Topic: [XCP] Adeally IPO Monday April 28 - page 2. (Read 5986 times)

Like I said, their business model was built around product listings which ultimately was their downfall. Our business model is based on sales of bid packs and drop shipping. We've built Buy It products into our 3 year projections. They didn't. So when they stopped screwing over their customers and offered the Buy It Now their model wasn't built to handle it. That's how we can offer it and not lose our shirt if we are constantly refunding bids back to customers choosing this option. It's the only sustainable model for growth year after year.

A good example of the 2 ways we could run our business model is in the link I provided to they excel file I made: http://adeal.ly/Npwja
EDIT: Disclaimer
This document does not represent our full financial projections. The 2 values that are represented in the totals are related to auction listings and ecommerce listings only. The accounting terminology was for in-house purposes because these values are static copies of in-house documents used to project the next 3 years of the Company as laid out in detail in the "Financials Section" of our Business Plan. G&A, payroll, overhead, etc. are not included in this document.

The top example is our growth projections with Buy It purchases built in. This shows roughly 50% revenue coming from Buy It purchases and 50% coming from Play Pack sales. The bottom example is our growth projections without Buy It purchases built in. It shows 90+% revenue coming from Play Pack sales and no number accounting for potential Buy It purchases.

The bottom example has 3x better revenue numbers and the Gross Margin numbers are close to 70%! compared to the 20%'s in the top example. Sounds best right? Not if we want to offer Buy It Now for our customers. If we're budgeting and projecting 70% margins when in actuality we should expect 20% margins we won't stay in business very long.

Now if I click that link you just provided about Swoopo I read:

Make every bid possible only using a valid wallet address that's visible on a blockchain.  Otherwise you are just a scam that's made even worse by pretending you are doing anything new.

None of the things you say actually prevent the 2 biggest cheats in penny bid sites: someone bidding on everything at a loss and chasing away every other bidder and insider bidding bots.  Using real wallets might improve this a little as people might get an idea of how human their opponents are, at least.

Grove City, hunh?

I've sent the contact E-mail a message for a request for personal meeting. I live 15mi from the address listed. For what its worth, I can verify this company and its legitimacy if I can schedule a meeting.

By "Play Packs," I assume you mean something like http://www.quibids.com ?  Just about everything you describe has already been done -- now mostly abandoned.  Adding crypto to the mix is just another marketing gimmick.

In short our business model revolves around bid pack sales (Play Packs) and drop shipping products. This is what separates us from the majority of other penny auction sites.  Everything below is also explained in the Business Plan

Play Packs cost zero to manufacture and zero to deliver. While our 3 year projection conservatively estimates 50% or so of our revenue from Play Pack sales we would multiply profit margins substantially as that number increases to as high as 90%. Drop shipping products takes the burden of inventory and staff, etc. from bogging down our profit. The majority of other penny auction sites instead develop a business model around product listings and in turn live or die by the number of customers bidding on the site and gross margin % between bid revenue and COGS. Ultimately, this is their downfall because people get bored and leave and sites relying on lots of customers that all of a sudden lose them close their doors shortly after.

2 examples of blown opportunities because of a faulty business model:
1) Penny Auction Solutions. Google it: Penny Auction Solutions
Their business plan: PDF
It was flawed from the start for a number of reasons (MLM) but the main reason was no safeguards in the beginning phases of existence and the business model revolved around product listings instead of bid pack sales.
They even got $10 million in funding (talk about crazy valuation with $0 sales!) via Kodiak Capital Group, LLC  They have zero to show for all of this less than 4 years later.

2) Swoopo. Arguably the pioneer of penny auction sites in 2008 and the biggest at the time of it's bankruptcy filing. "Overall, Swoopo operated a flawed business model as it relied on creating value (for itself and the 1% of winners) at the expense of the majority of its customers.  For more on this, check out http://t.co/O78595H"

We feel like this is our successful business model that will separate us from many other companies operating in this environment and provide stable growth year after year. It's the only sustainable model in this industry.

Yes, back in 2011 anyone could open up a penny auction site and they were very lucrative. Unfortunately, the history of companies in this industry is littered with questionably operators and unethical bidding practices. The past 3 years has seen upwards of 2000 "penny auction" sites created and currently less than 200 operational. Do a web search for penny auctions and the terms "scam", "cheat" and many more litter the page results. Customer complaints are mostly valid relating to deceased sites and even some still in operation. While Adeally does use the same auction platform as these sites it is much more than “just another penny auction site.”

Buy-It-Now
One game-changer the helped right the ship if you will was the creation of the Buy It Now option. Adeally will have this on every auction and it's explained in depth in the Business Plan. Essentially it's available to losers of auctions as a way to get their bids back and have a good experience on the site. Before this innovation was created the industry had a bad reputation and customers were rightfully pissed off because they didn't win anything and lost money to boot! Still, more than half the other penny auction sites out there do not offer this option to their customers.

As explained in our Business Plan regarding our 3 year projections, we ran 120 scenarios over 3+ years to determine our phased growth numbers. Below is an example of our numbers 1) disregarding the Buy It option and our customer's feelings and 2) our numbers with Buy It factored in and our customer experience.

http://adeal.ly/Npwja This is an excel file.
EDIT: Disclaimer
This document does not represent our full financial projections. The 2 values that are represented in the totals are related to auction listings and ecommerce listings only. The accounting terminology was for in-house purposes because these values are static copies of in-house documents used to project the next 3 years of the Company as laid out in detail in the "Financials Section" of our Business Plan. G&A, payroll, overhead, etc. are not included in this document.

Compare the Total Revenue numbers for each year above and below and you can see how lucrative this business model can become with shady operators. Every investor would love to earn 3 x more profit every year, but we kept ourselves grounded in a conservative phased growth model explained in detail in the Business Plan.



Here's more on how we're different from the majority of other penny auction sites:

Dual selling platform: conventional ecommerce and online auction platforms
While 100% of penny auction sites do penny auctions, only a few also have an integrated ecommerce platform. Adeally will have both. We realize that a good portion of our customers could care less about the gaming mechanics and social rewards we will build into the site. They just want to buy a product at the best price out there and get free shipping. We get it. So all of our products are available for purchase directly using our Buy It option.

Fulfillment
A large portion of other penny auctions carry inventory of at least gift cards and sometimes smaller electronics and such. That adds extra costs on the company. Adeally will carry zero (0%) inventory, instead relying on our network of distributors to provide fulfillment services. Only about 20% of our products will be from other B2B partners like Amazon or Best Buy. If we list Apple products or Precious Metals or Mining Equipment we'll form partnerships with companies to list their products on our site and the prices we list will be identical to the Apple product on bestbuy.com. 50% will be from our wholesale distributors and our prices are competitive with Amazon (which seller's are only making 5-10% over wholesale on most listings). The remaining 30% will be our Play Pack items which cost zero to make, zero to ship.

Safeguards
The majority of penny auction sites fail before they even get started because customers bleed them dry. They are at the mercy of aggressive bidding clans without a large customer base, which a site just starting doesn't have. Without proper safeguards in place before launch they might as well not start. Without the safeguards listed in our Business Plan and below we just might as well not even start. We wouldn't if we didn't develop these during our business creation stage. Every Adeally auction will have these safeguards.

Lockout Auctions - JUMPING - Prevents the tactic of a customer waiting until rest of the bidders have exhausted their bids and "jumping" in with a single bid to win the product.

2% Retail Reserve Price - TAGGING - Prevents the tactic of 1 customer placing the first bid (tagging) and all of their friends agreeing not to bid on the product.

Scrambled user names - COLLUSION, TAGGING - Prevents the tactic of a group of bidders forcing out other bidders and then stopping their bids so one of them wins.


Smart Currency
The Company is also partnering with Counterparty to make our on-site currency (bids) “smart”. Customers will be able to take their unspent bids off the adeally.com site and trade them for other things within the Counterparty marketplace. This is a first of its kind concept for our industry and a huge value to our customers that want to take their bought virtual goods (bids) to other vendors.

We are very excite about this because it's revolutionary in the industry. No other penny auction site, ecommerce site, online auction site has a site currency that can be taken off the site by the rightful owners, the customers. Typically it has to be abandoned if the customer doesn't want to shop there anymore. With Counterparty assets we can integrate our bids (Plays and Tokens) into the system and allow customers to leave with it if they are done shopping.

Plays we will sell on site and within Counterwallet. Tokens we will give away as rewards on site and within Counterwallet. They both have a $0.55 nominal value to start but can now be open to the free market.

Plays (paid bids) - http://www.blockscan.com/assetInfo.aspx?q=PLAYS
Tokens (reward bids) - http://www.blockscan.com/assetInfo.aspx?q=TOKENS

Hahahahaha - yes, I know the valuation was arbitrarily determined by your management.

At least you're honest that you're completely pulling your valuation and share pricing out of your ass.

How will your busineess differ from other penny auction sites, like http://www.ibid2save.com ?
Sounds real 2011...


http://www.google.com/trends/explore#q=penny%20auction%20

No.  It is not a 2-way street.  You have no mechanism in place to limit your offering to qualified investors, and thus are running afoul of relevant regulations.





This is another word for community involvement or anything socially related. For example:
- Integrating chat functions through Facebook or Twitter within each product auction listing.
- Reward systems involving sharing and posting via social networks

I like that "a party?". That would be great.