DealDash: The Pay-to-Participate Auction Site
Do you love the thrill of auctions but hate the uncertainty of traditional bidding systems? Then you might want to try DealDash, an exciting pay-to-participate auction site that leverages gamification to make your online shopping experience more engaging and rewarding.
In this article, we will explore what DealDash is, how it works, and who its founders and CEO are. We will also discuss its unique features and revenue streams, as well as some of the concerns and complaints that have been raised by consumers and advocacy groups.
What is DealDash? DealDash is a pay-to-participate auction site that enables consumers to bid on products in real-time and potentially win them for a fraction of their retail price.
Unlike traditional auctions where you have to pay only when you win, DealDash requires every bidder to purchase bids upfront, regardless of whether they win or lose. Each bid typically costs between $0.12 and $0.75, depending on the package size and the current promotion.
For example, you can get 100 bids for $60 (at $0.60 per bid), 200 bids for $100 (at $0.50 per bid), or 300 bids for $180 (at $0.60 per bid). These bids are non-refundable and non-transferable, meaning that you cannot get your money back or sell your bids to someone else.
Once you have purchased your bids, you can start browsing the items up for auction and begin bidding on them. Each auction has a countdown timer that starts at a certain value (e.g., $0.01 for a $1,000 laptop) and decreases in increments of one cent every time a bidder places a bid.
Each bid also extends the timer by 10 seconds, giving other bidders a chance to react and place their own bids. The auction ends when the timer reaches zero, and the last bidder to place a bid at that moment wins the right to purchase the item for the final price, which is the sum of all the bids placed during the auction plus the starting value.
For example, if a laptop sells for $100, then there were 10,000 bids placed during the auction, with each bid costing $0.01. This means that the total revenue from the auction was $100 + $0.01 * 10,000 = $200, and the winner paid only a fraction of that amount.
One of the unique features of DealDash is the Buy It Now & Get Your
Bids Back for Free option, which allows bidders who did not win the auction to purchase the item at its retail price and get all their bids back for free. For example, if you participated in an auction for a $1,000 laptop but did not win, you can still buy the laptop for $1,000 and get all your bids back (e.g., 100 bids for $60) to use in future auctions.
This ensures that you never waste your bids and always have the option to get the item you want at a fair price. Other unique features of DealDash include gamification elements such as badges, levels, and leaderboards, which reward bidders for their engagement and loyalty.
You can earn badges for different achievements such as winning your first auction, bidding on 10 different items, or referring a friend to DealDash. You can also advance through different levels such as Bronze, Silver, Gold, and Diamond by accumulating points based on your bidding activity.
The higher your level, the more perks and benefits you receive, such as free bids, faster shipping, and access to exclusive auctions. Moreover, DealDash offers free shipping on all items and works with trusted partners and manufacturers to ensure that every product comes with a warranty.
How DealDash works? DealDash works by leveraging a proprietary bidding platform that combines pay-to-participate dynamics with gamification elements to create a fun and engaging shopping experience.
Consumers who are interested in participating in auctions on DealDash first need to create an account by providing their email address and some basic information. They also need to agree to the terms and conditions of using the site, which include guidelines on how to bid ethically and responsibly.
Once they have signed up, they can start browsing the selection of items up for auction and deciding which ones they want to bid on. Before they can place any bids, however, they need to purchase bid packages from DealDash.
These bid packages come in different sizes and prices, ranging from as few as 50 bids to as many as 3,000 bids or more. The cost per bid ranges from $0.12 to $0.75, depending on the package size and the current promotion.
Consumers can choose the package size that fits their budget and bidding frequency, knowing that each bid they place will cost them a certain amount and that they cannot get their money back if they change their mind or lose all their bids. Once they have purchased their bids, they can start bidding on the items they like and following the countdown timer and the bidding history.
They can also use various bidding strategies such as bid-butlers (automatic bid placement), peak-bidding (strategic timing), or bid-tracking (history analysis). They can also use the Buy It Now & Get Your
Bids Back for Free option if they really want to get the item they were bidding on and maximize the value of their bids.
However, they need to act fast since this option is available only for a limited time after the auction ends and may be subject to availability and eligibility conditions. In order to ensure fair and transparent auctions, DealDash employs a number of policies and procedures that aim to prevent fraud, collusion, and shill bidding.
For example, it uses a third-party auditing firm to monitor its auctions for compliance with its rules and guidelines. It also blocks bidding from certain IP addresses and identifies suspicious bidding patterns or anomalous behavior that may indicate foul play.
Finally, it invites its users to report any suspicious activity or concerns they may have via its support portal or social media channels. How DealDash makes money?
DealDash makes money primarily from the sale of bids, which are its core revenue stream. Every time a consumer purchases a bid package, DealDash gets to keep the money regardless of whether the bids are used or not.
This means that DealDash is essentially selling a virtual currency that has no intrinsic value outside the platform but that enables consumers to participate in auctions and potentially win products for less. The more bids a consumer buys, the more revenue DealDash generates, even if the consumer never wins an auction.
In addition to bid sales, DealDash also makes money from referral fees, which are fees it receives from partners or advertisers who promote their products on its platform. For example, if a partner wants to list their products on DealDash for more exposure and sales, they may pay DealDash a percentage of the revenue generated from that listing.
DealDash also generates revenue from investor funding, which it has received from several sources over the years. For example, in 2016, it received $36.2 million in funding from a group of investors led by Insight Venture Partners, which gave it a valuation of $210 million.
Complaints toward DealDash
While DealDash has attracted many loyal and satisfied users over the years, it has also faced some criticism and class-action lawsuits regarding its practices and policies. Some consumers have accused DealDash of using misleading marketing tactics to lure them into bidding on brand name products and luxury goods that were actually overpriced or unattainable.
Others have accused DealDash of rigging the auctions by using fake bidders or shills to drive up the prices and prevent genuine bidders from winning.
Moreover, advocacy groups such as the Better Business Bureau and Consumer Affairs have received numerous complaints from consumers who felt ripped off or scammed by DealDash’s bidding system.
Some complained that they spent hundreds or thousands of dollars on bids without ever winning a single auction, while others complained that they were charged more than they expected due to hidden fees or unclear terms and conditions. Additionally, some consumer watchdogs have raised concerns about the ethics and legality of pay-to-participate models, which they argue resemble gambling more than shopping and may exploit vulnerable or compulsive consumers.
Founders and CEO of DealDash
DealDash was founded in 2009 by William Wolfram, a young entrepreneur who wanted to disrupt the traditional auction industry by leveraging the power of the internet and social media. Wolfram saw an opportunity to create a new type of auction site that would be more transparent, more engaging, and more rewarding for users who were tired of the old-fashioned bid-and-wait model.
He recruited a team of talented developers and marketers, and together they launched DealDash, which quickly gained traction and popularity among bargain hunters and tech-savvy shoppers. In 2010, DealDash hired its current CEO, Pasi Lohi, who brought his expertise in e-commerce and SEO to help accelerate the growth and expansion of the company.
Lohi saw the potential of DealDash to become a global platform with millions of users, and he focused on optimizing the user experience, the product selection, and the customer service of the site. He also sought to establish partnerships with leading brands and manufacturers to offer exclusive products and deals to DealDash users.
Today, DealDash employs around 50 people across its offices in Minneapolis, MN, and Helsinki, Finland. According to its latest financial statements, it generated $9.7 million in revenue in the fiscal year 2020, with a net loss of $1.9 million.
Nevertheless, the company remains confident of its long-term prospects and optimistic about its ability to provide a fun and fair platform for auctions and e-commerce. Unique Features of DealDash: Buy It Now & Get Your
Bids Back for Free
One of the main advantages of using DealDash is its Buy It Now & Get Your
Bids Back for Free feature.
This feature allows users who did not win an auction to still purchase the item at its retail price and get all of their bids back to use in future auctions. This ensures that users are always able to maximize the value of their bids and are never left empty-handed.
This feature is often referred to as BIN for short and is a key selling point of the platform.
How BIN Works
To take advantage of the BIN feature, users must have placed a bid on an item in an auction that they did not win. After the auction has ended, users have a limited time to purchase the item at its retail price.
The retail price is the price at which the item is sold on other e-commerce platforms, and is often higher than the final price of the item on DealDash. Users who purchase the item at its retail price will receive all of their bids back, which they can use in future auctions.
For example, if a user has bid 50 times on an item that they did not win, they can buy the item at its retail price, get all of their bids back, and use them in future auctions. The benefits of the BIN feature are numerous.
First, users can use the feature to purchase items that they really want at a fair price. This eliminates the frustration of having placed bids on an item many times only to lose the auction in the end.
Second, users are not penalized for not winning an item that they bid on. They can simply use the BIN feature to get their bids back and try their luck again.
Finally, the BIN feature ensures that users always have something to show for their bids, even if they don’t win the auction. This increases engagement and retention on the platform, as users are more likely to keep using DealDash if they feel that they are getting good value for their money.
Gamification Elements
Another feature that sets DealDash apart from other auction sites is its use of gamification elements. Gamification is the process of incorporating game-like elements into non-game contexts to make them more engaging and enjoyable.
DealDash uses gamification in various ways to keep users invested in the platform and to increase their loyalty and engagement. For example, DealDash rewards users for their bidding activity by awarding them points and badges.
These points and badges are based on the frequency, duration, and amount of bids that users place. Users can earn badges for different achievements such as winning an auction, participating in a certain number of auctions, or referring friends to DealDash.
Users can also advance through different levels by accumulating points, with higher levels offering more rewards and perks such as free bids, faster shipping, and access to exclusive auctions. Another gamification element of DealDash is the progress bar.
The progress bar is a visual representation of a user’s progress towards a certain goal or achievement, such as reaching a new level or earning a new badge. Users can track their progress along the bar and can see how close they are to reaching their goal.
This creates a sense of accomplishment and encourages users to continue using the platform.
Free Shipping and Trusted Partners
DealDash offers free shipping on all of its products, a rare and valuable feature in the e-commerce world. Users do not have to worry about shipping costs when they purchase items on the platform.
This is another way DealDash ensures that users receive good value for their money. DealDash also works with trusted partners and manufacturers to provide users with high-quality products that come with the original manufacturer’s warranty.
This ensures that users can purchase with confidence, knowing that they are buying brand new, unused items that are backed by the manufacturer. This is an important feature for users who are concerned about the authenticity and quality of the products they are buying.
How DealDash Works
To get started with DealDash, users must purchase bids.
Bids are the currency used on the platform, and each bid costs a certain amount of money, typically around 60 cents per bid.
Users can purchase bid packages in various sizes, with larger packages offering a lower price per bid. Once users have purchased bids, they can start bidding on items in auctions.
Auctions on DealDash work by having each bid increase the price of the item by one cent. Each bid also extends the auction by 10 seconds, giving other bidders time to place their own bids.
The auction ends when the auction timer runs out, and the last bidder to place a bid at that time is the winner. The winner’s price is the final price of the item, which is the sum of all the bids placed during the auction plus the starting price of the item.
If a user does not win an auction, they can still purchase the item at its retail price using the BIN feature. They will get all of their bids back to use in future auctions, ensuring that they do not waste their bids by bidding on an item that they do not win.
Conclusion
DealDash is a pay-to-participate auction platform that differentiates itself from other auction sites with its Buy It Now and Get Your
Bids Back for Free feature, gamification elements, free shipping, and trusted partners. The platform works by allowing users to purchase bids, bidding on items in auctions, and utilizing the BIN feature if they do not win an auction.
DealDash’s focus on engaging users with gamification elements, transparency, and quality products, combined with its focus on being user-friendly and affordable, make it a popular e-commerce destination for people looking for great deals on a range of products.
How DealDash Makes Money
DealDash utilizes various revenue streams to generate income and sustain its operations. By understanding how DealDash makes money, users can gain insight into the platform’s business model and its impact on their bidding experience.
Bids
The primary revenue stream for DealDash comes from the sale of bids.
Bids are the currency used on the platform that users must purchase in order to participate in auctions.
When users buy bid packages, they pay a certain amount of money upfront for a specific number of bids. These bids are non-refundable and non-transferable, meaning users cannot get their money back or sell their bids to others.
By selling bids, DealDash secures revenue regardless of whether users win or lose auctions. Thus, the more bids users purchase, the more revenue DealDash generates.
Referral Fees on Buy It Now Sales
Another source of revenue for DealDash is referral fees earned from Buy It Now (BIN) sales. When users decide to utilize the BIN feature after losing an auction, they purchase the item at its retail price, receive their bids back, and have the opportunity to participate in future auctions.
DealDash partners with various brands and manufacturers to list their products on the platform, often at competitive prices. For every successful BIN sale, DealDash receives a referral fee.
This fee is typically a percentage of the revenue generated from that specific listing. By establishing these partnerships and earning referral fees, DealDash diversifies its income and creates additional revenue streams.
Investor Funding
DealDash has also obtained funding from investors to support its growth and development. In 2016, the company received $36.2 million in funding from a group of investors led by Insight Venture Partners.
This injection of capital helped fuel DealDash’s expansion plans and improve its overall platform and user experience. By securing investor funding, DealDash has access to additional financial resources that aid in its sustainability and growth endeavors.
Complaints Toward DealDash
Despite its popularity, DealDash has faced criticism and complaints from users and advocacy groups regarding certain aspects of its operations. It is important to understand these concerns to make a fully informed decision about participating on the platform.
Class-Action Lawsuit
DealDash has faced a class-action lawsuit that accused the platform of allegedly misleading users by touting certain items as brand name or luxury products when they were actually generic or cheap imitations. The lawsuit argued that such misleading marketing tactics created an unfair bidding environment and led users to spend bids on items that did not meet their expectations.
While DealDash has settled this lawsuit, it serves as a reminder for users to carefully evaluate the items they bid on and familiarize themselves with the platform’s policies and terms. Touting Certain Brands as “Luxury”
Related to the class-action lawsuit, some users have expressed concerns about DealDash’s portrayal of certain brands as “luxury” items.
There have been complaints that these items may not live up to users’ expectations in terms of quality or authenticity. Users should exercise caution and do their due diligence when bidding on items that are marketed as luxury products.
It is advisable to research and verify the specifications and reputation of the items before committing bids.
Accusations of Scamming and Ripping Off Consumers
DealDash has faced criticism and accusations from users who feel they have been scammed or ripped off. Some users have claimed that they spent significant amounts of money on bids without winning any auctions.
They argue that this constitutes a waste of their investment in bids. It is important to note that participating in bidding auctions involves an inherent level of risk, as there can only be one winner per auction.
While DealDash aims to create a fair and transparent environment, users should be aware that winning is not guaranteed, and bidding involves both strategy and chance.
Conclusion
DealDash’s primary revenue stream stems from the sale of bids, with users purchasing bid packages to participate in auctions. Additionally, the platform generates revenue through referral fees earned from successful Buy It Now sales.
DealDash has also received investor funding to support its growth and ensure the improvement of its services. While DealDash has faced complaints and a class-action lawsuit regarding its marketing practices and bidding outcomes, users can mitigate risks by thoroughly researching the items they bid on and familiarizing themselves with the platform’s policies and terms.
In summary, DealDash is a pay-to-participate auction site that offers unique features such as Buy It Now & Get Your
Bids Back for Free, gamification elements, free shipping, and partnerships with trusted brands. The platform generates revenue through the sale of bids, referral fees from Buy It Now sales, and investor funding.
However, DealDash has faced criticism and a class-action lawsuit regarding its marketing practices and bidding outcomes. Users should exercise caution, research items before bidding, and familiarize themselves with the platform’s policies.
Despite the criticisms, DealDash continues to provide an engaging and competitive auction experience for users looking to find great deals online.