How Does DealDash Work and Make Money – DealDash Business Model Explained

If you’re interested in a bidding auction, DealDash is the largest pay-to-participate auction site. Founded in 2009 by Willam Wolfram, a 16-year young entrepreneur, this e-commerce site runs on the penny auction strategy.

Since 500BC, the auction has maintained its existence and influenced many business models. Like, a commercial marketplace Amazon or an e-Bay auction, where sellers bid different rates for the same item.

Similarly, in DealDash, customers can bid on electronics, apparel, beauty products, home goods, jewelry and many more starts at 0¢. It offers customers to purchase at a much lesser price than the actual price. No wonder why DealDash advertises “savings up to 99% off”.

Though it requires a bit of luck because only one bidder can win and get the product. However, several recent scam reports by customers have raised concerns. Keep reading the article to know how does DealDash works and makes money.

What is Penny Auction?

Before proceeding to details, let’s get to know about the penny auction. It’s a bidding fee auction where participants pay a non-refundable fee to purchase a bid. In short, you’ll pay a non-refundable amount to place every small incremental bid.

Moreover, every bid starts with a similar rate and marginally increments the rate by a small amount. Whenever a new bid is placed, the auction gets extended, mostly by 10-20 seconds. The auction ends when the time expires and no one bids more than the current bid.

The last bidder wins and pays the total winning bid amount for that item. Eventually, the auctioneer profits a good amount from the fees charged for each bid and final payment to sell the item.

What Is The Catch About DealDash?

Being a penny auction site and mobile app, DealDash is different from other auction sites in an amazing way.

In most traditional auctions, the final bidder wins and others lose money. Basically, people gamble their money with less chance of winning, as in many auction sites.

Whereas DealDash offers the losing bidders a “Buy It Now” option to get their bids back free by purchasing the product at its retail price. This pretty good feature provides a chance to save bids. It makes DealDash different than other e-commerce auction sites or apps.

Moreover, every time you use “Buy it now”, each bid you put in the auction will return into the bid balance. Eventually, you can try new auctions without buying more bids. It’s surely a win-win situation.

Meanwhile, the site runs on the basic business model strategy. You need to buy a bid in order to be eligible for the DealDash auction. The bidding cost starts from 12¢ to 60¢, depending on the offers and discounts.

However, these bids are non-refundable. Once you use a bid for an item, you’ve to use another to participate in the auction again.

Special features on DealDash

Let’s look at the other amazing DealDash features.

  • Full refund on first purchase: The interesting catch about DealDash is you can use it for free and get a full refund on the first purchase within 90 days.
  • Free delivery: DealDash is available only in the USA and provides free delivery within 14 days.
  • Free bids with “Time as highest bidder”: An amazing feature with DealDash is its unique gamification element. It’s called “Time as highest bidder”, a progress bidder bar fills up each time you become the highest bidder in an auction. When the bar is full entirely, you level up and get DealDash free bids as a reward. This unique feature helped the site to drive 6 times more customers.
  • Daily returning reward: You can earn Daily Returning Bidder Reward (maximum bids is 30) depending on the number of bids you placed yesterday.
  • Trusted and original brand: You’ll get all-new brand and unused products only from trusted and original manufactures (Walmart, Sears etc.) with a warranty.

How Does DealDash Work?

Most people are curious about why DealDash is so cheap, the tips and tricks to use DealDash or how to bid here. Moreover, knowing how does DealDash actually works will help to understand its revenue model. Here’s the complete process to give you an insight.

Buy Bids:

To join in a DealDash auction, you have to buy a bid pack. As DealDash runs on a “pay-to-play” strategy, you need to buy bids in terms of credits to start the bidding.

Generally, every bid costs 60 cents by default. But DealDash always runs a promotion so that you can purchase a bid with less cost. Here at, you can find out the latest promotional offers to purchase bids.

Furthermore, there are options to buy bid packs of different sizes, such as 100 or 200 bids. You can also try the DealDash promo code to get free bids on the first purchase.

Every time you place a bid in the auction, one bid will be removed from the bid balance. If you run out of bids, either buy more or use “Buy it now” to get back all bids.

Start The Bidding:

Let’s see how to bid in an auction in DealDash.

  • At the beginning of the auction, every item is set at $0.00. Every time a bid is placed on a product, the price gets raised by 1 cent. The final price depends on the number of bids placed, meaning the more bids, the higher the price. Though still, you can win the product at least 60%-90% less than the original price.
  • The auction clock timing lasts for 10 seconds and resets each time someone bids.
  • You can use the “Bid Now” button in order to start the bidding. Or, perhaps you may like to use BitBuddy to place bids automatically for you. All you need is to enter the number of bids to place and let BitBuddy do the rest.
  • When no one bids within the remaining 10 seconds, you’ll win as the highest bidder.
  • If you’re lucky enough, you pay only 50% of the final amount if the auction was running on the “50% off” promotion and with free shipping.
  • But did you lose all money? No problem. You can use “Buy It Now & Get Your Bids Back” to buy the product at retail price.

Before starting the bidding, here are few things to consider and tips to follow.

  • Do not bid rapidly or else you may end up wasting your money.
  • To bid more strategically in DealDash, it’s advisable to book BitBuddy. Most major auctions are won by using this tool.
  • Study your competition and keep track of them.
  • Check the winner page to know the final price of the auctioned item.
  • Try auctions at different times in a day to increase your winning chance.
  • Try bidding on less popular and inexpensive items to avoid tight competition.
  • Lastly, don’t forget the winning limit in DealDash to plan your bidding strategy.
  • You may win the same product once in 30 days and all remaining BitBuddies for that product on other auctions will be automatically canceled if you win.
  • You can win up to 50 auctions per week and all remaining BitBuddies will be canceled automatically for other auctions on your 50th win. When the limit resets at 00.00 PST on the day of the week you created the DealDash account, you can start bidding again.

How Does DealDash Make Money?

Similar to other penny auction sites, DealDash makes money from selling bids. Here are the main resources to generate revenue.

  • The bids are sold in different size packs like 100 or more. So, the more you bid, the more DealDash earns money.
  • Additionally, the company makes money from the final auction price at which the item is sold.
  • Not to mention, the maximum profit comes from the unspent bids.
  • The “Buy it now” feature is also a great source of money as the bidder purchases an item at its full price.
  • The additional revenue comes from the referral fees on sale from the retailer or brand and investor funding (almost $2 million) from Kaj Hed, Rovio Chairman and Carbonite CEO, David Friend.

Though DealDash works to stay at a profitable margin relying on its huge customer base. Currently, the site has over 15 million customers. Let’s give you an example of how DealDash makes money.

Suppose there’s an auction on a watch at DealDash with the original cost of $20. The auction will begin from $0 like any auction site and go on as high as bids take it to.

Now let’s assume you win the watch at $12. DealDash will earn that final amount along with the total values of bids on that watch from all other bidders. Let’s say the cost of one bid is 15¢ and each bid increased the item’s price by 1¢.

So, if the total bids on that auction are 600, DealDash makes money $12+$90 (600×15¢)= $102. This is more than the original cost of the watch. It also makes sense why DealDash offers free shipping.

Is DealDash Legit or Scam?

Despite millions of customers, DealDash has got a lot of criticism and controversy. It’s often compared with gambling as people bid and lose money. Although terms and conditions have been specified on the site, people still raise questions if DealDash is legit.

Speaking of scams, the company has already faced a class-action lawsuit in 2017. Where consumers claimed many products on DealDash are generic, cheap and mostly copy of original brands.

Additionally, the prices of items through “Buy it now” are far above the original market price. In fact, complaint reports claim these rates are very much higher than that of similar products in Amazon. Even consumers accused the site of promoting certain products as “luxury,” which doesn’t exist outside DealDash.

These several complaints create controversy whether DealDash is a rip-off or safe site. However, there are no such proven reports of using the shill bidding policy by the site.

But most of the time, an unfortunate bidder tags DealDash as a scam after losing money on bidding. Therefore, one should wisely put money and limit bidding to avoid risk. Eventually, they will end up making a good deal on DealDash.

All In All

For the last ten years, DealDash has managed to be the largest penny auction site. Rather than the conventional way, you can get back your losing money by purchasing the item at its market price.

On the positive side, it’s wise to start with less expensive items. Once you know how to bid, you can set sights for bigger games. But you should apply the correct strategy and limit your bidding. Otherwise, you may end up losing a lot.

However, there can be many gimmicks about if DealDash worth it. But with over 15 million consumers, DealDash has no intention to shut down in the near future.

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