Hitting Reset On Online Auctions with DealDash

Online auctions have evolved since the early days of eBay. The most popular complaint about them?

The waiting. Since eBay auctions oftentimes span days — not all items have a “buy-it-now button” — bidding on goods on the web can, in certain circumstances, require near monastic levels of patience.

Given that one of the mainstay complaints about the 1.0 version was pacing, it’s not entirely surprising that the 2.0 version has been dominated by the so-called “penny auction site.”

Even consumers who have never set a digital foot inside a penny auction have likely seen advertisements for them, particularly in the late-night hours. Apple laptops for under $300, leather jackets for $50 — the value proposition is nothing if not direct: Come, bid on prices that go up a penny at a time and net amazing savings on luxury goods for a fraction of the cost.

If it sounds too good to be true, well, that’s actually a common complaint about these sites from consumer advocates. Unlike a regular eBay auction, penny auction participants pay for their bids — anywhere from $0.50 to $1.00 each. Customers can buy packets of bids to throw at auctions (at the end, the winner is the person who put in the last bid), and they get to purchase the item at whatever discounted rate on which the auction ended.

Everyone else is just out of bids and the funds they spent participating in the auction.

Except consumer advocates would say the previous sentence was phrased poorly: Consumers don’t participate in these auctions so much as they play in them; these acts of “commerce” are really much more like a gambling experience than actual shopping.

The team at DealDash doesn’t agree — though they readily admit they offer a highly gamified commerce experience. Unlike other players in the space, they’re sympathetic to the complaint, however. Games have winners and losers, and people don’t like losing — or paying to lose.

In a conversation about the guardrails they have added to their platform to keep the commerce focus front and center, DealDash noted that part of the inspiration for the company was a bad experience on a different penny auction site where their founder ended up spending $50 only to not win a new laptop.

“The only thing that money bought him was a bad taste in his mouth,” a company representative told PYMNTS.

But it also left him with an idea for how to do it better with some basic upgrades to the model.

Building Better Guardrails

Gamified commerce is fun, DealDash admitted. However, commerce that actually feels like a casino — where randomness rules — is not actually fun for consumers. People, first and foremost, come to the site seeking goods, looking for reasonable savings and a chance to use a somewhat novel method of netting those savings.

The goal, DealDash noted, is to keep that commerce experience at the forefront.

That means consumers who participate in an auction have to be in on the ground floor — or within the first 300 or so bids (auctions cap at $3.00) — to prevent the popular practice of “jumping” on penny auction sites, where shoppers wait out the early rounds of an auction and save their bids for the end, when they count most.

The site has a “buy-it-now” option of its own that allows the bidder to purchase the good outright, usually for a discount of the retail price, though admittedly not nearly as dramatic as the 75 percent off cuts one tends to see advertised.

Consumers who elect to buy immediately also get their bids refunded — free to be used on other auctions on the site.

DealDash also make it easy for customers to try it out and opt out if they don’t end up enjoying the experience.

“We understand that the pay-to-participate model may not be for everyone. This is why we offer a full money-back guarantee on the first bid pack. If a customer is not satisfied with their DealDash shopping experience, we’ll be happy to refund their first bid pack purchase (within 90 days of purchase), no questions asked. They can even keep the bids in their account and any items they may have won,” a spokesperson said.

The Customer Obsession

The goal for DealDash has always been pretty simple: give customers good stuff at a great price and a fun way to buy it.

To make sure they deliver on that goal, the firm constantly checks in with their customer base, taking the temperature on what they both want and need.

“Every single employee who works at DealDash (be it a developer, a marketer or the CEO) has a phone call with at least one customer every week. During these conversations, DealDash team members gather information on the users’ experience and how it can be improved,” the firm’s spokesman noted.