DealDash is a leading penny auction online platform based in the United States. William Wolfram founded it in February 2009.
It offers products for buyers through an online platform. The distinction of the platform is that the e-commerce platform works with the auction business model.
The business model of DealDash works on an online auction-to-win-the-item basis. Each product auction starts at $ 0.00, and with each participating bid, the price increases by $0.01.
The bid time is set for 10 seconds only. The highest bidder wins the item if there is no challenger for the ongoing bid. DealDash does not charge any subscription charges from the customers; moreover, the shipping for all items is free.
William Wolfram founded the penny auction site back in 2009 with a modest initial investment of $500,000. Today the platform has a user community of over 8 million.
The distinctive concept of DealDash is to offer a pay-to-participate customer experience, unlike other free auction sites.
Paying to participate in product bidding covers the product sale price and avoids spammers and fraudulent customers.
Shipping for purchased or won items is free of charge. The site also does not require any subscription fees from the customers.
Let’s glance at the company’s current profile before we analyze the company portfolio using the SWOT model in detail.
|Founded- In and At:||February 2009. Helsinki, Finland|
|Headquarters:||Finland and the United States|
|Business Model||Penny Auction Site|
|Product||Electronics, Fashion & Beauty, Home and kitchen tools.|
|Competitive Advantage||A Large Customer base of over 8 million users|
|Revenue||Undisclosed – Private Business Category|
|Competitors||Tophatter, Gixen, Pristine Auction.|
Here is a brief company profile of DealDash as of the year 2020.
Now let us discuss some business strengths, weaknesses, opportunities, and threats of DealDash.
A) Strengths of DealDash:
1) Business Model:
DealDash’s biggest strength remains its penny auction business model with a unique pay-to-participate bidding concept. Buyers must buy a standard pack of bidding rights before participating in any item auction. Each bid starts as low as $0.00 and processes with a bid on an incremental basis of 1 cent.
The bidding time is set at 10 seconds only, increasing the fair bidding chances exceptionally higher. The highest bidder wins the item.
2) Product Range:
DealDash offers a wide range of branded products, from household items to electronics, fashion and apparel, and even cars. Their product quality is higher, with inventory purchased directly from brands and liquidation merchants.
3) Large Customer Base:
DealDash enjoys a large customer base with approximately 8 million registered users. They enjoy a largely higher customer rating of above 4.5 out of 5.0 on popular review sites like sitejabber.com.
4) Brand Value:
DealDash is one of the long-serving penny auction sites founded in 2009. Since then, they have enjoyed high brand recognition among a large customer base.
They pioneered the online pay-to-participate auction business model, unlike free auction sites. With a business history of over a successful decade, DealDash is a highly regarded brand in the auction business world.
5) Unique Selling Point-USP:
Another Strong point of DealDash remains their money-back guarantee on the first bid to their customers. As the buyers need to buy the bids before participating in any item auction, it eliminates the risk of spam, bots, and artificial bidders.
The losing bidder can also buy the item by paying the full item price, which also returns the used bid balance.
6) House Rules:
Although DealDash offers an exciting and challenging auction business model, they set the house rules stricter. Not more than two participants from one house can participate in bidding.
A winner can have a maximum limit of up to 50 bids per week. No bidder can bid for the same won item within 30 days.
B) Weaknesses of DealDash:
1) Limited Geographical Presence:
Despite over a decade in the online auction business, the geographical reach for DealDash remains limited to the US customer base only. With an online e-commerce platform, the limited geographical presence presents its biggest weakness.
2) Marketing Plans:
DealDash also needs to make an aggressive and dynamic marketing plan. The platform offers limited marketing efforts, which poses a weakness as more competitors enter the same business.
For example, DealDash has a limited Twitter fan following with merely over 6,500 followers. Digital media and social media marketing weaknesses can be turned into useful strengths resulting in business lead generation.
3) After-Sale Services:
If there are any negative customer ratings about DealDash, they particularly are about the product quality and after-sale services.
The company can elaborate more on branded and liquidation quality products to avoid any dissatisfaction from the customers in the first place.
4) Static Website:
Although the DealDash website presents a clean and elegant business website, it can be modernized with a dynamic newer theme style.
A section of customer reviews and social feeds with an engaging blog section can enhance the company website’s outlook.
C) Opportunities for DealDash:
1) International Expansion:
DealDash looks well on the way for international expansion beyond the US geographical boundaries. The business has an established base of over a decade and a registered customer base of over 8 million users.
E-commerce platforms offer a readily available international customer reach.
For DealDash, taking the online auction platform to the international customer base presents an immense business opportunity.
The Southeast Asian and MENA regions, in particular, can be targeted as a large auction-based business market. The sale of liquidation inventory frequently takes place in these regions, offering a great business opportunity for an established brand like DealDash.
2) Wider Product Range:
DealDash offers a great variety of products as auction items. However, the company may include second-tier brands and include low-cost items from international suppliers to extend the product range.
For example, electronics and household items can be outsourced from cheap suppliers from China that can extend the product range immensely wider.
Increased inventory at low prices and varied product offers can attract a larger pool of customers looking to shop beyond the auction items.
3) Increased Sales through Social Media Marketing:
As we discussed, DealDash can improve its social media presence. It has a great business opportunity to increase sales through social media marketing.
Social media platforms like Facebook also offer a direct selling option that can increase sales revenue by manifolds.
Also, a bigger social media fan following can easily be turned into a larger customer pool. Integrated with international business expansion plans, social media marketing can yield higher rewards with some careful planning.
Many businesses lose charm when they diversify from their prime business field. However, business diversification also yields greater business security in terms of economic stability.
DealDash can also utilize the current opening of an e-commerce presence with a diversified business model away from the auction-business model.
Another way of diversification could be to offer the same business model with diversified products, such as introducing artwork and fine arts.
D) Threats for DealDash:
1) Increased Competition:
That’s an economic threat that virtually every business faces. In the case of DealDash, other auction sites like Tophatter, Gixen, and Pristine Auction pose a challenging competition directly. With e-commerce technology increasingly becoming affordable, the threat of new entrants also remains imminent.
Online auction sites like DealDash also face indirect competition from traditional e-commerce sites like Amazon and Aliexpress.
Although the business model of auction sites is totally different, the choice of products for the customer remains wider with other potential sellers.
2) Legal and Regulatory Compliance:
DealDash had been in hot waters with some dissatisfied customer complaints going to the lawsuit actions. Some regulatory and legal compliance issues with DealDash also pose tangling threats. A lawsuit claim or regulatory compliance can result in a loss of valuable business goodwill in no time.
3) Keeping the customer base Intact:
With increased competition and lower social media marketing, it remains a big challenge for DealDash to keep the customer base intact. The company would have to formulate a dynamic strategy to enhance the customer base and retain current customers.
4) The Cost of Falling behind Technology:
Every business needs to evolve with the rapidly changing technology. The same holds for DealDash. New and emerging online businesses are harnessing the power of the latest technology by taking the E-commerce experience from the desktop to the mobile.