Zeek Rewards Review: SPAM, Penny Auctions & MLM
Ever heard of Zeekler?
Yeah, I hadn’t either but when the company Zeek Rewards came across my desk for review I soon learned that Zeekler was Zeek Reward’s parent company, with the latter operating as the affiliate and marketing company of the former.
Dealing primarily in Penny Auctions (I’ll go more into that later), Zeekler aims to provide its members an income opportunity through its affiliate arm Zeek Rewards.
Read on for a full review of the Zeek Rewards business opportunity.
Zeek Rewards is the affiliate arm of the penny auction site Zeekler. Both companies are owned by Rex Venture Group LLC who are listed as a subsidiary of Lighthouse America US.
Staff wise, Zeek Rewards (and Zeekler) is CEO’d by Paul Burks (photo right). Burks previously ran something called the ‘Free Store Club’ which was a now defunct MLM opportunity.
From what I can gather, Free Store Club was a replicated storefront you could purchase into with products you could then stock your store with. The basic idea was that you’d promote your storefront and coupled with a MLM compensation backend, earn a commission on the sales made through your store.
Zeekler seems to be the next incarnation of Free Store Club in that Burks provides the products Zeekler puts up for auction via whatever wholesale channels he was using to stock Free Store Club.
The Zeek Rewards Product
Utilising the Zeekler backend, either via a commission on bids made through Zeekler (these bids are commissionable), or operating your own replicated Zeekler storefront (provided to you upon signup), members of Zeek Rewards can retail various products that Zeekler has on offer.
Stocked by CEO Paul Burk’s wholesale channels, depending on which membership option you pick (how much money you’re willing to pay for a monthly subscription), members can pick and choose what inventory they want to put in their store and even have the option of adding their own products too.
As far as Zeeklers auctions go, you’ll be selling bid pack purchases which you’ll then earn a commission on.
These bids don’t have any real world value, but within Zeekler each bid has a bid value of 65 cents.
Now although strictly speaking not a product, I’ve decided to include the various auctions available at Zeekler seeing as a basic understanding of how they work is essential in order to establish the value of Zeekler’s bid packs.
Penny auctions typically start at $0.01 and from here members can place a bid on the item, typically raising the price between 0.01 and 0.08.
Each auction has a timer and as the timer approaches 30 or so seconds, each time a new bid is placed it resets itself to around 30 seconds. When bidders are finished bidding (keep in mind each bid increases the price) and the timer runs out, you have a winner.
Reveal Price Auction
In a reveal price auction an item starts at a fixed price, which is allegedly close to the retail price of the item.
This price is unknown to bidders and they must bid to see the current price. With each bid on the item the price drops incrementally.
Once the price hits a reserve, bidders then have the option of purchasing the product, or continuing to bid on it and drop the price further. Once the reserve has been met, the first bidder to agree on the price shown to them wins the auction.
Falling Price Auction
In a falling price auction, the price of an item incrementally drops each second until it hits a reserve price. Bidders can ‘drop’ the price themselves (I’m not sure why they’d want to given the price is dropping anyway) at any time by placing a bid.
All participants in the auction are able to purchase the item at any time, at which point the auction is ended.
Zeekler’s Premier Auctions function in the same manner as a regular penny auction but they come with an entry fee that must be paid in order to participate in the auction.
VIP auctions carry an entrance fee and each member is given a certain number of VIP bids. Using these bids doesn’t cost anything unless you win the auction, at which point the auction is over and the winner pays the winning bid for the item.
Minimum bid amounts and the time an auction runs for differ from auction to auction depending on what is being auctioned off at the time.
Membership ranks for Zeek Rewards
As far as I can tell, there are three membership levels within Zeek Rewards and their sole purpose is to further reward either Silver, Gold or Diamond paid members who recruit others to the business.
Distributor – A Silver Affiliate becomes a Distributor upon personally recruiting two qualified preferred customers. Distributors are entitled to
- matrix commissions of 25 cents for each Silver, Gold or Diamond paid affiliate in their matrix
- 5% on first generation and 2.5% on second generation VIP bid purchases.
Manager – A Gold Affiliate becomes a Manager upon personally recruiting two qualified preferred customers. Managers are entitled to
- matrix commissions of 35 cents for each Silver and $1 for each Gold or Diamond paid affiliate in their matrix
- 7% on first generation and 3.5% on second generation VIP bid purchases.
Executive – A Diamond Affiliate becomes an Executive upon personally recruiting two qualified preferred customers. Executives are entitled to
- matrix commissions of 40 cents for each Silver, $1.50 for each Gold and $3.50 for each Diamond paid affiliate in their matrix
- 10% on first generation and 5% on second generation VIP bid purchases.
The Zeek Rewards Compensation Plan
The Zeek Rewards compensation plans is membership based and offers its members a variety of ways to earn commissions utilising the Zeekler website.
Here’s a rundown of the various ways in which Zeek Rewards affiliates can earn commissions;
Zeek Rewards offers a 20% retail commission on all Bid Pack purchases made by personally sponsored retail customers you refer to Zeekler.
Retail Store Commissions
Upon joining Zeek Rewards you will be given a replicated Zeekler retail store. Depending on which membership level you join Zeek Rewards at, members are able to pick and choose what inventory they wish to stock and even stock their own items for sale.
Commissions earnt in the retail store are the difference between the wholesale price and retail price of anything you sell.
Affiliate membership commissions
Zeek Rewards will pay out 20% a month on any Silver, Gold or Diamond membership you sell. This is a recurring commission paid out monthly for the life of the sponsored account.
Retail Profit Pool
For qualified Zeek Rewards affiliates, the company offers what they call a Retail Profit Pool. This pool is made up to 50% of the company’s gross retail profit on the sale of bid packs on any given day.
To qualify for this pool, members must either hold a Silver, Gold or Diamond membership, post an ad for zeekler.com on the internet (more on this forced spam by Zeek Rewards in the conclusion of this article) and have sold a bid pack or given away VIP bids on that particular day.
The Retail Profit Pool is calculated daily and is a percentage commission paid based on the amount of VIP ProfitPoints you’ve earnt (via the sale of bid packs or the giving away of VIP bids).
The 2×5 Forced Matrix
The Zeek Rewards compensation plan utilises a 2×5 forced matrix.
With you at the top this matrix runs five levels deep with two legs branching out on each level. As you start to fill it up, your 2×5 matrix should look something like this;
With 62 positions available to be filled, the forced matrix pays out a monthly flat commission of up to $3.50 (for the exact amounts, refer to the membership ranks earlier in this article) for each paid subscription member in your matrix.
Note that the matrix does extend beyond five levels however beyond five levels a Matching Bonus is paid (you must have various numbers of preferred customers and paid subscription affiliates in order to qualify).
The compensation plan doesn’t mention what this matching bonus is however, and I’ve been unable to verify the exact amounts independently via a third party.
The Diamond Executive Pool
The Diamond Executive Pool is made up of $1 from each new Gold and Diamond subscription or renewal (1st month of renewal) paid for any given month.
To qualify for a share in the Diamond Executive Pool, Diamond (or Executive membership rank) members need to sell silver, gold or diamond affiliate subscriptions.
The amount of shares earnt per subscription sold are 1 for a Silver subscription, 5 for Gold and 10 for Diamond.
The Generation Bonus is made up of a contribution each time a company wide Silver, Gold or Diamond affiliate subscription renewal is paid.
The amounts contributed to the bonus are 25 cents per Silver, $1 per Gold and $2 per Diamond subscriptions renewed.
To qualify for a share in the Generation Bonus, qualified Zeek Rewards members must personally sponsor 6 manager membership rank or higher members.
Joining Zeek Rewards
For those wishing to join Zeek Rewards, there are four options available to them;
Joining Zeek Rewards as a ‘free affiliate’ costs nothing and members receive
- a replicated Zeekler penny auction site
- a replicated Zeekler retail store
- entry into the 2×5 matrix (note that as a free affiliate however you are ineligible for matrix commissions and are ‘compressed’ out when commission are calculated).
A Silver Affiliate account costs you $10 a month and on top of the Free Affiliate benefits, members
- are able to receive matrix commissions
- have access to store inventory with ‘higher margins‘ and ‘deeper discounts‘
A Gold Affiliate account costs you $50 a month. Gold affiliate members
- have access to ‘even higher profit margins and deeper discounts‘ in their retail store
- are able to add their own departments and products and remove those they don’t want within their retail store
A Diamond Affiliate account costs you $99 a month. Diamond affiliate members
- get the ‘highest profit margins and deepest discounts‘ for their retail store
- the ability to add their own departments and products to their retail store
- customisation of how their retail store looks
- a lead capture system (replicated capture page?)
- participation in the Diamond Executive Pool
The main problem I can see with the Zeek Rewards opportunity is that it basically is just one of three businesses run by the same guy.
You’ve got the wholesale distributor side of things, the penny auction site and really, do you actually need a MLM distribution model to attract members? I mean, if the penny auction model is that great shouldn’t it itself attract new members and retain them?
This brings me to my next point of analysis;
Who is using the Zeekler penny auction site and how?
Ironically, here’s how Zeekler advertise their penny auctions;
You know that online shopping has become an overwhelming drag these days.
Are you looking for serious deals, right now? With a little fun and excitement while you’re shopping?
Are you someone who can’t wait to get up at 4am on Black Friday to snag and sometimes battle for the best deals all season?
Or are you someone who avoids crowds and chaos like the plague.
The irony being that, due to the auction models used by Zeekler, online shopping with them is anything but fast and convenient.
Think about it, only one person can win an item and for everybody else, the money they’ve invested in the auction is gone.
Where else can you put money towards a tangible product only to have to walk away with nothing in the end.
Whilst overall the penny auction appears to be a frustrating experience for the end user, company wise they are a ludicrous money spinner.
Take for example product X, it can be an iPod, laptop, digital camera… so long as it’s a hot item people are going to bid on, it doesn’t matter.
Product X has a retail value of $200, but debuts in a penny auction on Zeekler for just 1 cent. With bids incrementally increasing the auction price by 8 cents, let’s say the final bidding price is just $30.
That’s a whopping 85% off the retail price! Sounds great huh? Wrong.
Let’s take look at how we got to the $30 price. At 8 cents a bid, to get to $30 from 1 cent requires 375 bids.
That’s $243.75 in bids alone, and if we add on the final $30 sale price, this brings up the total spend by Zeekler users to $273.75.
Not bad for an item that retails at $200, forget about whatever lower wholesale price Zeekler paid to stock the item themselves.
Keep in mind the above example uses at 85% discount price. Realistically people are probably going to bid above $30 for a high demand $200 item.
And that’s where the long-term viability problem lies with penny auctions like Zeekler.
That $243.75 loss is spread out between everyone who didn’t win the item.
After the honeymoon period in the beginner auction area (where you can’t bid unless you have less than three item wins to your account), Zeekler users are buttered up with a sense of ‘hey, this is easy… why wasn’t I doing this earlier!’ (no doubt helped by careful product selection in the beginner area).
Once in the wide world of general auction though, after a few losses and the giant time sink of bidding on auctions to buy stuff is, most people are probably going to walk away with nothing and take a financial hit for the opportunity to do so.
So given that most people aren’t going to win enough auctions to justify their losses (pure statical mathematics), how do you keep them around?
Answer: You throw them a MLM income opportunity and give them a vested financial stake that relies on the success of your penny auction site.
Enter Zeek Rewards.
Looking at what’s available to members, I’d guess that most of their profits are going to be from the auctions themselves.
Replicated sales portals are useless. They don’t rank in the search engines, you have to not only drive traffic to them yourself but also compete with specialist stores selling the same products, and they have much more buying power than Zeekler does.
This leaves the auctions and given you make a commission on bids when they are bought this is what you’re going to wind up convincing people to buy.
Given that this alone won’t keep them around (they’re unlikely to make a repeat bid purchase unless they get extremely lucky and win some auctions in succession), you’ve then got to try to rope them into the compensation plan so that they too have a vested financial interest in the site.
Thus looking at the greater picture, what we wind up with is a penny auction site that is populated by people who stand to make commissions each time a bid is made on a product.
An organically successful marketplace? Hardly.
Proof alone of this is the fact the in order to be actively qualified, Zeek Rewards members actually have to spam advertisements for the company every 24 hours.
No I’m not kidding. The Zeek Rewards backoffice has an advertisement area that generates banner or text ads for members to copy, and then it provides them with a directory of free classified ads sites that they can click through to paste their spam on.
This isn’t voluntary, this is a company requirement. I mean hell, being required to spam the crap out of the internet in this day and age should be grounds enough alone to make most people run from a MLM opportunity screaming.
Furthermore, this isn’t the first time penny auctions have been combined with MLM, remember Dubli?
After much hype and multiple global launches they eventually flopped and disappeared. I imagine given time the same thing will happen with Zeek Rewards too.
Penny auctions work for the company and if the userbase gets too big inevitably you wind up with an angry userbase frustrated at the fact they can’t win anything.
Given all the members are doing is pumping money into the system and rarely winning anything, they leave.
Eventually, even a MLM compensation plan isn’t going to be enough for them to stick around and that’s probably where we’ll see Zeek Rewards eventually wind up.