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Wednesday brought us some dramatic industry news — penny auction BidCactus is closing its doors for good.
The writing’s been on the wall for a few months now as:
- BidCactus’ BBB rating dropped to an F
- Multiple bidders posted here and emailed us with their complaints
- BidCactus refused to respond to our emails
- BidCactus’ social media channels went quiet
BidCactus has been a key player in the penny auction landscape since 2009. They quickly emerged as one of the industry power players alongside of QuiBids,Beezid, SkoreIt!, and Swoopo.
In 2010, BidCactus boldly established the Entertainment Auction Association (EAA), a self-proclaimed attempt to regulate and add credibility to the industry. BidCactus CEO Jeffrey Staw said that he was “thrilled to be a founding partner of the industry’s first governing body” and that he hoped “that other penny auction sites will adhere to the principles and guidelines the Entertainment Auction Association has set forth.”
The Association never really took off. In fact, some of the EAA’s members (Swoopo, BigDeal, Bidswap) went out of business rather quickly. Another barrier to the Association’s growth was a hefty application fee of $5,000.
To an outside viewer, the EAA seemed more like an attempt to corner the market and exclude smaller penny auction sites which already struggle to keep their doors open.
The EAA also listed Penny Auction Watch as board member, but Amanda Lee — the founder of Penny Auction Watch — posted a recent article that seems to suggest that penny auctions are destined to fail. Ms. Lee said that “Penny auction bidders have found ways to game the system and clean out penny auction startups and established sites.”
The fact that BidCactus started the Entertainment Auction Association — and made a big deal of their Code of Conduct — makes it all the more surprising that they would close their doors without doing right by their bidders.
There’s no doubt that the penny auction market is a complicated beast, but success appears to be possible for an elite few. QuiBids and Beezid are the two sites that continue to figure out ways to make it work. In recent years, Beezid has bought out or otherwise lured their competitors into merging (eg. SkoreIt!, BidBlink).
BidCactus’ recent struggles gave Beezid the opportunity to step in once again and grow their user base significantly.
The offer is significant — Beezid is encouraging BidCactus members to transfer their accounts for free AND giving them the ability to use any bids that were sitting in their BidCactus account.
This arrangement means an influx of new users at Beezid. To be fair, this offer helps former Bidcactus users, but it does not help current Beeziders who now have to compete against more bidders and more bids.
In a recent press release, Beezid’s CEO Max Bohbot said that “BidCactus members paid for these bids, and losing them puts the entire penny auction industry in a bad light…So we’ll honor every single bid, the same way we would if they had purchased them right here at Beezid.”
As you could imagine, Beezid has better analytics and insights to the industry than anyone here at the Penny Auction List. Some complicated programming would be required to make this transfer process seamless and logical.
Beezid’s willingness to invest this time and energy helps BidCactus bidders who were left out to dry, but it really serves as another strategic maneuver for one of the industry’s continued success stories.
It’s hard to say what the next few years will look like — but one thing’s for sure — Beezid is playing for keeps.