chance of either being dead or senile by that time, so …. maybe I will be better than ever who knows.
But I went and checked out QuiBids (sp?) the other day, and they seem to be rocking right along with their retail only penny auction. It looks like they may have figured out how to get and keep paying customers.
First off it’s unfortunate that a blog can be posted about an organization without a credible source or quantifiable data. As a long time customer of Win The Hunt I have personally spoke with the owners and believe they are gentlemen with utmost integrity.
To say that Win The Hunt failed would be an inaccurate statement. They have actually been very successful operating the site since day one. As the result of an extensive marketing initiative they are re-branding the company to ensure it has an international presence. That would be the reason for leaving the niche marketing they were in.
It’s also unfortunate that the person who wrote this blog failed to recognize their extensive background in corporate fortune 500 companies and the value that brings to their new company.
If anyone can build a long term organization it would be these guys. They have the knowledge and experience to really deliver what many fail to do.
You also state how they are a penny auction company, but what you have once again failed to recognize is everything else they will bring to the table shortly after launch.
I have spoke with them extensively about this. In 1 year they say penny auctions will be less than a 1/4 of their business. How does that not make them only a penny auction company!
Again, it’s truly unfortunate opinions are formed where no credibility or quantifiable data reside. Miss the boat on this company and in a year you’ll wish you hadn’t.
So you’re stating the BidXcel website is neither quanitifiable or reliable? Wish they’d have mentioned that on the company website.
When I visited Win the Hunt a few weeks back (over a month ago now I guess) it was dead. Most of the auctions were timing down with no bidders. I’d say that pretty much fits the definition of “failed” as far as penny auctions go.
I’m also pretty confident in saying that it’s a reflection they didn’t meet their 100,000 members projections going into 2012 either.
Yeah, what I said – Win the Hunt failed so they’re relaunching it with an attached MLM compensation plan.
marketing spinpotarto, I say what actually happened minus the spinpotato.
Feel free to provide any specifics. BidXcel themselves failed to on their website so it’s obviously not that important.
Future plans are irrelevant when analysing the business model that exists today. Y’know, the one they’re actually operating with.
Because “we say we’re going to blahblahblah…” does not negate or suspend the reality of what they are today.
Well gee, that’s unfortunately original. Where have I heard that before?
So you want Oz to evaluate something that doesn’t exist (yet)?
I think it’s time to dust off the bad argument generator. I’ll have to revise it again. This guy did get a couple of new variations. 😀
I’ve followed BidXcel from the start. My experience with MLM launches is that they are generally backed by a person with limited corporate experience and are either strong on the business side of the house or the technical side of the house but rarely both.
These guys have assembled a team that is powerful on both sides of the house along with the sales and marketing sides. They are definitely worth watching.
“With great power comes great responsibility.” They do bear watching, indeed, after Zeek proved that the genre can be abused and used to disguise fraud.
Let’s hope they do put those years of experience to good use.
Smart people will do exactly that – from a distance.
HYIP ponzi players, on the other hand, will do what HYIP ponzi players do.
Credible source? The company’s own website will probably be accepted by most people as “credible”. And we don’t have any information telling us that it isn’t.
I don’t think their personal character and integrity was an issue at all in the review? And it will probably send misleading signals if we’re starting to focus on it now?
But Oz can probably add something about it in a followup or an update: “When it comes to whether or not the owners are gentlemen with utmost integrity, at least ONE person has confirmed that he believes they are”. 🙂
My personal opinion is that statements like that should be avoided in a blog like this one.
They will have to release it first before anyone can review it? Again, it would only have sent misleading signals if he had included PLANNED changes to the business model in the review.
Currently it looks like their product line is bidpacks, but with no auctions where you can use those bids. Most people will probably understand they’re in a temporarily stage by that information alone.
They have pulled the plug on the Win the Hunt penny auction, returned to a prelaunch stage where XcelBids hasn’t launched yet, and are about to add other products or services to their product line.
We don’t promote companies, so the information here will only reflect their current status and their history, the factual information available when a review is written.
I have been told that these guys are attempting to do ZeekRewards correctly meaning legally and upright good for all Etc… and they are having a corporate meeting soon and are bringing yet more “Qualified” big guns to the table.
I was in Zeek and lost $12,000 and I was asked to give a friend of mine who is flying out to Colorado to meet with these guys, any questions.
So being that you are obviously way above me in understanding of all this stuff, would you be so kind as to give me a list of questions that is prioritized?
Question 1: How do they plan to verify customers?
Question 2: What is the daily check in promotion task?
Question 3: Why have a matrix at all paying commissions on affiliate bid purchases if you’re focusing on the retail side of the business?
Question 4: Who is their compliance lawyer to ensure CORPORATE is complying with all laws
Question 5: How many auctions do they really plan to do daily (which would let you guess how many bids can be used up, and thus, divide by number of affiliates, would tell you how much can you expect to sell, and how much “profit” you get)
Zeek’s failure wasn’t related to the lack of qualified lawyers, but because of the lack of normal business understanding.
Zeek had several major problems:
* lack of customerss, too many affiliates
* the matrix part of the compensation plan became indirectly a chain recruiting scheme
* the profit sharing became a Ponzi scheme
* several scams inside the scam, e.g. third parties selling fake customers
The revenue needs to derive primarily from external customers, clearly separated from the affiliates. “Primarily” means at least 50%, but the business model can be questionable even with other ratios. A lawyer can’t replace business skills in that part.
WHERE the revenue derives from is important. A business model where affiliates are paid primarily from other affiliates joining the scheme or from other affiliates’ “self consumption” isn’t much of an income opportunity for the affiliates. A business model like that isn’t sustainable.
Profit sharing is probably legal if the profit derives from work rather than investment, REAL work and not some meaningless work to make it look legal. A lawyer can’t replace business skills in that part.
If their plan is to lawyer-up to become legal, they have probably already failed. If they can’t find the right solutions within their own business skills, then they should probably drop the whole project.
“Win the Hunt” failed. If they want to run an affiliate-based penny auction they should probably focus on business aspects rather than laws.
They will first need to find out how to make a penny auction become profitable without the need for affiliates supporting it through self consumption, and then they can start to add affiliates — not the other way around.
Great questions. They all have been answered by their CEO. it looks like you have not contacted them, why not? They have been available and answered all of what has been written here.
Maybe it is better for this site to continue to make assumptions rather then to talk to someone and get the answers?
Yet, hinting that you know the answers, you failed to address or answer any of them.
Because it’s basic information that anyone conducting their due diligence into BidXcel needs, yet is absent from the company website. I don’t write reviews with secret insider information and hotlines into company CEOs, I write them from the perspective of a member of the public conducting their due diligence on a company.
As far as MLM companies go, if you have to go out of your way as a prospective member to find out basic information pertaining to the legitimacy of the compensation plan, then something’s wrong on the company end.
History leaves clues. ANY company seeking to do legitimate and successful business will succeed or fail based on its management, business plan and capital strength. Start there.
Looks like a shakey deal to me in an industry sector that has not yet proven itself. Next….
Bidxcel is zeekler why they don’t admit it? pff it is easy all “old”Zeekler affi”s get a invite for another webinar Zzzzzzzzzzzzzz.
don’t get in there.
I was just wondering now that Bidxcel has officially launched and everything is up and running what is your opinion of the entire situation?
I see many vast improvements. For example every single bid is tracked and accounted for. If I give a bid away and it is not used then I can take it back and use it myself or give it to someone else.
I certainly don’t get credit for the bid until it is used. Also the bonus pool if working just fine. It really does reflex the actual bids used each and every day and we affiliates are paid according to how much there is to distribute.
So what do you think?????
@Dan — while it’s *much* improved over Zeek’s fake membership, that’s actually not saying much.
By allowing self-purchase of bids to qualify for GV and PV, this is going to open up a big can of worms known as “self-consumption”.
While Webster vs. Omnitrition stated very clearly that “ultimate end user” is someone OUTSIDE the company (i.e. NO self-consumption), FTC is willing to allow at least SOME self-consumption, but less than 49% of sales. Any more, and you have a pyramid scheme.
So the question is, how many retail customers does BidXcel really have, and are they really enforcing the 2 active retail customers per affiliate requirement? or in other words, how much internal consumption in there, vs. actual bid purchases from retail customers?
If they don’t release some numbers soon, then the risk of them being hit by FTC will be increasing exponentailly.
The two customer minimum requirement is very real. They are initially verified by email. As you increase through the pools, the customer requirements also increase.
We also, as affiliates, can absolutely give bids away – it is highly encouraged. To real, potential customers. We want as many customers as possible!!
It should also be noted – that we pay for the bids we give away, and that it is a lot more expensive to purchase bids as an affiliate in our bidxcel back office than as a customer on the xcelbids.com site.
So when I give them away (which I do) it is to a real, potential customer who will hopefully love the auctions and come back and purchase their own bids!
& the idea that my own purchases in any way is included in my GV is totally incorrect – the only volume that counts towards GV for the purposes of qualification is that of my directly sponsored people – end of story.
I get it, that people’s preconceived notions are what they are, haters are going to hate no matter what, and that it is what it is.
Meanwhile, I am earning daily – a tremendous income with yet untapped potential – in a legitimate E-Commerce business. Yes, E-Commerce – the site also has a store, no auction bidding required…
But if they don’t, someone still gets paid right?
So affiliate money is still just shuffled around between members.
An email address is the lightest of customer verification, in that it’s how easy to set up an email address and reply to an automated email sent out? Hell you could even just use one of those temporary email address creators.
Furthermore, as with the Ponzi scheme Zeek Rewards, the Bidxcel affiliate website appears to be trumping the Xcelbids penny auction website traffic wise:
Note that according to Alexa (not concrete of course), BidXcel’s traffic has plummeted out of the ballpark since early October. Xcelbids plummeted mid October and has slightly recovered, but isn’t looking too much better.
How much of your income comes from affiliate purchases and how much come from genuine retail customers?
Better yet, how many genuine retail customers do you have who have purchased something with non-affiliate money vs. affiliates in your downline?
My 2 cents… Thinking about joining Bidxcel and I have been studying this organization and have actually looked at a members back office to see how it works.
As far as the bids being used, my understanding is that each bid has a tracking number and will not go into the revenue pools for payment to affiliates unless actually used at an auction.
These bids that are purchased and used can be from affiliates or retail customers. This is the major distinction from Zeek, where they paid affiliates daily regardless of real revenue. Personally, I don’t care who is buying the bid packs as long as nobody gets paid from anything but sales.
I also personally don’t care that the auctions may be considered gambling. Lot’s of people gamble, ever heard of the lottery run by our own government with the worst odds of winning anything. People do it for fun.
Not sure I have the above facts correct and would like input from others that have studied this before I join. Thoughts?
* Whether the bids are USED or not isn’t very important. 100 bids used in a penny auction will raise the price of an item with $1, and that’s all the potential revenue it will generate.
* Whether bids are PAID FOR or not is important. Revenue is generated when the bids are SOLD, not when they are USED.
* HOW people pay for bids is important, e.g. whether they pay with virtual currencies or with “cash equivalencies”.
Revenue and profit are generated from a STREAM OF MONEY being paid to the company, usually in exchange for something. Revenue and profit will require REAL TRANSACTIONS OF MONEY rather than virtual currencies.
Virtual currencies are any type of “numbers on a screen” or “numbers in a database”, e.g. BIDS, Profit points, commissions, “Cash available” or any other names they call them. Virtual currencies do not generate any revenue or profit.
Affiliates reinvesting any type of virtual currency will obviously NOT generate much profit. It won’t generate any profit if they give the bids away, either. It’s a red flag if a company is paying out any type of commissions from purchases like that.
Quibids’ type of auctions can generate additional revenue if people are using the “Buy now!” option, BUYING the item rather than winning it to a lower price. But in Quibids, the bidders are real customers paying for the bids and items with real money.
THE TYPICAL MLM PENNY AUCTION COMPANY
Most of them have money from NEW investors as the most significant stream of money coming IN. They are unable to pay money OUT if the stream of new investors slows down, or when the old investors are withdrawing more money than new investors are putting in.
You saw that in Zeek. In the last 3-4 weeks, even affiliates with huge downlines had trouble getting their money OUT.
You can see it in Bidify, too. Affiliates are not able to withdraw any money.
Why should BIDS go into a revenue pool, anyway? Revenue is usually about MONEY?
A bid doesn’t belong in a revenue pool, even if it has a tracking number. It doesn’t belong there even if they give it another name in the process, either.
SALE is about an “exchange of values”, usually about EXTERNAL customers PAYING for goods or services.
EXTERNAL is important if you want to generate any profit, rather than moving money around inside a closed system, e.g. from new investors to old investors.
PAYING is normally about monetary transactions, e.g. about cash or credit cards.
I agree. The gambling aspect doesn’t seem to be any problem in the MLM penny auction companies. The lack of real (paying) customers seems to be a much bigger problem.
I have been in BidXcel from day 1. I enrolled a few days before launch. I started earning money in the daily pools October 18th and have earned commissions every day since then. The direct deposit from BidXcel into my personal bank account has been done every week since the first commission run.
I, like many, lost thousands in Zeek. I believe there can be a successful revenue share MLM out there – hoping BidXcel is it, of course. I have purchased $5,000 worth of bids and received commissions totaling over this amount. I have had several affiliates I sponsored earn more than they have “put in”.
At least with the company paying commissions every week there is no 90 or 100 day waiting period. Plus you can’t earn money in the revenue share unless the bids you purchased have been used on the auctions. I have won auction items, as have many customers and affiliates I have brought into the company.
I know for a fact that customers I have personally signed up (not affiliates) have bought retail bids, used these bids, and won items (and received the items from Amazon). So far, so good – but the company has only really been operating for 2 months now.
I heard from an affiliate that attended the meeting in Portland, Oregon December 1 that there are about 5 customers for every affiliate. I realize this doesn’t mean much, but it’s a heck of a lot better than 1 or 2 customers per affiliate.
Andrew Bracken, the owner, spent a long time talking about compliance to the meeting attendees. The fact that the owners of the company are doing road shows is impressive. Paul Burkes never traveled – you had to come to him once a month for his “red carpet day” event.
It comes down to retail customers – I know. Since QuiBids is a successful penny auction – I truly believe that a MLM penny auction can make it as well. Most will fail, but some will succeed.
My hat is in the ring with BidXcel and XcelBids. Let’s hope they listen to your constructive criticism and continually adjust to make it long term.
Ground floor it SUPER risky, but if your bet is right you will be rewarded!
It’s worth noting that having the customers isn’t enough.
Big picture, if >50% of the revenue coming into Bid Xcel is affiliates buying bids – they’re not legit.
The customers need to be buying bids, and this activity needs to eclipse the revenue the affiliates are pumping into the scheme.
Is that going to happen when affiliates are paid daily commissions pegged to how much money they “put into” the scheme?
You tell me…
in your opinion, what percent of all MLM companies out there have over 50% of revenue coming from non- business owners?
My wager is that it is very low, like 5%…
Maybe some energy MLMs have it but all product based, shopping, travel, precious metal, fuel additive, cell phone, etc get the vast majority of their revenue from the distributor base, right?
How ever many is irrelevant and has no bearing on the legitimacy of any one individual company.
We take it one company at a time and on this particular occasion we’re discussing BidXCel. If the majority of revenue coming into BidXCel is from affiliates, they’re not legit pure and simple.
Prospective members can easily verify this by asking to see some numbers from their prospective uplines (how many genuine retail customers do they have who regularly purchase bids with non-affiliate money?).
ZeekRewards had a 20:1 customer to affiliate ratio, so the number of customers doesn’t tell us much. What are the QUALIFIERS for customers to be counted as “active customers” in BidXcel?
A customer should normally be a person not affiliated with the company, using his OWN money to buy one or more bidpacks per month, using the bids in auctions.
I found some information on the internet:
BidXcel’s compensation plan and qualifiers seems to be heavily geared towards recruitment and autoship (monthly ePacks), rather than towards running a sustainable business with real customers.
Can you be more SPECIFIC? E.g. “I have signed up xx customers, one of them has bought yy bidpacks last month, another one has bought zz bidpacks last month, …”.
For ZeekRewards, I asked more than 50 affiliates questions about customers in 8 months. I was able to identify 2 real customers in 8 months.
* One had bought 400 retail bids for $260 before she became an affiliate herself.
* The other had bought a 50 bidpack for $32.50, as a “test purchase”.
* In addition, I identified 1 real free customer. She had tested 300 free bids in an auction using the ABE Automatic Bidder, but she wasn’t satisfied with the solution.
Real customers are usually very specific. They know exactly HOW MUCH they have purchased, HOW MUCH they have paid for it, WHY they were interested in the first place, if they have won anything and what they have won, the experience they have with the product.
They are usually RELAXED if you ask a few questions about it, willing to fill in a few additional details (as long as you ask “normal” questions).
Made up stories about imaginary customers are usually vague and general, with no details at all. People will feel uncomfortable if you try to ask for details, and will try to avoid further questions.
I had several Zeek affiliates telling me vague stories about all the customers they had, and how satisfied those customers were. All were made up stories, or family members acting as real customers.
BidXcel has absolutely no incentives for recruiting customers rather than affiliates. The compensation plan pays you MORE for recruiting affiliates than for recruiting customers.
We do have incentives to get new customers.
Now, are we perfect yet? No,but I like the company direction in the customer bonus pools.
It looks like its shutdown. bidxcel.com
This Gal claims to make over 6 figures with Bidxcel…
Bidxcel was a joke. I for one am glad it is shutdown.
The Gal claiming to make 6 figures is a joke too. she and her team had multiple accounts and rigged the income along with their personal friend/VP of sales Richard and Susan Anzelone.
My advce: Stay away from them and Fara and Dave Manning.
Faraday Hosseinipour’s (The Gal’s) “Plan B” was Leaf International, a profit sharing Ponzi scheme “buy AdCredits, assign them to customers daily, watch 20 websites daily, earn from downlines purchases of AdCredits plus from a daily profit pool”.
In other words, a Ponzi/pyramid hybrid with some meaningless work to make it look legit.
I watched the video from the conference call,
–> found via the other video’s “Watch on Youtube”,
–> clicking on username,
–> watching the newest video in that list.
I can LINK to it if anyone is interested, but I consider it to be “team related” rather than “company related”.
BidXcel has CLEARLY collapsed.
Here’s Leaf International review:
It doesn’t really matter how much fake work you put into a program to make it look legit, it will still be a Ponzi/pyramid hybrid.
Leaf International is a successor to burned out Ponzi scheme GoodleAdz (US/Norway). GoodleAdz was “burned out” right from the start, but it reached around 2,000 members in a couple of years (2010-2011).
Interesting, Faraday Hosseini is married to David R. Manning and has a company called “Network Pros” in Florida. They blog on Empower as DaveandFara, and have an article on there dated November 2012 claiming to have made 5 figures off BidXcel in 6 weeks.
However, the only thing she really said in the article is she recruited 200 people, each of whom recruited, giving her 2000 downlines, which is what allegedly allowed her to claim a 5 figure income in 3 months.
In other words, she recruited very very hard, and sold nothing. She knows how to play the recruitment game, and nothing else.
I added the URL-addresses to that description to make it easier to find.
The video hasn’t become VERY popular, a total of 13 views in 24 hours (and 2 of them is mine). With 200 personally recruited and more than 2,000 people in downline that number of views should have been much higher.
In other words, the “#1 team” is only faking it. Very few on her team can have made any money.
One funny thing about Faraday’s videos …
Her video “Why is Bidxcel suspended” is more than 10 times more popular than her recruitment video for her next project. Currently the number of views are 382:26 (14.7 : 1 ratio). People seems to prefer to look at her failed projects rather than her upcoming ones. 🙂