Hey all, just wanna share my thoughts on bid increments in auctions. This is just my understanding and I may be wrong but I believe some people are potentially losing money by having high bid increments in their auctions.
To be honest, I can't find any real reasons to have bid increments of more than $1. Ok maybe for really high value domains, you may not want bidders to outbid each other by $1 every time (especially if you don't want the auction to go on for ages since every new bid resets the remaining time to auction end).
But generally I think it's a good idea to have $1 increments, especially for low value auctions.
For example if you set a bid increment of $5 for a domain that is worth somewhere between $40-$55, when the high bid reaches say $45, the next potential bidder is more likely to think twice before posting $50 because the domain is already so close to its actual worth. However, if bid increment is only $1, the next bidder has more room to fight for the name since outbidding means that he's still going to be well under the domain's actual worth.
In the above scenario with $5 bid increments, it is very likely that the auction will end at $45. Whereas in the one with $1 increments, the price can easily reach above $45.
To be honest, I can't find any real reasons to have bid increments of more than $1. Ok maybe for really high value domains, you may not want bidders to outbid each other by $1 every time (especially if you don't want the auction to go on for ages since every new bid resets the remaining time to auction end).
But generally I think it's a good idea to have $1 increments, especially for low value auctions.
For example if you set a bid increment of $5 for a domain that is worth somewhere between $40-$55, when the high bid reaches say $45, the next potential bidder is more likely to think twice before posting $50 because the domain is already so close to its actual worth. However, if bid increment is only $1, the next bidder has more room to fight for the name since outbidding means that he's still going to be well under the domain's actual worth.
In the above scenario with $5 bid increments, it is very likely that the auction will end at $45. Whereas in the one with $1 increments, the price can easily reach above $45.
