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Thread: A question about bidding for a site in an auction

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    Moderator Kay is a Premium Member
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    A question about bidding for a site in an auction

    Sorry if this is a bit of a newbie question, but I'm trying to clarify some bidding tactics on Flippa. Here's something I've noticed happening a few times and I'm not entirely sure why.

    When you are watching the bidding on an auction, it starts off low. People piddle about bidding in $5 increases. Then someone comes along and trumps them by upping the stakes considerably. I suppose it could be a shill bidder or it could be that it's a serious buyer who doesn't want to spend his time constantly adding slightly increased bids. He ups the stakes to nearer the price he wants to pay and hopes to get rid of those hoping to pick it up for next to nothing. These motives are understandable. I'm not sure if there are other possible reasons.

    And now we get to the bit I don't understand. Having upped the stakes, let's say to $1k, he waits a week and during this time no one else has bid anything. He then ups his bid to $2k. Why would he do that? Why did he not leave his $1k as the top bid? Is he hoping to show the seller he's serious or are there other reasons to do this. I've seen it happening on quite a few auctions I've been watching over the last few weeks.
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    Maybe he was trying to meet the reserve or just putting in the max he is ready to pay and see if it hits the reserve?

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    Kay (5 May 2014)

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    Moderator Kay is a Premium Member
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    Yeah, it had occurred to me that he was hoping to hit the reserve or offering his "best price". But in cases where there's a BIN, would it be right to assume that the reserve will be in the region of that? Or are reserves often much lower than the BIN?

    It's just that I've seen this thing of a buyer bidding high against himself done rather a lot and wondered if it was some kind of buyer strategy I wasn't aware of.

    (I've never bought anything on Flippa, because I've never yet seen anything I want to buy so I'm just trying to find out how their buyers operate. If I wanted to buy a website, Flippa would be one of the last places I'd look, although I do watch a few of their listings just to see what's going on.)
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    Top Contributor grynge is a Premium Member
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    I have seen this on a few auction sites with auto bidding,

    Bidder places maximum bid, system places bid above last highest bid

    New bidder comes in bids higher, auction system jumps the maximum bidder to a higher bid automatically

    Some auction sites enter the new bid but some just skip it all together
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