QuiBids Quarterly Q4 2012

Vol. 1, No. 2

December 2012

www.QuiBids.com

QuiBids Quarterly A DEDICATION TO BETTER BUSINESS

PHOTO BY MATT CARNEY

Former Oklahoma Attorney General Drew Edmondson poses for a photo with QuiBids’ General Counsel Ashley Smith and Chief Financial Officer Jeff Geurts (left to right) at the Torch Awards Thursday, November 8.

QuiBids sponsored the awards on behalf of the Better Business Bureau Serving Central Oklahoma, and Edmondson spoke about the state’s need for ethically conscious business practice.

A conversation with an online auction expert

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NICK BOCCIO

ick Boccio first got into bidding on penny auction sites in 2009, an interest that grew into a full-blown hobby when he started PennyBurners.com later that year.

PennyBurners filled the role of an industry advocacy blog during a particularly rough stretch of time for penny auctions, which underwent

aggressive scrutiny and often misinformed criticism from media outlets across the board.

The blog maintained the most consistent stream of penny auction-related content on the web and drew hundreds of penny auction enthusiasts into its forums each day.

With fewer penny auctions starting up these days, Penny-

Burners isn’t as active as it once was, but in its heyday Boccio was constantly announcing new auction sites, promotions, and site closures, publishing interviews with penny auction owners, warning customers against instances of bid collusion or bot bidding, and even Our interview with Nick Boccio continues on page 2

Hear about QuiBids’ latest site features from CEO Matt Beckham on page 6

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An online auction expert Continued from page 1

occasionally calling out fraudulent business tactics. He’s since parlayed his years of correspondence with hundreds of site owners into consulting services for prospective penny auctioneers.

We called Boccio to discuss penny auctions’ history with the media and how QuiBids changed the game.

QuiBids: Let’s start with the first penny auction site, the German-owned Swoopo (which changed its name from Telebid when it debuted in America). Tell me about the influence it had on the penny auction industry.

Boccio: Swoopo started out before I got into penny auctions, so around October 2009 it was the biggest at the time, but it wasn’t the most exciting.

There were a lot of other penny auctions trying new things and had better things to offer their bidders. Many people kind of forgot about Swoopo, even though it was the biggest.

QuiBids: So in 2009, you decided to go full-steam with your blog as a resource for the industry and for customers.

Boccio: We’re advocates for the industry, so I’m happy if people call and say, “Hey Nick, what’s this penny auction thing all about?” and if I have an hour, I will tell them everything they need to know. I just want to be an advocate for the industry.

QuiBids: Can you estimate how many have closed between the height of penny auction sites starting up and now?

Boccio: Yeah, 99% — and it’s probably more than that. Within 90 days, there’s almost the guarantee of failure. I’ve spoken with 200-plus penny auction site owners over the last three years. Every one of them,

with several exceptions, have failed.

The exceptions would obviously be QuiBids, Beezid and SkoreIt. [Editor’s note: Beezid merged with SkoreIt in October not long after this interview was conducted.] The majority of penny auctions failed because of a lack of business knowledge.

that laws were being broken a dozen times.

I don’t think that happens often and the laws that are normally broken concern shilling, but some people will try to get the consumer protection agencies involved when items they won weren’t being shipped.

QuiBids completely changed everything. I really believe that. QuiBids quickly became the standard for what a penny auction ought to be, in that the value returned to the customer was much higher than all the other penny auction sites, and the risk was lower because everything had a Buy Now.

QuiBids: When was public opinion of the word “penny auction” at its lowest?

Boccio: That’s going to be mid2010 to about March of 2011. That’s when popular opinion was definitely the lowest, and that was due to several misinformed news articles and stories on penny auctions that were syndicated throughout the country.

One of the biggest things that happened with penny auctions was the influx of bid pack purchases up front.

Most [penny auction sites] looked at those as a windfall but in reality, they’re more like store gift cards. You buy a $100 gift card at Best Buy, but Best Buy doesn’t pocket that $100.

It sets the money aside until you exchange that card for goods. Penny auction bids are a service, and until the user uses those bids, they’re still outstanding; they can still win items with those. In this case, bids are a liability.

QuiBids: Of all those businesses that failed, can you estimate how many resorted to doing business unethically or illegally?

Boccio: If I know somebody is breaking the law, I contact the authorities, and I’ve done it in the past.

I’ve personally either wrote a letter or contacted consumer protection or the secretary of state for the state the business is in on five or six occasions.

I’ve directed other people who’ve felt

QuiBids: What were the reporters missing in their coverage?

Boccio: Well, the reason the reporters think something wrong is happening is because they’re comparing penny auctions to eBay. That was their first mistake. They looked at eBay — which doesn’t add time after every bid is placed — and compare that to what penny auctions do and conclude that penny auctions are wrong. But anybody who’s been to any sort of auction knows that that’s just how they work.

The next big thing was the distrust with these anonymous websites. eBay’s really big. You feel secure with big things. So it’s easy to make a bad guy out of somebody you don’t know.

QuiBids: How much of a gamechanger for the industry was it when QuiBids came along offering the Buy Now feature across all its auctions?

Boccio: QuiBids completely changed everything. I really believe that. QuiBids quickly became the Our interview with Nick Boccio continues on page 3

December 2012

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QuiBids completes second audit B

uilding trust with your customers used to mean lookQuiBids' claims tested by Grant Thornton ing them in the eye when you shook We maintain effective controls to provide The Online Entertainment Retail their hand. While digital transaction reasonable assurance of the following: Auctions website displays to cusseems to have antiquated such pretomers through the “check-out” Internet traditions, the need for trust Bids are placed by bona fide page the only charges they will incur. users and do not manipulate the between a business and its customers bidding process to inflate the bid Customers are informed that hasn’t deteriorated. In fact, it’s more price or affect who wins the auction (i.e., QuiBids will not request customer necessary than ever before. no use of bots, shill bidding, or bidding by password information other than As an online-only retailer, QuiBids’ QuiBids employees). during the registration, login, and passrapport with customers didn’t come word change processes.

Winning auctions and “Buy Now” easy, said Josh Walker, QuiBids’ Direcorders are fulfilled (i.e., shipped).

The confidentiality of QuiBids’ tor of Customer Support. customer’s data is protected.

“The biggest challenge is getting past the initial skepticism many cusCustomers are provided with the tomers experience from inaccurate “Buy Now” option for at least Bids are processed in the order two hours after the end of each received (i.e., “first in, first out”) information they come across,” Walkauction, allowing them to purchase the without the element of chance. er said. “So we do our best to make item with a discount based upon the real ourselves available to them, to take bids they used in the auction for that item.

Read the complete report at www.QuiBids.com the time to educate them about how the site works.”

After the company’s A-minus Better Business Bureau rating, two of the things QuiBids CusWithout an education in computer programming, how is tomer Support representatives most commonly point out a customer supposed to know a legitimate auction opponent to skeptical customers are its Grant Thornton audits. The from an algorithm directed to drive up the auction price?

London-based independent assurance firm completed its “Many customers question the legitimacy of this type of second annual audit of the assertions made by QuiBids’ company when it comes to shipment and bids placed, and management in September, concluding that the company they should; it’s their money,” Walker said. “Being able to “maintains effective controls to provide reasonable assur- provide an unbiased, professional opinion from a thirdance” of seven promises QuiBids makes to its customers. party is invaluable to our business.”

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A conversation with an online auction expert Continued from page 2

standard for what a penny auction ought to be, in that the value returned to the customer was much higher than all the other penny auction sites, and the risk was lower because everything had a Buy Now. I would expand on that by also saying that — from a business standpoint — QuiBids really wrote the book on how to make a successful penny auction site with its aggressive online and national media advertising campaigns.

When QuiBids opened and everything had a Buy Now, you saw a lot of other sites copying that. Swoopo was doing Buy Nows on some of its auctions, and some sites have popped up and already died off that were also trying to adopt the same model, with the 100% Buy Now. QuiBids: Do you think QuiBids is justified in choosing the name “entertainment retail auction” to differentiate from the less desirable term “penny auction”?

Boccio: Of course. Penny auctions didn’t have a fair first shot.

If QuiBids didn’t separate itself in terminology, then every time people look up information about penny auctions to learn about QuiBids, they’d get negative search results.

It’s not productive because QuiBids isn’t all the other penny auctions and QuiBids is really the model of what everybody else should be doing. So it was a smart move to differentiate the terminology.

This interview with Nick Boccio has been edited to fit the format of this newsletter.

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December 2012

QuiBids in the Community

Friends and Fun! T

PHOTOS BY ERIK GAUSE

Compliance Manager Nader Nassar spent his afternoon timing races on the inflatable obstacle course. Of the estimated 500 people served dinner at the block party, many of them were children.

he OKC City Rescue Mission accommodated services to an estimated 410 homeless and near-homeless people per day last year, encompassing medical care, shelter, food and social services.

It is the Mission’s goal to not only serve the city’s homeless populations’ needs, but to do so with empathy. So we were honored when the Mission invited our employees to help celebrate the opening of its new Food Resource Center in September by hosting a block party for its clients.

We painted faces, set up for a band to play, threw footballs, and otherwise got to make some new friends at the Mission!

ABOVE: The Impact Hunger Food Resource Center will be able to help provide 1.2 million more free meals.

RIGHT: Two QuiBids employees, Mark Moderie (left) and Marshall Welke, smile in between turns at tossing the football with some City Rescue Mission clients.

Compliance Representative Alyse Cox flexes her artistic muscles by painting a young girl’s face at the block party.

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Members of the Oklahoma City Thunder Drummers pose for a photo with the younger members of Team Tucker before the 2012 Walk for Wishes at the Oklahoma City Zoo. PHOTOS BY MATT CARNEY

Fun and fundraising at the zoo!

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uiBids had the privilege of presenting the Oklahoma MakeA-Wish Foundation’s second annual Walk for Wishes at the Oklahoma City Zoo in November, and we’re excited to announce participants raised more than $35,000 that went straight to the Foundation’s mission to grant wishes for Oklahoma children who face lifethreatening illnesses.

More than 700 people gathered together in teams to participate in this year’s walk, many of them named for Make-A-Wish-sponsored children.

That’s about 300 more participants and $15,000 more raised than last year’s inaugural Walk.

Participants arrived as early as 6:30 a.m. , so we provided the necessary coffee, bagels and games for the kids

— and grown-ups with no fear of hula hoops — to play when they returned from their morning walk through the zoo. The Oklahoma City Thunder cheerleaders and drumline were around, too, and the OKCPD Bomb Squad showed interested parties some of the equipment they use on the job.

ABOVE: Sara Howell, Claire Turmelle, and Meike Parker (left to right) pose for a quick photo after setting up a booth at the Walk for Wishes.

LEFT: Team Bailey was one of the largest groups at this year’s Walk for Wishes. They posed for this photo before the event began.

PLACE POSTAGE HERE

4 NE 10th St., Ste. 242 Oklahoma City, OK 73104

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December 2012

A letter from the CEO A

traditional retail op- customer value proposition was always in tion. We’ve expanded and the cards for QuiBids. De- improved that proposition spite establishing our com- more in the last six months pany on a relatively new than in the first two and model that ata half years of tracted customers business. If Quilooking for the fun Bids 1.0 was an of scoring enorold black-andmous deals, we’ve white TV, then long been planthe site now ning more ways to looks more like retain them afterone of the highward. definition plasma In the early screens we sell.

MATT goings of our In addition to BECKHAM company we realredesigning the ized that — in an industry website in June, we recentas competitive as ours — ly opened up the QuiBids our growth was integrally Store, a place where custombound to the quality of our ers earn Voucher Bids for

purchasing products at retail pricing. Customers can read and publish their own product reviews, and our improved auction format now allows them to choose from tens of thousands of products at any given time, instead of just a few hundred. All these improvements have fundamentally expanded what we offer to customers without sacrificing any of the original thrill that enticed them to shop with us in the first place.

So to answer anybody who thinks that QuiBids is using its new Store function to imitate traditional retailers: Nope! We’re just trying

Get in touch with QuiBids! www.QuiBids.com (405) 253-3883 4 NE 10th St., Ste. 242 Oklahoma City, OK 73104 Jill Farrand Public Relations Director jfarrand@quibids.com

to improve on what we do best, and that’s giving people the most fun way to shop for what they want online.