ToucanWin Review: MLM penny auctions in 2023?
ToucanWin operates in the penny auction MLM niche. The company doesn’t provide a corporate address on its website.
Heading up ToucanWin are co-founders Kelley Foote (CEO) and Don Fiechter.
Kelley Foote appears to have made a name for himself in Bellamora back in the day.
Bellamora shut down in 2011, after which Foote spent nearly a decade on various gaming ventures (non-gambling).
Don Fiechter doesn’t appear to have an MLM history. Instead he’s credit with a thirty-two year history in the gaming and casino industry.
ToucanWin doesn’t provide a corporate address on its website. What we do know is, based on their respective LinkedIn profiles, Foote and Fiechter are based out of Missouri and Arizona respectively.
Foote’s LinkedIn profile represents ToucanWin was founded in January 2022. The company doesn’t actually appear to have launched though until September to November 2022.
Read on for a full review of ToucanWin’s MLM opportunity.
ToucanWin markets a penny auction platform.
Bids to participate on the platform cost $1 and can be purchased in $10, $25, $50, $100, $250, $500 or $1000 packages.
Autoship “smart bid” packages are also available in $50, $100 (10 bonus bids), $250 (35 bonus bids), $500 (75 bonus bids) and $1000 (200 bonus bids) packages.
Retail customers can bid for free, but they are restricted to one free bid every 8 hours and must log in and click a button to claim the bid each time.
ToucanWin sells access to an automated bidder they call Mr. Pennyworth. Access to the auto-bidder costs $9.99 a month or $80 annually.
This fee is reduced to $4.99 a month if a $100 smart bid autoship package is subscribed to. The fee is waived if a $250 smart bid autoship package is subscribed to.
ToucanWin affiliates can purchase bids and use these as marketing tools. Note that any bids “gifted” to retail customers must be used within 10 days, or they’re returned to the affiliate.
ToucanWin’s Compensation Plan
ToucanWin’s compensation plan combines direct referral commissions with bonus pools.
Commission volume is generated by penny auction bid purchases by referred retail customers and recruited affiliates.
ToucanWin Affiliate Ranks
There are twelve affiliate ranks within ToucanWin’s compensation pan.
Along with their respective qualification criteria, they are as follows:
- Bidfluencer – sign up as a ToucanWin affiliate
- Successful Bidfluencer – refer 1 retail customer or recruited affiliate who buys at least 100 bids in 30 days, or refer 2 retail customers and/or recruited affiliates who together buy at least 150 bids in 30 days
- Active Successful Bidfluencer – maintain Successful Bidfluencer criteria each month and buy 50 personal bids or sell 50 bids to referred retail customers or recruited affiliates
- Active Influential Bidlfuencer – continue to buy or refer 50 bids a month, and refer at least 50 retail customers and/or recruited affiliate who together are purchasing at least 600 bids a month, or refer at least 2 retail customers and/or recruited affiliates who together are purchasing at least 1200 bids a month
- Motivating Bidfluencer – continue to buy or refer 50 bids a month, and refer at least 35 retail customers and/or recruited affiliate who together are purchasing at least 1600 bids a month, or personally refer at least 4 retail customers and/or recruited affiliates and be generating at least 5000 bid purchases a month from a total downline of at least 10 bidders (max 60% counted from any one unilevel team leg)
- Mentor Bidfluencer – continue to buy or refer 50 bids a month, and refer at least 25 retail customers and/or recruited affiliate who together are purchasing at least 3000 bids a month, or personally refer at least 6 retail customers and/or recruited affiliates and be generating at least 15,000 bid purchases a month from a total downline of at least 100 bidders (max 60% counted from any one unilevel team leg)
- National Bidfluencer – buy or refer 100 bids a month, and refer at least 60 retail customers and/or recruited affiliate who together are purchasing at least 8000 bids a month, or personally refer at least 8 retail customers and/or recruited affiliates and be generating at least 50,000 bid purchases a month from a total downline of at least 350 bidders (max 60% counted from any one unilevel team leg)
- National Mogul Bidfluencer – continue to buy or refer 100 bids a month, and refer at least 120 retail customers and/or recruited affiliate who together are purchasing at least 15,000 bids a month, or personally refer at least 12 retail customers and/or recruited affiliates and be generating at least 100,000 bid purchases a month from a total downline of at least 700 bidders (max 40% counted from any one unilevel team leg)
- International Bidfluencer – continue to buy or refer 100 bids a month, and refer at least 240 retail customers and/or recruited affiliate who together are purchasing at least 30,000 bids a month, or personally refer at least 15 retail customers and/or recruited affiliates and be generating at least 250,000 bid purchases a month from a total downline of at least 2000 bidders (max 30% counted from any one unilevel team leg)
- International Mogul Bidfluencer – qualification criteria not provided
- Global Bidfluencer – qualification criteria not provided
- Global Mogul Bidfluencer – qualification criteria not provided
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
ToucanWin affiliates earn a 10% commission on bids purchased by personally referred customers and recruited affiliates.
ToucanWin affiliates who pay $39.95 for ToucanWin University receive a 20% referral commission rate.
ToucanWin claims it divides 50% of weekly generated bid sale net revenue into ten Bonus Pools.
These Bonus Pools correspond with ToucanWin’s affiliate ranks:
- Active Successful Bidfluencer Pool – 20% of the Bonus Pool, shared equally among Active Successful Bidfluencers
- Active Influential Bidfluencer Pool – 20% of the Bonus Pool, shared equally among Active Influential Bidfluencers
- Motivating Bidfluencer Pool – 15% of the Bonus Pool, shared equally among Motivating Bidfluencers
- Mentor Bidfluencer Pool – 10% of the Bonus Pool, shared equally among Mentor Bidfluencers
- National Bidfluencer Pool – 10% of the Bonus Pool, shared equally among National Bidfluencers
- National Mogul Bidfluencer Pool – 10% of the Bonus Pool, shared equally among National Mogul Bidfluencers
- International Bidfluencer – 5% of the Bonus Pool, shared equally among International Bidfluencers
- International Mogul Bidfluencer – 4% of the Bonus Pool, shared equally among International Mogul Bidfluencers
- Global Bidfluencer – 3% of the Bonus Pool, shared equally among Global Bidfluencers
- Global Mogul Bidfluencer – 2% of the Bonus Pool, shared equally among Global Mogul Bidfluencers
Note that the above percentages (which I double checked) come to 99%. It’s unclear where the remaining 1% from the Bonus Pool goes.
Also note that while the Bonus Pool are calculated weekly, they are paid out quarterly. Rank must be maintained for all three months of the quarter to receive the Bonus Pool at any qualified for rank.
Peak Performer Monthly Bonus
The Peak Performer Monthly Bonus is made up of 5% of ToucanWin’s company wide bid purchase volume each month.
To qualify for the Peak Performer Monthly Bonus, a ToucanWin affiliate must be in the top 20 for bid sales that month.
ToucanWin affiliates and retail customers can sell products on the company’s penny auction platform:
- $500 to auction up to ten items per month.
- $1000 to auction up to 25 items per month
- $3000 to auction up to 100 items per month
Auction commissions on sold items are paid as the price the auction closes at plus 30% of total bid revenue spent.
A 20% match of the 30% bid revenue paid to the auctioning customer/affiliate is paid to the affiliate who referred/recruited them.
ToucanWin affiliate membership is free. Free affiliates earn reduced referral commissions only.
Full participation in ToucanWin’s MLM opportunity costs $39.95 annually.
ToucanWin refers to paid affiliate membership as “ToucanWin University”. This corresponds with some training affiliates have to sit through.
MLM penny auctions were a thing around 2010. Once people realized they were a horrendous business model for consumers, they then promptly died off.
The schtick behind penny auctions is the chance to win an item for a ridiculously low price.
Take for example this ToucanWin auction for a 3 bedroom two story house in California, currently sitting at $30.62 with 22 minutes left on the clock.
Sounds enticing, doesn’t it?
While there are variations of the penny auction model, the typical model sees auctions start at $0.01 with a timer. Bids increase the value by $0.01 (a penny) and also increase the timer (ToucanWin appears to use 15 to 25 seconds per bid placed).
Whatever the final price is when the timer runs out is what the item is sold for.
ToucanWin adds a reserve price to this model.
EACH AUCTION THAT HAS A PURPLE “MIN PRICE” LABEL REQUIRES THAT A RESERVE HAS TO BE MET.
THIS MEANS THAT THIS ITEM WILL NOT BE SOLD UNTIL THIS NUMBER OF BIDS HAS BEEN PUT INTO THE AUCTION.
THE RESERVE AMOUNT CAN VARY BASED ON THE ITEM COST AND SHIPPING.
RULE OF THUMB: RESERVE PRICES WILL BE VERY CLOSE TO THE COST OF THE ITEMS DIVIDED BY 100.
IF AT LEAST ONE BID HAS BEEN PLACED AND THE INITIAL ADVERTISING CLOCK RUNS OUT, IT WILL RESET ITSELF; THEN CONTINUE TO ADVERTISE UNTIL THE RESERVE HAS BEEN MET.
IT IS ONLY WHEN THE RESERVE HAS BEEN MET THAT THE RESET CLOCK (RED IN COLOR) WILL COUNTDOWN TO CONCLUSION IF NO OTHER BIDS ARE PLACED.
Sorry for the caps, that’s how the reserve explanation is presented on ToucanWin’s website.
Of the 80 live penny auctions currently on ToucanWin’s platform (hosted on “auctionstoucanwin.com”), none had reached their reserve at time of publication.
So much for buying a Californian house for $30. When the twenty-minute timer counted down to zero, it reset back to 24 hours.
There’s no indication of when the auction was created on ToucanWin’s website. If we look at the source-code though, we can see the auction was created in October 2022.
Said house is listed as having a retail value of $1,599,000. If we divide that by 100 to get a “rule of thumb” reserve price, we get $15,990.
A $1,599,000 house for $15,990 still sounds like a steal, but the devil is in the anti-consumer math behind penny auctions.
Each bid placed on ToucanWin costs $1 and raises the price of an auction by $0.01.
To go from $0.01 to $15,990 requires placement of 1,599,000. And would you look at that, we’re back to the $1,599,000 retail price.
If the house sold at auction for $15,990, $1,599,000 was spent on bids but only one person won the house. The other consumers participating in the auction collectively lost $1,599,000 minus whatever the winning bidder spent on bids.
And there’s no end to how many times this can happen, or the losses consumers can accrue over time (they’re losses because losing a penny auction leaves you with nothing).
Where things get even more anti-consumer is when an bidding continues above the set reserve. At $15,990 you’re looking at just shy of 1.6 million bids having been placed. Statistically that’s a lot of people with a vested interest to keep bidding, and this is where sunk cost fallacy kicks in.
As the auction price rises beyond the reserve, more and more money is lost. Eventually only one bidder wins the prize. Everyone else participating loses money.
And that’s just one auction.
To further illustrate the anti-consumer math behind penny auctions, this is from one of ToucanWin’s own marketing videos;
Imagine some lucky individual wins a $100,000 sports car for $11,000.
Each penny bid is equal to $1. So $11,000 in penny bids actually generates $1,100,000 in total revenue for ToucanWin.
ToucanWin purchases the sports car for $100,000. So the net revenue for the auction is $1,000,000.
Did you catch that?
$1 million in consumer losses so that one person wins a $100,000 car.
Here’s something I didn’t include in the introduction of this review, pertaining to ToucanWin co-founder CEO and Kelley Foote:
Foote began Tweeting about Zeek Rewards in July 2011. This makes him an early investor.
Then, as per the tweet above, Foote signed on as Zeek Reward’s Training Director later that same month.
Foote being involved in Zeek Rewards at the executive level doesn’t come as a surprise. To be clear: ToucanWin isn’t a Ponzi scheme – but it’s pretty obvious Foote is trying to relive the glory days.
Zeek Rewards growing as big as it did (a $600 million Ponzi now seems comparatively small in a post-crypto Ponzi world), spawned off a bunch of clones. Some were also Ponzi schemes but many weren’t.
None of those business lasted long – because penny auctions are terrible for consumers. Zeek Rewards itself would have been a short-lived flop if it wasn’t for the Ponzi scheme, the penny auction side of the business never took off.
Putting aside Foote’s involvement in one of the most notorious MLM Ponzi schemes of all time, the takeaway here is that time and time again we’ve seen, from a retail perspective, that MLM penny auctions aren’t viable.
That’s a major problem when the legitimacy of your MLM company hinges on selling bids to retail customers.
ToucanWin doesn’t make any distinction between bids purchased by retail customers and recruited affiliates. Keeping in mind how anti-consumer penny auctions are, this paves the way for a pyramid scheme.
If the majority of bids purchased through ToucanWin are being purchased by affiliates (regardless of what they do with them), ToucanWin is operating a pyramid scheme.
Given the lack of activity on the company’s listed eighty auctions, I’m pretty confident that’s what’s happening.
SimilarWeb tracked 7200 visits to ToucanWin’s MLM marketing website in January 2023 (down from 31,500 visits in December 2022).
Traffic to ToucanWin’s auction website isn’t high enough for SimilarWeb to track (less than 5000 visits a month).
If ToucanWin had a healthy retail customer base, this would be the other way around.
The math behind MLM pyramid schemes guarantees that when they collapse, the majority of participants lose money.