Vicesus, a penny auction platform, launched in August 2012. The company announced its closure again in October 2013, citing insufficient retail activity. Vicesus released a statement saying, "We are sorry to announce that the Grand Opening will be postponing. The Main reason is the low activity. We have now tried to do it with affiliates as the main driving force to get custumers to the auction, this hasn’t worked."
Vicesus admitted its affiliate-driven strategy for generating retail activity failed. The company stated it would now focus on generating retail activity itself. This raised questions about the role of MLM affiliates, who primarily deposited money into the scheme rather than attracting new customers. Their function in Vicesus's marketing strategy remained unclear.
The company pressed on, announcing a new customer generation strategy in an email to affiliates. The message, sent in late November 2013, designated Friday, November 29, 2013, as the start date for "regular auctions" on its Bidwith.me platform. "You will no longer have to wait for auctions to take place," the email stated. "We will have a lot of excisting prizes for our Customers and Affiliates."
Vicesus also detailed an important improvement: the introduction of reserve prices on auctions. This feature allows the company to set a minimum threshold of bids that must be met before an item can be won. This change, according to Vicesus, aims to make the business profitable and ensure affiliates earn money.
The company explained the reserve price using an example. For a $600 iPad, with bids valued at $0.60 each, Vicesus would require 1,000 bids to cover the purchase price. This means an auction could end at a winning bid price of only $10, yet Vicesus would still guarantee not to lose money. The winning customer, under this system, could receive up to a 95% discount compared to the suggested retail price.
This new reserve price mechanism ensures Vicesus maintains profitability on each auction, irrespective of the final winning bid.