I’ve always been weary of the online bidding process, especially when it comes to domain names and here is a good example of why…? the suspicious bid.

I was just participating in an auction at Namejet.? I bid up to the maximum amount I was willing to pay and the other guy’s proxy bid was $100 higher so I dropped out.? I didn’t know what his top bid was, and I wasn’t willing to keep going up in increments of $100 to find out when I reached the peak already for what I was willing to pay.? I checked out the auction ten minutes later to see what the final price was and here is what I find suspicious.

The domain auction ending price was $2,508.? The runner up’s last bid was $2,444.? When the runner up bid this amount and he saw the high bidder remained, but with a bid of $2,508 the runner up knew that since the high bid was $2,508 and not $2,544 that $2,508 was the high bidder’s top price.? Meaning he could have claimed the high bid if he bid $2,608.? He knew this.? I don’t think guys who are consistently bidding in the $X,XXX range would not know this, it is simple math.? So he knew this and he did not bid, he let the other guy take it. Where’s the logic?? If you’re willing to pay $2,444 and then you get access to information that says you can get the high bid if you get to $2,608 I would think you’d spend the extra $150.

Now… I know some people set a limit on a domain and won’t move past that limit (I attempt to do that though if I know what the high bid is using my powers of deduction like above example I will usually pony up the extra $100 or $200), but I can’t tell you how many times I’ve seen this scenario occur and it is more than fishy to me.? Am I alone here?

And I’ve been on the receiving end of this a few times, most recently on GoDaddy.? I was going to be away from the computer so I put in my best bid on a domain, something like $752.? At the time, with two hours to go the current high bid of mine was only $115.? Later on that day when I sit down at the computer I check out the GoDaddy auction and I see that only one other person came into the auction and bid, and what do you know, they ran up the price to within $10 of my max bid and then they walked away.? If they were willing to pay $745 and they could then see what my top bid was, wouldn’t they have spent the extra $20 to win it?? I feel like I got taken for a ride there.? Now could this have been totally legit and just happened this way.? Of course.? But am I suspicious when I see something like this that makes no sense to me, absolutely.? And because there is no clarity in this bidding process I/you will never know if everything is on the up and up or if we’re getting taken to the cleaners by someone gaming the system.? It just always seems like there’s one other guy who’s always there driving up the price.? Sometimes its legit, but is it legit all the time?

8 comments on “The Suspicious Bid

  • Would they really be that greedy to make it within one increment of your max bid? If it wasn’t legit I would assume they would stop at least a few increments away to not make it obvious. Also, when someone is bidding and bidding and keeps getting outbid, there’s some excitement involved. But once they see you’re maxed out and know that their next bid means that they have to pony up the cash, they might get nervous.

    Just playing devil’s advocate, I also think it seems rather shady. I was also just looking at SEDO auctions today and noticing the crazy stuff that had bids. Couldn’t help thinking they were shills hoping that someone else would jump in and win it.

  • @ Michael

    That is a fair comment about getting caught up in bidding and then when you realize where the other person’s cap is you stop. But I can’t imagine this happens every time. There always seems to be something going on behind the curtain… there was for domains, there was for online poker…

  • This happened to me on SnapNames couple of times. I think some guys list their names and tell their buddies to shill bid. I stopped bidding on any names on SnapNames auctions or private auctions.

    In your case I think the runner up bidder wasn’t a verified user. Non verified bidders can only bid up to $2500.

  • If I got caught up in bidding in a subpar name, and it bid up to a value where I might have to hold for many years to get my money back, I might think twice, and pull back. Almost like a gambling rush these auctions very dangerous, as long as you bid your max, you shouldn’t be complaining about having to pay it, Most people bidding you up most likely don’t have the money to pay, just bidding on speculation, caught up, its to bad, but get used it, seems to be the norm these days.

  • Trust your instincts. It’s not a coincidence in this business. Too many shady practices going on in several areas of domains.

  • @Jamie

    I don’t believe it was a member listed auction because it didn’t have that godforsaken “Namejet Reserve” crap that a lot of the good auctions on there now have.

    @Gnanes

    Hmmmm, that might be, I didn’t consider that about a bidding limit.

    @John

    Good point, I hear you about the gambling rush, always important to set your limit before going in.

    @JB

    Yup, plenty of shadiness going on. And since it usually starts at the top there isn’t much incentive to change it.

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