DealDash

DealDash
Type Private
Founded February 22, 2009 (2009-02-22)
Headquarters Minneapolis, Minnesota, United States and Finland
Area served United States
Founder(s) William Wolfram
Industry E-Commerce
Products Online Bidding Fee Auction with "Buy It Now" option
Employees 65
Website Official website
Users 8 million

DealDash is an e-commerce company based in Minneapolis, Minnesota. The company was founded in February 2009 and operates the longest-running bidding-fee auction website in the United States. Having more than eight million registered users makes the company one of the largest providers of pay-to-participate auctions in the world.[1][2] In February 2012, DealDash obtained the domain name for Swoopo.com, previously occupied by a European-based, bidding-fee auction website, which had recently failed.

History

DealDash launched in the United States in February 2009 and has stayed in business longer than any other similar auction site and become one of the largest companies to operate in its field. Its unique selling proposition is that if a customer loses an auction they can purchase the item they were bidding at for a regular retail price and get a full refund of the bids placed in the auction, thus eliminating the risk that usually exists in pay-to-participate auctions.[1][2][3][4]

Founder William Wolfram started the company after losing $50 on an online penny auction site. DealDash added the “Buy it Now” feature to the bidding process where if the customer doesn't win the auction they have the option to get the item at retail price and get the bid credits used in the auction returned back to their account.[5][6]

According to Adweek and research from SocialBakers, for research covering the period May 1 until May 13, 2013, DealDash was the most talked about brand in the world on Facebook's "People Talking About This" metric.[7]

In August 2013, DealDash also created the site DealDashReviewed.com to house and aggregate reviews and testimonials from their customers.[8][9] In 2013, founder William Wolfram was the EY’s Entrepreneur of the Year Award national winner from Finland.[10] In 2014, DealDash was audited by Ernst & Young, confirming that all bids are placed by real customers and all items are delivered. During the summer of 2015, DealDash released their Native Mobile Apps for iOS and Android.[11]

Business Model

In order to participate, registered bidders must first buy Bids before entering into an auction. Bids cost 60¢,[12] unless on "sale" at the time. Bids are sold in lots (Bid Packs) varying in amounts from 100 to 1000 bids. Standard auctions begin with an opening price of $0.00 and every time someone bids the price increases by $0.01 and removes one paid "bid credit" (60¢) from the user's bid balance. The auction clock restarts from a maximum of 10 seconds every time a bid is placed. If no new bids are placed before the clock runs out, the last and highest bidder is declared the winner of the auction and owns the rights to purchase the auction item at the final sales price within 14 days of the auction ending.[13][14]

Bidders who are unsuccessful at winning an auction can choose to purchase the same auction item at retail price (“Buy it Now”) within 7 days of the auction ending and get back all the bids used in the auction for free. The price offered less any "discount" for the unsuccessful bids need not be competitive with the same item purchased elsewhere. Any unsuccessful bidder not using the option loses the value of the bids placed. A company spokesperson says DealDash generates significant business from bidders who choose to “Buy it Now”, with hundreds of orders processed daily.[15]

Bids can be placed in two ways. Bidders may choose to place single bids, which requires the person to be present on the site and manually click the bid button. Alternatively, Bidders can place bids through an automatic bidding tool called the "BidBuddy". Bidders can add the number of bids they want to place and click “Book a BidBuddy” from the auction page. Once a BidBuddy is active, it will automatically bid in the final seconds of the auction in an attempt to keep the bidder as the highest bidder as long as the bidder has bids left in their BidBuddy. Bidders can cancel or add bids to the BidBuddy at any time. If an auction is won using the BidBuddy, the unused remaining bids are returned to the bidder's account.[13][16]

Penny auction sites like DealDash have often been criticized for failing to disclose or include the cost of bids in what customers actually spend in total to win a product. In most cases, users spend substantial sums of money without winning anything if they choose not to use the “Buy it Now” feature to get their bids back.[17]

DealDash’s bidding system holds two patents. The first patent concerns their No Jumper™ auctions[18] a type of auction that makes winning easier, since new bidders can't enter the auction after $5.00. This means users don't have to compete with other bidders that didn't bid in the auction from the start, before the price reached $5.00.[19] The second patent was granted in regards to DealDash’s auction bid incentives based on time as highest bidder. Users gain levels by staying as the highest bidder of an auction.[20] Each second the user stays as the highest bidder fills one second in their level meter, and every certain amount of seconds bidders advance to the next level, getting a bid reward.

DealDash offers a 90 day money back guarantee on the first bid pack purchase and a winning guarantee. If a user does not win an auction with the first bid pack, DealDash will return the bids back to the user's account. If the customer is still not satisfied, the company will refund the first bid pack purchase.[21]

Finances and funding

According to a company announcement, the company was profitable in 2011 and closed a $1 million investment from venture capital firms and angel investors in the last days of December 2011.[22]

Reception

Dealdash has been covered in the media as a successful start-up business by Huffingtonpost, TrustPilot, SiteJabber and CNBC; as a provider of cheap shipping alternatives, and as an innovative idea for cost-saving.[23][24]

See also

References

  1. 1 2 "Deal Dash". CrunchBase. Retrieved August 21, 2012.
  2. 1 2 Laila Escartín-Sorjonen (June 14, 2012). "DealDash - Turning Shopping Into a Game". The Huffington Post. Retrieved August 21, 2012.
  3. ↑ "Dealdash Reviews – Is Dealdash.com Legit or a Scam?". Legit Auctions. Retrieved August 21, 2012.
  4. ↑ Lee, Amanda (April 2, 2010). "Bidray is Now DealDash.com". Penny Auction Watch. Retrieved August 21, 2012.
  5. ↑ "This 20-year-old's three-year-old startup did $44M in revenue last year". Pando. 21 March 2013. Retrieved 21 April 2016.
  6. ↑ "Our team".
  7. ↑ "Obscure Direct Response Brands Dominate Facebook Chatter". Adweek. Retrieved May 24, 2013.
  8. ↑ "DealDash Reviews". DealDash Reviews. DealDash. Retrieved September 30, 2014.
  9. ↑ "DealDashReviewed.com WhoIs". DomainTools. DomainTools. Retrieved September 30, 2014.
  10. ↑ "EY World Entrepreneur Of The Year 2015 highlights". Ernst & Young. 7 June 2015.
  11. ↑ "Auction Site DealDash Launches New Android, iOS Apps". 2 December 2015.
  12. ↑ "DealDash: How Does it Work?". DealDash. Retrieved 30 January 2016.
  13. 1 2 "Deal Dash - Frequently Asked Questions". DealDash. Retrieved August 21, 2012.
  14. ↑ Anderson, Greg (October 24, 2011). "DealDash Sees Explosion Of Growth". ArcticStartup. Retrieved August 21, 2012.
  15. ↑ Vilpponen, Antti (May 5, 2011). "Interview With William Wolfram, CEO of DealDash". ArcticStartup. Retrieved August 21, 2012.
  16. ↑ "DealDash terms of use". Retrieved December 9, 2013.
  17. ↑ McCarthy, John (February 6, 2011). "Penny auctions promise savings, overlook downsides". USA Today. Retrieved December 7, 2013.
  18. ↑ Restricting an auction to active bidders by excluding jumpers, Freshpatents.com
  19. ↑ "No Jumper™ Auctions".
  20. ↑ Auction bid incentives based on time as highest bidder, Freshpatents.com
  21. ↑ "Terms of use".
  22. ↑ Vilpponen, Antti (January 11, 2012). "DealDash Recruiting Talent With Strong Growth And $1M Investment". ArcticStartup. Retrieved August 21, 2012.
  23. ↑ Laila Escartín-Sorjonen (18 June 2012). "DealDash - Turning Shopping Into a Game". Huffingtonpost.
  24. ↑ "DealDash taking on penny auctions: CEO". CNBC. 6 June 2014.

External links

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