MyCenterBid, formerly known as Bidify, urged its affiliates on July 10th to immediately spend money on credits, days before its penny auction platform was set to launch on July 19th. The company, which ceased US operations last year and relaunched in Europe, issued a direct warning to its network.
"DO NOT FALL IN THE WAITING TRAP," the company message stated. Executives pushed affiliates to maintain a minimum of 100 PV (points value) at all times. They insisted members buy "marketing bids" and "loyalty credits" without delay, even if they did not yet understand the full compensation plan. This communication effectively dropped any pretense of a retail-driven business model.
The standard theory for penny auction companies suggests customers buy bids and participate in auctions. This retail activity should fund the business. Affiliates would then earn commissions from these legitimate customer purchases.
Reality often differs. Since Zeek Rewards drew significant regulatory attention, many penny auction companies have faced the same issue: insufficient retail customers. The volume of genuine customer bids does not sustain the business model.
Instead, a closed loop typically forms. Affiliates buy bids and credits. These purchases then circulate as "commissions" among other affiliate accounts. New affiliates must be recruited constantly to keep this cycle active. The money flow eventually stops when the pool of new buyers runs out.
MyCenterBid's urgent message bypassed typical marketing language. With no operational auctions to prove its legitimacy, the company could not maintain the fiction of a retail base. It needed cash immediately from its affiliate network, not from future customers.
The language used in the internal communication reflects a standard multi-level marketing script. Instructions to "buy loyalty credits," "generate points value," "build your downline," and "teach others to do the same" serve one purpose. They aim to justify an immediate cash injection into the company.
The company even framed early spending as a "huge advantage" for affiliates. This setup benefits MyCenterBid's finances directly. It offers no inherent advantage to the individual affiliate, who buys credits for a non-existent retail platform.
MyCenterBid's move from the US to Europe last year pointed to efforts to avoid regulatory scrutiny. Its recent demand for affiliate cash before product launch indicates further reason for regulators to examine its operations closely.