When you increase your bid too much at once, it would likely spike the Amazon algorithm. You might get too many clicks at a higher bid but end up spending too much on your keywords. Maybe this would generate some sales, or no sales at all. And if you do get some clicks, this is done with a greater ad spend. Your ad spend would likely be very hard to recover, in terms of ACoS later. So overall, there's going to be a much bigger loss than you would expect.
To fix this, ZonTools limits the increasing of bids by asking sellers to set the incremental value at the onset of campaign setup. Bids are increased gradually and after more than five years of testing, we found is the best way. Bid increment is one of the thresholds or rules for your campaign settings which entered are done prior to PGN creation. (The bid increment is the amount of bid you will increase every day until you get some clicks.)
If you're doing it manually, we recommend 20% per day so that Amazon has time to put it into their system and test it. And later you can see there are results with the new bid. With a bid of $1, the next bid is then $5.