Why Do People Show Their Hands?

Pulling Hair DFCAs someone who has participated in the expired domain auctions in Australia for many years, I have seen all sorts of bidding activity over time.

The one thing I have never understood is why some people bid early on Drop.com.au – and thus show their hands to others?

For the uninitiated, there are currently three platforms where you can bid:

Drop.com.au – this is a true auction system where you can see other participants bids. It also allows you to place a maximum proxy bid where you will only ever pay $1 more than the next highest bidder (if you are successful of course). The system also allows for “sniping” i.e.  putting in a bid with seconds to go. Unfortunately, Drop don’t win many of the bigger domains – but just ever so occasionally they do. So if you don’t cover your bases with them, that could well be your loss!

DomainShield – totally different system where you bid in levels (where each level doubles up). It’s also a “blind system” – no one else can see what you’re bidding. Level 1 is $25; L2 – $50; L4 – $200; L6 – $800 etc. When you place your initial bid, you do get advised if someone has already bid at that level. You then have to decide whether you want to double up. And if the domain name is valuable, you may have to keep doubling for a while! Even if you do secure a level, there is always the possibility that someone else can double up on you! (And you’ll never know until the end). DS win good domains on a regular basis, so if you’re serious about acquiring a name, you need to be bidding here as well.

Netfleet – totally blind system where you put in your best bid and hope for the best! Because it isn’t an auction system, some people tend to make higher bids on domains because of fear of loss! NF are the most successful platform in Australia – they simply “catch” the most, day in; day out. So if you want a particular domain, and you don’t have a bid on NF, then you’re bonkers!

Back To My Earlier Point

Over the past couple of months, I have seen some strong early bidding taking place on Drop. At 9am in the morning (with four hours to go), there have consistently been bids on a number of domains.

I really want to thank the people that do this. You are my “early warning system”.  You alert domain investors like me that there is serious interest in a particular domain or domains. I can then make an appropriate bid right at the end. 😉

On a serious note, if you are a genuine bidder, then bidding early is doing yourself a grave disservice.

Not only do you alert other buyers, but you effectively push the price up on the other two platforms (they will no doubt encourage you to keep bidding early!). And then someone like me will probably “snipe” you on Drop in the last 10 seconds. So you don’t win either way.

If your argument is that you’ll be away from the computer at 1pm, then I don’t buy that. Bids on Drop can quite easily be made by mobile phone.

Think about it.

Just my opinion as always …

Ned O’Meara – 19th July 2016


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9 thoughts on “Why Do People Show Their Hands?

  • July 19, 2016 at 2:14 pm
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    Spot on, Neddy. Anyone who bids on Drop.com.au early is alerting the pro-domainers that there is interest in a name. Pro-domainers then research the hell out of said-name, and then check how it’s going over at DS.

    One thing I’ve never totally understood on Drop.com.au is: if only one single person has submitted a proxy bid, does it show up on everyone’s screens? Sometimes I notice that if only one person has had a proxy-bid on a name, it doesn’t show up until after the auction has finished?

    • July 19, 2016 at 5:06 pm
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      That’s right Robert, on Drop if there’s only one bidder for a domain it stays hidden.

  • July 19, 2016 at 7:33 pm
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    Reasons to get your bid in early:

    1. The chances of a good domain not being noticed is very small.  Only lazy old pro’s don’t know a good domain is dropping 😉

    2. I’d call it upping the ante which is completely different from showing your hand. Just like in poker you can get rid of weak hands early.

    3. On NF and DS you get one bid and it doesn’t matter if you do it early or late but if the system goes down then early is better. And just because you found the top bid at Drop doesn’t mean it is the same price point at the other two platforms. You have to ask yourself is it a bluff top price or not.

     

    • July 19, 2016 at 8:16 pm
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      Early bids on Netfleet? You’re brave.

      • July 20, 2016 at 12:30 pm
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        I don’t bid on uber premiums so I’m safe from any sus activity.

    • Ned O'Meara
      July 20, 2016 at 5:32 am
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      @David – please stop describing me as a lazy old pro. The truth hurts. 😉

      My point is simply why bid early if you don’t have to? I understand your poker analogy, but if an early bidder is intending to scare or bluff people, then they need to make their bid a serious one. Not $50 / $100 / $200. Low bids are just an invite. 😉

      There was a time a while back on Drop when there were a couple of rogue bidders (eventually caught out) who placed largish FIXED PRICE bids early. Thank goodness that was stamped out.

      https://www.dntrade.com.au/threads/very-strange.8659/#post-62728

      I’m not suggesting for one minute that this is something similar. I believe it is more a case of inexperienced people wanting to play the drops, so they get in early.

      Imho.

       

  • July 19, 2016 at 8:10 pm
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    Who benefits from early bids?

  • July 19, 2016 at 11:09 pm
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    Is it someone just trying to push up the price so you pay more?

  • July 21, 2016 at 6:26 pm
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    Regarding Drop early bids, the majority of the best domains are always going to get more than one bid in the early stages – unless fixed bids have returned (a blatant attempt to game the system).

    But the Drop early bids have probably been exacerbated by the Domain Shield bidding system. As the Domain Shield system doubles the bid price for each level, domains can swiftly get beyond “budget” for someone who bids late – there’s a real incentive to get in first and lock out the competition.

    I don’t think it’s that surprising that this incentive to bid first has visibly spilled over to Drop, after all the Domain Shield locked out underbidders have nothing to lose (WARNING: Already queued for other at a higher level) – they know someone else is after the domain and has outbid them on a more successful platform. Early bids probably spill over to NF too (you just can’t see it).

    My 2 cents…

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