It Makes Sense Now: Bido Guarantee Program

The missing piece of the puzzle glues it all together.

When domain auction platform Bido disclosed its “Bido Guarantee Program”, I was a bit confused as to why any buyers would participate. Essentially, buyers would participate in a pre-auction where they could bid for domains. The seller could choose to accept the winning bid in the pre-auction, send the auction to a “real” auction with the pre-auction bid as the starting bid, or walk away.

This didn’t sound too appealing to pre-auction buyers. They would essentially bid up the prices of domains, only to face more competition in the real auction.

But there’s one detail that wasn’t in Bido’s original explanation: pre-auction winners get a cut of the commission if they don’t end up winning the “real auction”.

Let’s say I’m a bidder in the guarantee program. In the pre-auction I win with a bid of $500 for a domain. The seller decides to send it to a real auction and the domain sells for $1,000 to someone else. That means I’d get 50% of the total commission (4% of the sales price), or $40. It would give me an incentive to bid high in the pre-auction (let alone participate at all). This ought to push domain sales prices higher on Bido.

My only worry, as I’ve discussed ahead of, is that this makes things more complicated. But I think it’s a nifty addition to Bido.

Current guarantee bidders include NameMedia, Parked, Domaining, Reinvent, and a number of other firms.