Buy and sell websites and find websites for sale in the most active auction marketplace.
Flippa.com – The $88Million Flippa story so far
What To Watch Out For Before Buying A Website on Flippa.com
Flippa is the world’s largest marketplace for buying and selling already established websites. Through its platform, Flippa can also host website domains. If you’re looking for a website that has already an established following, you may want to check out the Flippa listings. Since it was founded in 2009, Flippa has already sold $88 million worth of websites and domains. It first opened its doors in Melbourne, Australia in June 2009 while the United States headquarters opened in San Francisco, California in August 2012.
Flippa is a spin-off of the Sitepoint marketplace, which closed down in June 2009. Most bidders for the websites come from the United States, United Kingdom, Canada and Australia. Some of the biggest sales that Flippa made were Retweet.com, BlogTopSites.com, FaceMash.com and s9.com.
The people behind Flippa are Matt Mickiewicz and Mark Harbottle, founders; Andrew Knibbe, marketing manager; Chris Corbyn; development manager; Dave Slutzkin, general manager; and Leni Mayo, director and founding investor. Clearly some hard work coupled by sessions of genius brainstorming would have preceded what the market has today: A marketplace for web properties, which at least for now, is seems to be the most popular in the world.
Why is Flippa so popular?
Experts would argue that it is not because they are so great but perhaps due to such a young market not having a real alternative. The battle in businesses these days is through the Internet. When one owns a business, he/she should have a good website to go with it. But establishing a website is not that easy. You would have to generate keywords that would put your site on top of the Google search listing. You will also have to hire a competent content writer and editor.
What Flippa did is to buy and sell already established websites. For some reason, there are a number of people that decide to give up their websites even though they have steady followings already. They sell their sites to Flippa which, in turn, put it in their listing and feature them to potential website buyers.
The best thing about Flippa is that it has a wide range of websites and domain names that will fit exactly what your business is about. If you own a health and fitness club/shop, for example, you can check out two of Flippa’s featured listings—HealthyDietTips.us, WeightLossInLa.com and DietNitsa.org.
It also has three categories you can choose from—entry-level websites, mid-range websites and high-end websites. Depending on the bids, entry-level websites would be priced from $1 to $1000. Mid-range websites would cost somewhere between $1000 to $6000. High-end websites, on the other hand, will give you a damage of $6000 to over a million dollars.
How to buy a website from Flippa?
First and foremost, before shelling out your hard-earned cash for a website, make sure that you have the experience to back it up or a team of affordable experts to help you. Running a website is a tough feat. You would have to attract readers and followers, invite advertisements and constantly update the content. It would also be wise if you can try to run a blog successfully first before getting your full-blown website. If you managed to become a successful blog owner even amid your busy schedule, then you might have a better chance at becoming a pretty good website owner too. Also, you may want to check out some crash courses or self-taught books on website encoding. All those HTMLs and codec knowledge will certainly help you.
When you have finally decided to buy your own website, you can head over to Flippa and search for the right website name that fits your business. But when you get there, make sure that you won’t be victimized by newbies and potential troublemakers. Check the feedback on the seller of the website you’re eyeing. Make sure that the seller has three successful transactions already, and a 100-percent feedback from most of them. Some buyers are careful with new sellers however to deal with deals on a case by case basis is prudent. Always think that the people are there to hoodwink you into paying more than you should.
Also, do not bid on a website unless you know how to run it. Some websites are more complicated to run than others. If you don’t have the experience and the skills for it, don’t buy a website just because it looks good on paper. You can also check out the websites, so that you will know if it is legitimate or not. There are a lot of online websites that can check and verify the authenticity of a website. Try to look into the website’s statistics also. Make sure that the website you are bidding on have already established followers.
The two last telling factors of a website’s validity are the documentation that a seller can provide you and his/her verified Adsense income. Since Flippa now has the Adsense income option, you can then verify whether their website is fake or not. It is easy enough to do, especially with Google analytics.
Making a bid on a Flippa-listed website
Once you have finally verified the authenticity of the website you are eyeing, it is time to start bidding on it. Depending on the size of the website you want, bidding period may go from a few days to one month. It would be wise to bid on a website that only has seven days of bid period. You don’t want to spend a month waiting for the bidding to close. Once you have signed up on Flippa, it’s time to make your first bid. See what other people are bidding, and review how much the seller wants for the website. Balance them out and place your first bid.
Your first bid should be higher than the last bid, of course. Don’t place your maximum bid because you may even get the website at a lower price than what you are expecting. After you have finally placed your first bid, you can now wait for the other bidders to place their own. Depending on how much you are willing to shell out for a particular website, you can challenge other bidders by placing higher bids than them.
Flippa works just like any other auction process. If no one else challenges your bid, then once the bid closes down, you will get a notification that you already have the rights to buy the website. After paperwork and payment transactions are processed, you will have access to the website already.
The recent performance of Flippa:
The graph below from compete.com accessed via SiteTrail indicates that Flippa may have experienced a loss of interest of near 40%.
Possible reasons for Flippa’s reduced traffic:
With Flippa’s results dominating Google searches, it is doubtful whether this significant drop in visitors could be attributed to Google updates such as Panda. Unless this was a seasonal drop or a reduced effort in marketing, here are some thoughts:
Buyers bypassing Flippa:
There is a sense that buyers are starting to look for alternatives and approaching sellers directly, effectively bypassing the Flippa auction process where prices are driven by emotion, this way buyers can focus on a fair valuation.
Flippa and “the American dream”:
Whilst there are methods on Flippa to verify factors such as Adsense revenue, one has to bear in mind that Flippa receives revenue from every advertiser, hence it would not be profitable for them to remove bad deals from their listings. Many sellers are attempting to sell the dream of what a site “could be making” to others rather than what a site is making. Some sellers have web properties that crashed from earlier high levels – attempting to sell on what a site “was making” historically. Overall up to 70% of the listings sometimes are bad deals and it is hard work to filter through to the point where the good 30% could be verified.
Flippa automation and the human touch:
Flippa also earns a commission on each sale, in addition to it’s listing fee, hence systems are automated to push for a sale. Sellers and buyers are more interested in a human managed process where they can speak to someone by phone, as there are issues which falls outside the limitations of systems, hence reputable brokers may be preferred over an automated auction which receives a commission but is not available for phone support and intervention.
Look on the bright side:
Buyers who use the tools wisely and perform analysis prior to becoming emotional will find buying a profitable website much easier than buying and inspecting a house or a vehicle, for example partner apps such as Google analytics are very reliable for the purposes of verifying revenue and traffic. Flippa also offers an well drafted agreement which could save buyers and sellers legal fees.
To conclude: The Flippa story is a great one, there are many happy buyers who acquired great businesses, It must be said that market may reach a point where it could require Flippa to innovate to a point where it takes greater care to highlight the estimated 30% of sites which are considered excellent buying opportunities. Flippa could be one of the great ways to grow a portfolio and reach goals, or could be teaching some rather expensive lessons – as always, buyer beware.
Using SiteTrail analysis to evaluate traffic, potential website value in USD and several other hidden details is a great start to buying any web property. The SiteTrail valuation method does not apply to all web properties, however it is at least a good indication of the minimum value of a web property.