The pre-bids continue to roll in for SwapFest-Miami on 10/20. As of Monday evening, Pre-bids for SwapFest-Miami already exceed the total bids for SwapFest-Seattle. Since the SwapFest Dutch auction bidding format will be new for most of the participants, this blog post will provide a brief overview of how the bidding works for anyone who plans to participate on-site or pre-bid remotely.
How does a Dutch auction work?
A Dutch auction is an ideal format for selling large amounts of inventory. In a regular auction, each auction lot is individually auctioned. By contrast, in a Dutch auction, many lots can be auctioned at the same price. Bid prices start on the high end of the expected range and then fall to a final reserve price. At each bid price, SwapFest participants have the opportunity to submit a bid sheet which lists lot numbers that are of interest. The first valid bid for a given lot numbers wins. And since there is no bidder-to-bidder competitive haggling, Dutch auctions are extremely efficient. This is why we expect to auction off more than 5,000 lots in the span of just 90 minutes. For anyone who has never seen a Dutch auction, stop by on Wednesday morning at TRAFFIC in South Beach to see the action.
Auction Bid Prices for SwapFest-Miami
All SwapFest participants will have received a SwapBook which includes the list of assets available for bidding. In addition, all participants receive Bid sheets which are distributed ahead of the start of SwapFest. On the bid sheet, bidders select one price point from the below list of bid levels. Each Bid sheet can include as many lots as can fit on the page. Here are the bidding levels:
$9,999 $8,999 $7,999 $6,999 $5,999 $4,999 $3,999 $2,999 $1,999
$1,899 $1,799 $1,699 $1,599 $1,499 $1,399 $1,299 $1,199 $1,099
$999 $899 $799 $699 $649 $599 $549 $499 $449
$399 $389 $379 $369 $359 $349 $339 $329 $309
$299 $289 $279 $269 $259 $258 $257 $256 $255
$254 $253 $252 $251 $250 $249
Suggested bidding strategy for a SwapFest Auction – High, Middle Low
To do well in a Dutch auction, it pays to do your homework, and have a strategy. The strategy that I believe works best is a “High, Middle, Low” strategy. Let’s say a participant wants to bid on 30 different lots. Of the 30 lots, the bidder has 5 lots that he/she definitely does not want to miss, 10 lots that he/she would really like, and 15 lots that are nice to have. In this case, the bidder prepares 3 bid sheets. The price at which the bidder intends to submit the 3 bids might be left unspecified in order to get a sense of the bidding pace. At the moment that the bidder wants to bid, the bidder circles the appropriate bid price and hands in the bid sheet corresponding to the price at which the bidder wants to bid. Unless you are an aggressive bidder, odds are good that you will only win a fraction of your submitted bids. However by using High, Middle, Low, your odds increase for winning the names that matters most to you.
Remember — All lots at SwapFest include a developed website
It is important to keep in mind that each auction lot at SwapFest, includes the development cost of the custom website. In other words, the typical development cost of $249 for a Product Portal has been included in the bid price. While bidders are not obligated to use the developed site, we hope you will try it out for as long as possible. Post-SwapFest, each domain is transferred to the winning bidders. If the associated website is not yet live, it will be completed shortly after SwapFest at no additional cost. For any websites that are live, in most cases, you are able to see current site statistics by adding /stats to websites of interest, e.g. bra.net/stats. It is also a good idea to check the indexing and ranking status of any sites of interest.