Dubli
Dubli is truly one of the most unique network marketing concepts to come along in quite some time. Their innovative concept of reverse actions is novel, but unproven. In attempting to create and drive demand for such a unique concept, there is an inherent degree of risk that cannot be ignored. The harsh reality of business is that many market innovators don’t make it either because they are ahead of their own time or because they misjudged the marketability of their concept.
Dubli Reverse Auctions, let’s take a closer look…
Dubli has created a unique “reverse” auction site where products go down in price as you bid instead of up. There are a couple different types of auctions that I won’t take time to explain but with either type your bids fall somewhere between a roll of the dice and a calculated bet. Winning means that you get to purchase the product at a reduced price. All products on the site are brand new and fulfilled direct from a Dubli fulfillment center.
When you win an auction you will by default pay less than retail for the item because all auctions start below retail, but only with good bidding will you really come out ahead. You must have credits to bid and credits cost money, therefore as customers use credits to bid products down, Dubli is making money along the way. This is how they are able to sell items at the winning bid price, which may be far below retail. This is also why you must have a good bidding strategy or you may end up paying more for the item than you would have just purchasing it outright.
Now the interesting thing is that I still haven’t gotten to the “real” product, because in terms of a network marketing compensation plan, the product is that which commissions are paid on. This means the product is not those auctioned, but rather the credits used to bid.
Credits are purchased by both distributors and consumers alike. When getting started, distributors are encouraged to purchase either a Bronze, Silver or Gold package. Each package comes with an inventory of credits. Distributors can use the credits for auctions, or convert them to vouchers. Vouchers are essentially the equivalent of a “trial pack”, which can be given to prospective customers and/or distributors to try out the reverse auction concept.
The process of building a Dubli business is essentially to come in with a startup pack, gather customers and distributors by giving away vouchers to get people hooked. Hopefully people will catch onto the concept using their free voucher and buy more when they run out or get started in the business by purchasing a startup pack which is essentially just a large purchase of credits.
Regarding the Dubli compensation plan, I’m left with a few concerns…
The Dubli compensation plan is one of the more interesting and difficult compensation plans I’ve ever taken a look at. After much review, I have to say I’m still undecided whether to give thumbs up or down.
Before I share my thoughts, here is a rundown on the basics…
Distributors get paid on a hybrid comp plan. The unilevel part pays 3 levels deep but the big commissions come when advancing in rank, thus qualifying for commissions on the credits of distributors at an equal or lower rank within your organization.
There are two potential problems I see with the plan.
- Everything hinges upon the idea that this “reverse auctions” concept will actually take off with true consumers. You can generate plenty of volume by recruiting distributors who buy startup packages with a lot of commissionable credits, but if these “trial” vouchers don’t turn into real customers that use the auction site, Dubli will be very short lived.
- Because such a large percent of the overall volume comes by way of these startup packages for distributors, there is a bit of worry that front end loading might be taking place. Ultimately there needs to be justification for such a large purchase of credits by distributors. If the only justification is to buy your way into a higher rank, the AG and FTC are not going to look kindly upon Dubli. Too often in this situation, there is very little volume taking place outside of the large startup packages. This is a recipe for disaster both legally and ethically. I’m not saying this is the case with Dubli but the comp plan is structured to allow such abuse to take place very easily.
I’m not sure what to think about this compensation plan, on the surface it seems too wide open for abuse. I’m not willing to go so far as to say the comp plan is illegal or flawed, but I’m also not comfortable giving it a thumbs up. This is a situation where the legitimacy of the comp plan is tied to the legitimacy of the product, which is yet to be determined.
Dubli – A look at the company, their competition & the industry
Dubli started in Europe back in 2006 where it experienced a good degree of success and apparently proved the business model out, but not without stirring up a few waves. They have gained a reputation for making dramatic and unexpected changes without notice, leaving many distributors frustrated. This was especially true during their expansion into the US marketplace in 2008. After a whirlwind of pre-launch growth, the compensation plan being promoted was drastically changed, leaving many distributors disenfranchised. They have been in business long enough to get lined up with the BBB and DSA and the fact that they are not members of either organization does not condemn them to being a scam but it also does not look good either.
I should cut Dubli some slack because they are carving out a completely new business idea, which is not an easy thing to do. It stands to reason that decisions must be made and changes must be implemented quickly in order to survive in such a fast moving environment.
Some of the basic warning signs that I look for in a company include the presence of identifiable corporate leadership and ownership. Scams will usually just hide behind a website, and this is not the case with Dubli, who’s founder Michael Hansen is very visible, along with the rest of the corporate management team. It is clear to me they are trying to do things legally and the right way, but this is not an easy thing to do with the uniqueness of the product they have.
Closing thoughts…
The entire concept behind Dubli is pretty darn ingenious, but I do have concerns. The fact is that Dubli does not really serve any need or fill any demand, so will the thrill of “gambling for a good deal” keep people coming back and buying credits?