A pair of 2007 UA graduates launched BidTavern, a penny auction website with a twist, on Monday.
Bidding fee auctions, or penny auctions, are a fairly new concept in the online shopping world, and take a much different approach to the conventional online auction seen on other sites like eBay.
Users purchase “bid packs,” which consist of a number of bids. Prices for individual bids typically average around 60 cents, and minimum costs for bid packs can range from $25 to $60, depending on the website. Participants then use their purchased bids to bid on an assortment of items being auctioned on the site at a given time in timed auctions.
Most items consist of electronics like iPads, flat-screen TVs and video game consoles, but department store gift cards and kitchen appliances are also popular, and all items start at or near $0.
Each 60-cent bid, when added, applies one cent to the cost of the item and adds about 12 seconds to the auction. The process repeats until the time of the auction runs out, and the last bidder wins the item and pays the remaining amount.
BidTavern, co-founded by UA graduates Caleb Donegan and Brad Benites, follows this same system, but has an additional feature that Donegan and Benites say is key to a penny auction site’s credibility.
“We looked at the other penny auction websites, and we just felt that there were a lot of things that could be improved upon, such as transparency with the users,” Donegan said.
BidTavern’s user system is unique among other penny auction sites, as it gives users the option to create their own profiles.
“The biggest aspect with us that’s different is the community, which is essentially a social network for all of our users,” Benites said. “What that does for us is it helps to create transparency by making sure that the bidders know other bidders who are bidding against them.”
Donegan and Benites also have their own BidTavern profiles, making it easy for users to report concerns, as well as providing the site with an identity.
“Penny auctions have kind of got a bad rap in the past because it’s pretty easy to scam somebody,” Benites said. “What we’re trying to do is remove that barrier. We don’t want it to seem like we’re hiding behind the BidTavern name.”
Donegan also said there are plans to bring BidTavern to other devices like tablets, which is also something that other penny auction sites have not made an effort to do.
Donegan and Benites have been friends since they were both 5 years old. They said they knew that they wanted to run a business together, but didn’t know what kind. According to Benites, the two heard an ad for a penny auction site on the radio, which helped them make their decision.
After the five-month planning process, the website opened for registration on Monday, and now has more than 200 registered users. The co-founders say growth is the main game plan from here.
“At this point, we have a lot of ideas of things that we would like to implement, and right now we are taking it day by day,” Donegan said. “We do plan on holding on to the website for a while, and we do plan to grow it.”
And the odds for success are on BidTavern’s side, according to Sherry Hoskinson, director of the UA’s McGuire Center for Entrepreneurship, who said the UA’s record for successful entrepreneur graduates is one of the highest in the nation, and has been for the past 30 years.
“It’s really important to have innovative, entrepreneurial thinkers and those that can support and engage with entrepreneurial, innovative thinkers to create new opportunities,” Hoskinson said.
For the time being, the co-founders said they are very happy with the results after opening the site, and are excited to add to it.
“It’s actually exceeded all of our expectations so far,” Donegan said. “We were just kind of blown away by how well it actually went, and … we need to maintain this.”
