www.QuiBids.comSeptember 2012Vol. 1, No. 1

QuiBids Quarterly

Hear about QuiBids’ future from CEO Matt Beckham on page 6

QuiBids started in an Oklahoma City apartment in summer

2009, after Matt Beckham and Shaun Tilford set out to build a service that improved on the online “penny auc-tion” model started in 2005 by Swoopo, a German company. Just four months after the October 2009 launch, Qui-Bids surpassed Swoopo’s output of 250 auctions per day, while employing just a quarter of the staff.

With the goal to build the best, most fun alternative to traditional online shopping, QuiBids was off and run-ning full speed. The company expand-ed rapidly in 2010 and 2011 in both size and public stature as it built the enter-tainment retail auction market. While most online entrepreneurs stake out scenic spots in Silicon Valley, QuiBids proved a successful tech startup could bloom in the Midwest.

A Brief History of QuiBids

Getting it right: QuiBids and the BBB

SHOPPING WITH A SMILE

photo by Erik GausE

QuiBids Customer Support manager Sara Howell helps a family shop for groceries at an Oklahoma City Homeland in May. The shopping trip was set up by the Regional Food Bank of Oklahoma, which arranged for QuiBids employees to spend an afternoon stocking a food pantry and sponsor two underprivileged families’ trips to the grocery store. See pages 4 and 5 for more about QuiBids’ work in the community.

BoB ManistaPresident, Better Business Bureau Serving Central Oklahoma

The Better Business Bureau has responded to many develop-

ing online sales formats and busi-ness models since the Internet first exploded into the public conscious-ness. The Internet has changed the way that people do business, both buying and selling, and the BBB was one of the first organizations to begin suggesting ethical, logical means of doing business online.

So-called penny auctions have proven to be no different from the

A Letter from Bob Manista continues on page 2

Inside This IssueHow does QuiBids work? 3

QuiBids and Oklahoma 4

A look at QuiBids’ charitable efforts 5

way the public has approached many new offerings online. At first, there is an almost-natural level of suspicion, then, as familiarity and the expertise of both the site designers and site us-ers grow, there is a perceivable change in the level of acceptance for the new marketplace.

Just when everyone was getting comfortable buying everything from phone service to Soup at Hand through an online vendor, penny auctions popped up. Just like any other new business format, the BBB approached them with cautious suspicion.

The BBB was familiar enough with online auctions to publish a book in 2007 to help eBay sellers be more suc-cessful, but — even now — many BBB managers take a dim view of penny auctions, mostly because of the way they market themselves. It boils down to the idea that people voluntarily pay a small amount on the chance that they’ll be the high bidder at the end of the auction. If they win, great. If they do not . . . not so great, because on most auc-tion sites, “losing bids” are gone forever.

That is a big hurdle for most sites, especially with con-sumers who are wary or especially critical of the core auc-tion arrangement, and it often leads to claims that penny auctions are patently misleading. Coupled with the lofty discount claims and limited mention of potential losses, some penny auctions set themselves up for negative re-views. And beyond their business model, some penny auction sites simply do not do business well. They incur poor delivery records, complaints that the product auc-tioned was not what showed up on the buy-er’s doorstep, and other disputes that raise red flags for any seller.

But as QuiBids points out, it is not a pen-ny auction site, and many of the concerns pertaining to the industry do not apply to its business. QuiBids maintains it-self as an “entertainment retail auction” site these days, and differentiating itself from the roster of penny auctions is a smart move. QuiBids has a solid track record for deliver-ing the goods to winning bidders, and, for those who take the time to understand the process and QuiBids’ specific

September 2012www.QuiBids.com2

A Letter from Bob Manista

turn on the business model, the policies in place ensure a safe experience for the savvy buyer. QuiBids has done more than enough to step away from the pack and justify refer-ring to itself as something different.

QuiBids vs. The PackAmong the penny auctions explored by the Better Busi-

ness Bureau Serving Central Oklahoma, QuiBids stands out with a far more professional appearance than most, and the Buy Now policy that allows customers to recoup

money spent on bids placed in “losing” auc-tions (and spend it toward the item’s listed retail price) is not common among penny auction sites.

Nearly every penny auction has pages of disclaimers and rules of the road and no site operator can force consumers to read their policies — although that’s often the first spot of dispute for complainants (to the tune of “I thought it worked like eBay” or a another conventional, more familiar auction site) — but QuiBids stands alone in

its efforts to create a level playing field by dividing bidders according to their relative levels of experience, providing tutorials to help bidders learn to be successful in the hobby, and cross-promoting itself through different world mar-kets.

There is a level of fairness at work in QuiBids auctions

Getting it Right continues on page 4

QuiBids is proactive, not re-actionary, and its pioneering management appears to have maintained a philosophy of breaking new ground while covering all the bases — a difficult balance to maintain for any growing business.

0 100000 200000 300000 0 1000 2000 3000

QuiBids ($137,427) QuiBids (2,820)

DealDash ($24,400) DealDash (226)

Beezid ($9,500) Beezid (92)

MadBid ($7,700) MadBid (13)

0 0100

RETAIL VALUE OF PRODUCTS AUCTIONED

QuiBids’ Completed Auctions vs. Competitors: July 31, 2012

NUMBER OF PRODUCTS AUCTIONED

1,000200 2,000300 3,000

Continued from page 1

*Competitor stats are based off estimates

September 2012 3

How Does QuiBids Work?www.QuiBids.com

Buy Now — the buy Now price is available to any customer, so long as they’ve bid on

an auction for the particular product they wish to purchase. it’s a safeguard that creates a good situation for customers: pay the listed price, or try to win the auction for a big bargain.

Product image — Quibids sells thousands of items every day, all of them brand-new

and factory-sealed. Electronics are the most popular items, but customers go for everything from Walmart gift cards to iphones and kitchenware by Cuisinart.

Auction price — Every time a customer bids, one cent is added to

the auction price, and the clock resets back to :10, :15, or :20. if the clock reaches :00, then the last bidder gets to buy the item for the auction price.

Customer profile — Customers choose their own usernames and

avatars, which show up every time they bid. they can add to their profiles by earning Quibids badges, which denote achievements and major auction wins.

QuiBids.com is an auction web-site where customers can shop

for brand-new, factory-sealed con-sumer products risk-free. They sign up by creating a unique account and purchasing a Bid Pack, which includes 100 bids to be spent on auctions for electronics, housewares, jewelry and other products.

Each auction has a timer that counts down to zero. In the last 20 seconds of an auction, the timer resets whenever a customer places a bid, an action that also increases the auction price by one cent. The last customer to bid wins the auction, claiming the item by purchas-ing it at the discounted auction price.

Customers who bid on but do not

win an auction still have the opportu-nity to purchase the item at the listed price, less the money used on bids. It is called Buy Now, and QuiBids was the first site to offer such a feature across its entire inventory. It is a cornerstone of the company’s success, and it guar-antees that customers never have to walk away empty-handed.

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September 20124 www.QuiBids.com

that does not appear to be a concern for its competitors. QuiBids is proac-tive, not reactionary, and its pioneer-ing management appears to have maintained a philosophy of breaking new ground while covering all the bases — a difficult balance to main-tain for any grow-ing business. The company actively seeks and responds to criticism, tests its functions through independent third parties, and measures up to the BBB’s standards for marketplace conduct.

That level of customer service sets it apart from both experienced auction sites with a similar stance and new-comers to the online market. There is a more social element to QuiBids than other auction sites, more a sense of an online community than the competi-tive nature of others offering the same products in a similar setting.

Practically anyone with a PC could start an auction site and copy the

model now, but QuiBids has developed unique policies and a playground sur-rounding the auctions that would be hard to duplicate or even imitate.

QuiBids and The BBBThe BBB has certainly found Qui-

Bids open and receptive to criticism, but the company’s staff is uncom-monly eager to satisfy the terms of any disputes that arise as a routine part of doing business in this climate. That is a rare combination of circumstances.

Not every business understands how — or even why — it should par-ticipate in the online marketplace, and QuiBids has been able to communi-cate (in terms understandable to those lacking serious web experience) why an online presence is important to the ongoing success of any company, from a plumbing outfit to a funeral home.

Given any cross-section of the business community — and the BBB’s Accredited Businesses are that — oth-er businesses under the BBB aegis can look to QuiBids as an entity that de-signed its own world and got it right.

This letter by Bob Manista was written July 6, 2012, and edited to fit this newsletter.

Getting it Right

BOB MAnistA

5 Reasons Why QuiBids

is Good for Oklahoma

1 QuiBids’ business opens previ-ously nonexistent distribution channels that funnel revenue

into Oklahoma from other states and countries.

2 In nearly three years of opera-tion, more than 90 percent of QuiBids hires came from

within the state.

3 Though QuiBids does business internationally, its employees work with local charities like

the Regional Food Bank of Oklahoma and Oklahoma Children’s Hospital.

4 QuiBids employs about 150 well-educated people with high-quality jobs. About 85

percent of them hold a bachelor’s de-gree or greater qualification, and most obtained them at in-state universities.

5 QuiBids employees affiliate with many organizations that promote in-state business,

including the Oklahoma Business Roundtable, Young President’s Organi-zation, and Leadership Oklahoma City, as well as various trade groups like PRSA, OCHRS, and OSCPA.

A niche of the online retail (or “e-tailer”) industry, entertainment shopping (or entertainment retail) surfaced in 2005 when the German company Telebid developed the “penny auction” business model. It has since evolved into several dif-ferent strains of operation but at the core of every entertainment shopping outlet is a fresh alter-native to traditional online shop-ping.

By 2010, lots of unscrupulous

sites used the “penny auction” model to get in on entertainment shopping and the whole indus-try’s young reputation was marred by unethical and often fraudu-lent strategies like shill bidding and bot bidding, providing little or no customer support, or even outright failure to ship customers their products. As a reactionary measure, QuiBids rebranded as an “entertainment retail auction site” in early 2011 to distance itself from

the unethical behavior piling up on the web.

Now that the dust has settled, QuiBids leads the entertainment shopping niche — controlling more than 80 percent of the young mar-ket. The Oklahoma City business now aspires to continue innovat-ing on entertainment shopping in hopes of pushing out of the niche and into mainstream awareness, to compete with major online retail-ers like Amazon and eBay.

What is Entertainment Shopping?

Continued from page 2

September 2012 5

photos by Erik GausE

Customer Support Manager Kristi McMullen helps the mother of a family chosen by the Food Bank shop for groceries at a southwest OKC Homeland store in May. QuiBids picked up the bill on the shopping trip.

Customer Support Director Josh Walker plays a wall-sized game of bingo at a July 2012 visit to the Children’s Hospital.

ABOVE: After a few hours of packing boxes at the Regional Food Bank of Oklahoma in February 2011, a host of QuiBids employees pose for a photo.

LEFT: Posing with the shopping carts they decorated for the May shopping trip to Homeland.

Bring on the Fun!QuiBids in the Community

At QuiBids, our busi-ness hinges on fun.

It’s an important compo-nent of the service we pro-vide, but it’s also the defin-ing characteristic of our corporate culture — it’s who we are, and what we do.

No matter the situation, we Bring on the Fun — that’s our slogan — with our char-itable work, too, whether it’s playing games with re-cuperating kids at the Okla-homa Children’s Hospital or packing food for the needy at the Oklahoma Regional Food Bank.

Our idea of a good time is doing the hands-on work that builds a better, more fun place to live out of our Oklahoma City community.

www.QuiBids.com

September 2012www.QuiBids.com6

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

PLACEPOSTAGE

HERE

A letter from the CEOAbout this time three

years ago, QuiBids was still just a project un-der construction, one that Shaun Tilford (now the CTO) and I were piecing together in the Oklahoma City apartment I shared with Josh Duty (now our COO) during the after-hours from our day jobs.

A lot’s hap-pened since then.

We’ve survived terrorist attacks on our serv-er (our first case of black-mail!), unexpectedly large waves of Black Friday traf-

fic, and full-office moves to Leadership Square in down-town Oklahoma City and eventually our current home at Valliance Bank Tower.

In doing so, we bested our competitors in our niche indus-try by providing customers with a consistent, reli-able service that innovated on the traditional model of online shop-ping.

Now at about 150 em-ployees doing business in six countries, our outlook for the future entails con-

tinued international expan-sion, providing our custom-ers with more purchasing options, and simply making QuiBids a more fun, more entertaining place to shop.

We’re prepared to launch in France and Germany, two markets that will be our footholds into the European Union. We also introduced a new game, Word Scramble, that moves us further into the gamification trend in online retail.

As a company solidify-ing its customer base and international brand part-nerships, we’re uniquely positioned to grow without outsourcing meaningful

MAtt BECkHAM

Get in touch with QuiBids!

www.QuiBids.com(405) 253-38834 NE 10th St., Ste. 242Oklahoma City, OK 73104

Jill FarrandPublic Relations Directorjfarrand@quibids.com

work beyond our own office here in Oklahoma. That’s the future we’re reaching to-ward here at QuiBids!