MLM penny auctions in 2023?

ToucanWin operates within the penny public sale MLM area of interest. The corporate doesn’t present a company handle on its web site.

Heading up ToucanWin are co-founders Kelley Foote (CEO) and Don Fiechter.

Kelley Foote seems to have made a reputation for himself in Bellamora again within the day.

Bellamora shut down in 2011, after which Foote spent practically a decade on numerous gaming ventures (non-gambling).

Don Fiechter doesn’t seem to have an MLM historical past. As an alternative he’s credit score with a thirty-two 12 months historical past within the gaming and on line casino trade.

ToucanWin doesn’t present a company handle on its web site. What we do know is, based mostly on their respective LinkedIn profiles, Foote and Fiechter are based mostly out of Missouri and Arizona respectively.

Foote’s LinkedIn profile represents ToucanWin was based in January 2022. The corporate doesn’t truly seem to have launched although till September to November 2022.

Learn on for a full overview of ToucanWin’s MLM alternative.

ToucanWin’s Merchandise

ToucanWin markets a penny public sale platform.

Bids to take part on the platform price $1 and will be bought in $10, $25, $50, $100, $250, $500 or $1000 packages.

Autoship “sensible bid” packages are additionally accessible in $50, $100 (10 bonus bids), $250 (35 bonus bids), $500 (75 bonus bids) and $1000 (200 bonus bids) packages.

Retail clients can bid free of charge, however they’re restricted to 1 free bid each 8 hours and should log in and click on a button to say the bid every time.

ToucanWin sells entry to an automatic bidder they name Mr. Pennyworth. Entry to the auto-bidder prices $9.99 a month or $80 yearly.

This charge is decreased to $4.99 a month if a $100 sensible bid autoship bundle is subscribed to. The charge is waived if a $250 sensible bid autoship bundle is subscribed to.

ToucanWin associates should buy bids and use these as advertising instruments. Be aware that any bids “gifted” to retail clients should be used inside 10 days, or they’re returned to the affiliate.

ToucanWin’s Compensation Plan

ToucanWin’s compensation plan combines direct referral commissions with bonus swimming pools.

Fee quantity is generated by penny public sale bid purchases by referred retail clients and recruited associates.

ToucanWin Affiliate Ranks

There are twelve affiliate ranks inside ToucanWin’s compensation pan.

Together with their respective qualification standards, they’re as follows:

1. Bidfluencer – enroll as a ToucanWin affiliate
2. Profitable Bidfluencer – refer 1 retail buyer or recruited affiliate who buys not less than 100 bids in 30 days, or refer 2 retail clients and/or recruited associates who collectively purchase not less than 150 bids in 30 days
3. Lively Profitable Bidfluencer – preserve Profitable Bidfluencer standards every month and purchase 50 private bids or promote 50 bids to referred retail clients or recruited associates
4. Lively Influential Bidlfuencer – proceed to purchase or refer 50 bids a month, and refer not less than 50 retail clients and/or recruited affiliate who collectively are buying not less than 600 bids a month, or refer not less than 2 retail clients and/or recruited associates who collectively are buying not less than 1200 bids a month
5. Motivating Bidfluencer – proceed to purchase or refer 50 bids a month, and refer not less than 35 retail clients and/or recruited affiliate who collectively are buying not less than 1600 bids a month, or personally refer not less than 4 retail clients and/or recruited associates and be producing not less than 5000 bid purchases a month from a complete downline of not less than 10 bidders (max 60% counted from anyone unilevel group leg)
6. Mentor Bidfluencer – proceed to purchase or refer 50 bids a month, and refer not less than 25 retail clients and/or recruited affiliate who collectively are buying not less than 3000 bids a month, or personally refer not less than 6 retail clients and/or recruited associates and be producing not less than 15,000 bid purchases a month from a complete downline of not less than 100 bidders (max 60% counted from anyone unilevel group leg)
7. Nationwide Bidfluencer – purchase or refer 100 bids a month, and refer not less than 60 retail clients and/or recruited affiliate who collectively are buying not less than 8000 bids a month, or personally refer not less than 8 retail clients and/or recruited associates and be producing not less than 50,000 bid purchases a month from a complete downline of not less than 350 bidders (max 60% counted from anyone unilevel group leg)
8. Nationwide Mogul Bidfluencer – proceed to purchase or refer 100 bids a month, and refer not less than 120 retail clients and/or recruited affiliate who collectively are buying not less than 15,000 bids a month, or personally refer not less than 12 retail clients and/or recruited associates and be producing not less than 100,000 bid purchases a month from a complete downline of not less than 700 bidders (max 40% counted from anyone unilevel group leg)
9. Worldwide Bidfluencer – proceed to purchase or refer 100 bids a month, and refer not less than 240 retail clients and/or recruited affiliate who collectively are buying not less than 30,000 bids a month, or personally refer not less than 15 retail clients and/or recruited associates and be producing not less than 250,000 bid purchases a month from a complete downline of not less than 2000 bidders (max 30% counted from anyone unilevel group leg)
10. Worldwide Mogul Bidfluencer – qualification standards not offered
11. World Bidfluencer – qualification standards not offered
12. World Mogul Bidfluencer – qualification standards not offered

A unilevel compensation construction locations an affiliate on the high of a unilevel group, with each personally recruited affiliate positioned immediately beneath them (stage 1):

If any stage 1 associates recruit new associates, they’re positioned on stage 2 of the unique affiliate’s unilevel group.

If any stage 2 associates recruit new associates, they’re positioned on stage 3 and so forth and so forth down a theoretical infinite variety of ranges.

Direct Referrals

ToucanWin associates earn a ten% fee on bids bought by personally referred clients and recruited associates.

ToucanWin associates who pay $39.95 for ToucanWin College obtain a 20% referral fee charge.

Residual Commissions

ToucanWin claims it divides 50% of weekly generated bid sale internet income into ten Bonus Swimming pools.

These Bonus Swimming pools correspond with ToucanWin’s affiliate ranks:

1. Lively Profitable Bidfluencer Pool – 20% of the Bonus Pool, shared equally amongst Lively Profitable Bidfluencers
2. Lively Influential Bidfluencer Pool – 20% of the Bonus Pool, shared equally amongst Lively Influential Bidfluencers
3. Motivating Bidfluencer Pool – 15% of the Bonus Pool, shared equally amongst Motivating Bidfluencers
4. Mentor Bidfluencer Pool – 10% of the Bonus Pool, shared equally amongst Mentor Bidfluencers
5. Nationwide Bidfluencer Pool – 10% of the Bonus Pool, shared equally amongst Nationwide Bidfluencers
6. Nationwide Mogul Bidfluencer Pool – 10% of the Bonus Pool, shared equally amongst Nationwide Mogul Bidfluencers
7. Worldwide Bidfluencer – 5% of the Bonus Pool, shared equally amongst Worldwide Bidfluencers
8. Worldwide Mogul Bidfluencer – 4% of the Bonus Pool, shared equally amongst Worldwide Mogul Bidfluencers
9. World Bidfluencer – 3% of the Bonus Pool, shared equally amongst World Bidfluencers
10. World Mogul Bidfluencer – 2% of the Bonus Pool, shared equally amongst World Mogul Bidfluencers

Be aware that the above percentages (which I double checked) come to 99%. It’s unclear the place the remaining 1% from the Bonus Pool goes.

Additionally observe that whereas the Bonus Pool are calculated weekly, they’re paid out quarterly. Rank should be maintained for all three months of the quarter to obtain the Bonus Pool at any certified for rank.

Peak Performer Month-to-month Bonus

The Peak Performer Month-to-month Bonus is made up of 5% of ToucanWin’s firm large bid buy quantity every month.

To qualify for the Peak Performer Month-to-month Bonus, a ToucanWin affiliate should be within the high 20 for bid gross sales that month.

Public sale Commissions

ToucanWin associates and retail clients can promote merchandise on the corporate’s penny public sale platform:

• $500 to public sale as much as ten objects per 30 days.
• $1000 to public sale as much as 25 objects per 30 days
•  $3000 to public sale as much as 100 objects per 30 days

Public sale commissions on offered objects are paid as the worth the public sale closes at plus 30% of whole bid income spent.

A 20% match of the 30% bid income paid to the auctioning buyer/affiliate is paid to the affiliate who referred/recruited them.

Becoming a member of ToucanWin

ToucanWin affiliate membership is free. Free associates earn decreased referral commissions solely.

Full participation in ToucanWin’s MLM alternative prices $39.95 yearly.

ToucanWin refers to paid affiliate membership as “ToucanWin College”. This corresponds with some coaching associates have to take a seat by way of.

ToucanWin Conclusion

MLM penny auctions had been a factor round 2010. As soon as individuals realized they had been a horrendous enterprise mannequin for shoppers, they then promptly died off.

The schtick behind penny auctions is the prospect to win an merchandise for a ridiculously low value.

Take for instance this ToucanWin public sale for a 3 bed room two story home in California, at the moment sitting at $30.62 with 22 minutes left on the clock.

Sounds engaging, doesn’t it?

Whereas there are variations of the penny public sale mannequin, the everyday mannequin sees auctions begin at $0.01 with a timer. Bids improve the worth by $0.01 (a penny) and in addition improve the timer (ToucanWin seems to make use of 15 to 25 seconds per bid positioned).

Regardless of the remaining value is when the timer runs out is what the merchandise is offered for.

ToucanWin provides a reserve value to this mannequin.

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 rationalization is introduced on ToucanWin’s web site.

Of the 80 reside penny auctions at the moment on ToucanWin’s platform (hosted on “auctionstoucanwin.com”), none had reached their reserve at time of publication.

A lot for getting a Californian home for $30. When the twenty-minute timer counted all the way down to zero, it reset again to 24 hours. What number of days that public sale has been sitting there’s unclear.

Mentioned home is listed as having a retail worth of $1,599,000. If we divide that by 100 to get a “rule of thumb” reserve value, we get $15,990.

A $1,599,000 home for $15,990 nonetheless appears like a steal, however the satan is within the anti-consumer math behind penny auctions.

Every bid positioned on ToucanWin prices $1 and raises the worth of an public sale by $0.01.

To go from $0.01 to $15,990 requires placement of 1,599,000. And would you have a look at that, we’re again to the $1,599,000 retail value.

If the home offered at public sale for $15,990, $1,599,000 was spent on bids however just one particular person received the home. The opposite shoppers taking part within the public sale collectively misplaced $1,599,000 minus regardless of the successful bidder spent on bids.

And there’s no finish to what number of instances this could occur, or the losses shoppers can accrue over time (they’re losses as a result of dropping a penny public sale leaves you with nothing).

The place issues get much more anti-consumer is when an bidding continues above the set reserve. At $15,990 you’re simply shy of 1.6 million bids having been positioned. Statistically that’s lots of people with a vested curiosity to maintain bidding, and that is the place sunk price fallacy kicks in.

Because the public sale value rises past the reserve, an increasing number of cash is misplaced. Ultimately just one bidder wins the prize. Everybody else taking part loses cash.

And that’s only one public sale.

To additional illustrate the anti-consumer math behind penny auctions, that is from considered one of ToucanWin’s personal advertising movies;

Think about some fortunate particular person wins a $100,000 sports activities automotive for $11,000.

Every penny bid is the same as $1. So $11,000 in penny bids truly generates $1,100,000 in whole income for ToucanWin.

ToucanWin purchases the sports activities automotive for $100,000. So the online income for the public sale is $1,000,000.

Did you catch that?

$1 million in client losses in order that one particular person wins a $100,000 automotive.

Maybe essentially the most well-known MLM penny public sale is Zeek Rewards, launched in 2011. The penny public sale mannequin was so unattractive that Zeek Rewards solely used the mannequin to market a Ponzi scheme.

Right here’s one thing I didn’t embrace within the introduction of this overview, pertaining to ToucanWin co-founder CEO and Kelley Foote:

Foote started 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 Coaching Director later that very same month.

Foote being concerned in Zeek Rewards on the government stage doesn’t come as a shock. To be clear: ToucanWin isn’t a Ponzi scheme – nevertheless it’s fairly apparent Foote is making an attempt to relive the glory days.

Zeek Rewards rising as massive because it did (a $600 million Ponzi now appears comparatively small in a post-crypto Ponzi world), spawned off a bunch of clones. Some had been additionally Ponzi schemes however many weren’t.

None of these enterprise lasted lengthy – as a result of penny auctions are horrible for shoppers. Zeek Rewards itself would have been a short-lived flop if it wasn’t for the Ponzi scheme, the penny public sale facet of the enterprise by no means took off.

Placing apart Foote’s involvement in one of the crucial infamous MLM Ponzi schemes of all time, the takeaway right here is that point and time once more we’ve seen, from a retail perspective, that MLM penny auctions aren’t viable.

That’s a significant drawback when the legitimacy of your MLM firm hinges on promoting bids to retail clients.

ToucanWin doesn’t make any distinction between bids bought by retail clients and recruited associates. Maintaining in thoughts how anti-consumer penny auctions are, this paves the way in which for a pyramid scheme.

If the vast majority of bids bought by way of ToucanWin are being bought by associates (no matter what they do with them), ToucanWin is working a pyramid scheme.

Given the dearth of exercise on the corporate’s listed eighty auctions, I’m fairly assured that’s what’s occurring.

SimilarWeb tracked 7200 visits to ToucanWin’s MLM advertising web site in January 2023 (down from 31,500 visits in December 2022).

Site visitors to ToucanWin’s public sale web site isn’t excessive sufficient for SimilarWeb to trace (lower than 5000 visits a month).

If ToucanWin had a wholesome retail buyer base, this might be the opposite manner round.

The maths behind MLM pyramid schemes ensures that once they collapse, the vast majority of individuals lose cash.