Justin Cooke

August 28, 2012

A few months ago we wrote a post titled, “The Problem With Flippa” that generated quite a bit of buzz from both supporters and critics alike.  We were balanced in our critique, pointing out both what we thought Flippa was doing right and some improvements that, from our perspective, would make Flippa a better place for both buyers and sellers.

In the weeks that followed, Ophelie from Flippa left some interesting comments on the post.  We ended up connecting and asked her if she’d be willing to answer a few questions we had about Flippa’s business and she agreed.  Aside from appreciating the fact that she gave (some) straight answers, we found Ophelie’s approach to everything outstanding.  She’s a true professional…Flippa’s lucky to have her!

Now…on to the interview:

Flippa is by far the leader when it comes to a marketplace for buying/selling websites online.  You’ve made some positive changes recently and my question is how do you balance innovation without upsetting your current users with an update they might not like? (Think Facebook and the horrible response to the “Timeline” change)

Balancing Innovative ChangeSee, the thing about change is that few people really embrace it at first. Everyone complained about the Facebook Timeline when it first launched, but more and more people have come to appreciate it.

We have made a few changes recently that have been unpopular with some segments of our user base, but overwhelmingly popular with others. Take, for example, our new requirements that users verify their account with a credit card before they can comment on a listing or place a bid over $200. While we have had a negative reaction from some (rather vocal) users, the majority of our users see this change as positive.

The whole team is very aware that any change to Flippa affects thousands of people, so we don’t take them lightly. Overall, our focus is on building the marketplace as a safe place to buy quality sites, and that’s the direction our changes align with. Anyone else who is focused on providing quality for money on a safe marketplace should see the changes as positive.

Performing proper due diligence is important for sellers and critical for buyers to understand when getting involved in the buying and selling of websites.

What are the best resources you would suggest to someone looking to break into this business?

I would be remiss if I didn’t mention our own blog and How-To guides — these are  the best resources to learn the how-tos of Flippa itself, and we frequently host guest posts from knowledgeable website buyers and sellers.

As for external resources, there’s a lot of good information over at Experienced People on how to buy a site and conduct due diligence. WarriorForum.com is a great beginner’s resource, though a lot of the offers for sale are mostly made up of information that’s freely available elsewhere.

More important than relying on any one resource is actually understanding what you’re buying. Do your own  research on web authority, backlinks, revenue generation and traffic sources. This can come from forums like SitePoint.com, official sources like the Google Webmaster Central Blog and the AffiliateTip blog.

Can you share with us which auction upgrades are the most useful?  The least useful?  Also, can you explain why the “Tweet” option is set at $80 and how that’s valued higher than a featured listing? (Opinions are great here, but actual data would be excellent!)

Ophelie Lechat from FlippaSurprise surprise: it all depends on the kind of site you’re listing!

Premium Listings have been selling at a greater rate than regular listings since their introduction last December, partly because they get, on average, 10x the listing views of other listings. We also offer dedicated support on these, including help with writing the sales copy and managing buyer questions.

This is worth it to many high-end sellers, especially new sellers; at between $250 and $500 (depending on the type of listing), it’s typically not worth it for sites that will likely sell for less than $2000.

The Featured Listing option, at $50, is a good idea in the last day or two of a listing, since it adds visibility on the front page of our site.

As to the infamous Tweet option: pricing it at $80 limits the number of people who use it, simple as that. The quality of leads coming from Twitter is greater than from other sources, and that’s partly because our Twitter feed *isn’t* constantly bombarded by tweets advertising low-quality sites.

One thing that will interest AdSense users: the median sales price for Verified AdSense sites is 6 times higher than for non-verified AdSense sites. That’s not even an upgrade — that’s something you can do for free, in about 20 seconds, right from your listing.

Your content is often focused on providing value to both buyers and sellers, but your revenue model is based on collecting fees from the sellers (listing fees, success fees, upgrades, etc.)  Keeping buyers is critical to your success, obviously, but how will this remain balanced with your revenue model?

Well, it’s hard to collect success fees from sellers if there are no buyers around :)

Our goal is always to offer good value for the money. There are new no-fee marketplaces popping up every day, but they tend to quickly fill up with low-end listings, and seldom have much buyer traffic.

As you may have noticed, a lot of the resources we publish on our blog are focused on buyers, and a lot of our customer support time goes to helping buyers find the kind of sites they’re looking for. When sellers are paying their listing fees, this is, in part, what they’re paying for: a large group of informed, interested buyers with money to spend, and the infrastructure to facilitate a transaction.

What accomplishments are you most proud of at Flippa?  In what areas do you see a need for improvement?

We have a really great group of core users, which is an honour. I know I can always ask these users for honest feedback on the Flippa experience and get great ideas on what to work on next. Some users take the time to point out possible scams on the marketplace, even when they wouldn’t be directly affected. That’s more than an auction marketplace — that’s a community.

That community has grown exponentially since we launched in 2009, and one of our biggest challenges has been to keep up our customer support to match demand. We now offer a maximum 24-hour response time during the week, but we’re aware that there is still work to be done on this.

Any projects or features you’re working on that you can share?  (Come on…give us a sneak peek!)

We’ve been talking to a number of frequent buyers on the best ways to monitor their websites, and have a really exciting product coming out in the next month or two that has to do with that. It’s something AdSense users will find particularly interesting!

—–

We really appreciate Ophelie taking the time to answer our questions.  Check out more about our tips for selling on Flippa here.

Now…over to you!  What do you think about Flippa as a website marketplace?  Care to share your experiences?  Let us know in the comments below!


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Discussion
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  1. Paul says:

    Ive been scammed twice on flippa
    Sick of the pure crap and its coming from the same region of the world

  2. Eno says:

    Flippa is an absurdly total crap. Only scammers and domainers who want to get domains dirt-cheap .. like <50$ even though are worth hundreds to thousands of $.
    They'll ban you for make-up reasons, suspend you on very dubious grounds: like because you've appraised a domain name using a text that you wrote and they'll claim you've copied it from some other user's appraisal who ACTUALLY COPIED IT FROM YOU! … yeah .. absurd reasons: not placing original appraisal texts ….
    AVOID FLIPPA, TOTAL WASTE OF TIME!

  3. […] from Flippa.com.  We’ve stalked followed her on Twitter for a while  now and she wrote a guest post for us several months back.  She has that uncanny ability to be everywhere online and we wanted to ask […]

  4. MustBeSaid says:

    Flippa is so full of trash sites that it’s an utter waste of time to sift through them all to find the maybe 5% that aren’t scams or have grossly exaggerated income/ traffic. The only somewhat exception are the sites in the $10K and up range although there are no shortage of scams at those prices either.

    The verified Google Analytics “feature” is nearly worthless. Without showing details such as referring sites, it’s absurdly easy for a seller to buy some cheap, fake traffic to get the numbers up.

    All the PayPal “proof” screen shots that many of the sellers show are also worthless. Anyone can fake these things in no time. The verified AdSense income is ok but few sites have any AdSense income and verify it.

    Basically, as a buyer, you’re left with pretty much no solid info and little way to verify the info that is listed. It’s a joke really, especially when you get into the multiple five figure range.

    As an honest seller, you’re listing your site with so many scam/low quality sites that buyers are overly suspicious right off the bat. You’re also getting hit fees even if you don’t sell which is common since your legitimate listing gets drowned out by all the sketchy ones.

    If Flippa cared about quality, they would disallow sites that don’t offer verifiable traffic and/or income. Basically, you can’t make any claims that can’t be verified.

    But Flippa doesn’t care about quality or the buyer because there’s far more money to be made in listing fees than success fees. So they allow the junk and rake in several million a year from it.

    For full disclosure, I’ve bought 5 sites on Flippa, all with good looking stats, verified Analytics, good seller reputation, etc. NONE of them were anywhere close to the income or traffic that was claimed.

    I’m far from alone, there’s a large and growing number of buyers and sellers telling their stories about their bad experiences on Flippa on various forums. Do some web searches and you’ll find them.

    From the turnkey site trend to the scammy Flash game site trend to the phony forum trend to the auto blog trend, etc. Flippa has allowed their site to be flooded with one tidal wave of clearly scam sites to rack up listing fees.

    Their “solution” has been to increase those fees and claim that reduces the low quality sites. It doesn’t and they know it. Sellers simply spend a bit more effort to fake “proof”, claim the site makes more money and raise their asking price.

    There really needs to be a site marketplace that only accepts quality listings, Flippa is a flea market.

    • We hear you. We share some of the same concerns over some listings on Flippa, though I think your percentages might be a bit off. We are working towards a solution that can help both good sellers and buyers looking for better deals. Stay tuned for details.

  5. […] Update 11/15/12: This blog post generated a lot of attention from Flippa fans and haters alike.  Many of the issues below have since been corrected or addressed by Flippa in the months that followed.  A short while after this post went live, we had the opportunity to interview Ophelie from Flippa.  She gave us the “inside scoop” and addressed many of the criticisms or concerns laid out in this post and in the comments below.  You can check out that interview here. […]

  6. Mark Sojka says:

    I like this post. Flippa is a good marketplace but there is also a lot of crap listings there (as in every popular place) with things like fake income reports and fake traffic stats so you must always check twice what you are buying.

    • JustinWCooke says:

      Hey Mark!

      Yeah, due diligence is required no matter WHERE you’re buying sites. The simple fact that Flippa is the largest marketplace for buying websites means there’s definitely going to be more “crap” on there than other places…but they also have some of the most interesting auctions as well…

  7. […] week, our own digital marketer, Ophelie, faced some tough questions from Justin of Adsense Flippers, including a sneak preview of our next big release. It’s worth a read if you are curious […]

  8. Chris Broholm says:

    Nice interview. I’m not really that much into Flippa yet, but I’m sure I will be exploring it at a later date. It seems like they are working hard to improve the experience, and not just rest on their laurels.

    RE: The crappy sites, honestly if all flippa listings were premium 20x multiple listings then there would be absolutely no fun in it. Not that I’ve tried, but I’m sure its possible to find a gem among the trash once in a while, if you dig deep enough.

    The fees is a problem in my opinion caused by lack of competition. It’s kinda like ebay, where recently I sold a video game for some $400 and paid around $50 in fees. It would be awesome to see some kind of competitor form against flippa in order to increase competition and bring the prices down.

    But I was thinking that you guys can’t be needing flippa much longer? Your buy-our-sites page is super popular, and you seem to have no problem selling usually – this is awesome.

    • Thanks Chris, it is very popular, in fact it’s the most popular page on our site! We will be making some upcoming changes to the sales board including graphs and trending data, so keep watching.

  9. I have not had much experience on Flipper yet apart from looking for sites to buy but I do know there is so much junk on there! if only there was a way to stop people putting up absolutely crap sites up that waste everyones time looking at them. But overall I think Flippa has got a great product with some cool features making it one of the best places to sell your website. Cant wait to start selling some sites there in the next 2-3 months.

  10. HI

    great to hear from the inside.

    With no insult meant or warranted I feels like corproate speak Ophelie.

    Im not a frequent buyer but i might soon be a frequent seller. However Ive often waited 3-4 days when i did have a problem.
    .
    To many sites on flippa are mis sold as being better than they are saying anew site has the potential to make $200 a month is like saying i have the potential to loose 4 stone in wirgh. Both are true but not a true reflection of whats really likely to happen.

    Also the fees are now to high to sell starter sites at $50 and thats a shame (start sites being 1-5 pages sites with great content and some earnings)

    Flippa is a great succes butits getting more like eBay claiming higher fees and suggesting it might keep the rabble out is not true.

    I would also like to see a fixed fee format introduced with a reasonable fee base.

    I for one would like to see a dserious challenge to Flippa. A distruptive model with high listing and zero success would be valid.

    • JustinWCooke says:

      LOL at the losing 4 stones comment, Steve!

      Yeah, we’ve dealt with the CS issues before as well. I’ve run a CS department before and it’s definitely challenging…especially when you’re in a high-growth business.

      I don’t know…I’m with Flippa on the idea that “raising fees helps to keep out the crap” position. I remember the frustration I went through with eBay as a seller…it’s particularly difficult when you’re selling low-margin items…eBay could make more than you were on some sales!

      It’s funny…over the years Flippa has turned from a nice place to buy/sell websites to THE place to buy/sell websites. Early on, I would have said they didn’t have much responsibility when it comes to balance, advancing the entire marketplace overall, etc…but now that they’re clearly and undeniably the market leader…I would say that they do.

      The high listing fee, zero success fee idea is interesting…but isn’t there a benefit to the marketplace if they earn on the success of an auction? That way, they have an incentive to improve their rate or percentage of auctions sold?

      • Hi, glad you liked that. maybe 3.5 but 4 would be a great target :-)

        Yep CS is tough especially on the end of a phone at 3am after a long day been there.

        Well there is a benefit if they make more money. But i dont see the need. Why not just take a decent listing fee and move on. Obviously the ideal is No listing fee and a higher percent take (overall the same or less) and share in the success, but then it gets flooded with rubbish..

        So a fixed price section, 5,7,10,30 day listing periods, tier pricing.
        Id like to see a Minimum site sale price of $50, fiixed listing fee no success. High price sites would clearly pay a higher fee to list.

        No then where is my coder and mega launch guys :-)

    • Ophelie says:

      Hi Steve,
      Rats, I thought the smiley face in the fourth answer would prevent this reading as corporate-speak! ;)

      We tightened the restrictions on claiming revenue a few months back (http://flippa.com/blog/update-to-terms-for-claiming-website-revenue/).

      Sellers can no longer claim potential revenue in their headline or description. We comb the marketplace for such listings, but if you happen to see one, forward the link to [email protected] and we’ll correct it.

      Speaking of our support team — we now respond to all tickets within 24 hours on business days, and respond to urgent tickets over the weekend as well. There’s never a time when the marketplace is left unattended.

      As I mention in the interview, there are new marketplaces every day, some of which have listing fees but no success fees, or free listings and a success fee, or a flat-fee format. They quickly get overrun with low-quality listings, which drives away buyers.

      A quality starter site can go for much higher than $50. For something with a bit of unique content, a good niche and a few backlinks, you should be able to fetch around $200, which amply makes up for the listing and success fees.

      • Hi Ophelie, I feel i can speak for one and all and say I think your smile was appreciated :-)

        I feel like rambling but wont. I think Flippa is the clear market leader, Is not behaving as eBay did when they tried to raise their valuation. Increasing pricess and talking about quality sellers and how the buyer are the customers. YOUR flippa that is customers should be the sellers and sure you should try to protect buyers as well. Nobody here wants rubbish on your portal.

        Anyway I have a serious question. If I create a site with 5 pages of 700 word content written by a very good writer, a standard theme with no header running adsense and making $10 on average per month for the last three month. Your data says It will On average sell for $200?

        I for one dispute that. If you have great brand awareness and a god track record maybe.

        But even then do you take 25%% of the sale price through fee’s?

        thanks for your time

    • Ophelie says:

      Hi Steve,

      Rats — and I thought the smiley face in the fourth question would prevent this from reading as corporate speak! ;)

      We no longer allow claims of “potential” revenue in listings (read about it here: http://flippa.com/blog/update-to-terms-for-claiming-website-revenue). We comb the marketplace for such listings, but let us know if we’ve missed one (at [email protected]) and we’ll remove any such mention.

      $50 sites are becoming harder and harder to sell, and with reason: buyers are now asking for higher quality. There’s no advantage to either buyers, sellers, or us to having many low-end listings.

      Quality starter sites, with some unique content, a few backlinks and a basic design, usually fetch around $200. At that price point, there’s a much healthier margin after paying for development, listing fees and success fees.

  11. Mike Hlatky says:

    Obviously Flippa is a leader in the marketplace. I think they have done well so far embracing that role. I do have a few complaints – high listing fees, crowded with crappy sites, etc. But, overall, I enjoy and use most of the features that Flippa has put in place.

    • JustinWCooke says:

      Good points, Mike.

      It’s the “crowded with crappy sites” thing that I don’t like. The funny thing is that raising the fees helps to FIX that problem, but then you’re pissing off another subset of people, heh.

      Also…”crappy sites” is pretty relative and a bit of a gray area. Sure, some of the sites we would ALL say are crappy, while others would probably get a mixed reaction. No easy answers there…

      • Marc Ashley says:

        Without attacking anyone, what is a crappy site? A site that doesn’t make any money? Look good? or a site that doesn’t rank for example?

        With all of us being individual, taste is different. Theoretically if you were to buy a ‘crappy site’, you can still monetize it, can’t you?

        The problem Flippa has, is that the market is split, they have ‘cheap buyers’ and buyers that are willing to spend thousands. The ‘cheap buyers’ probably make up for the most turnover and also give a lot of sellers, me included the chance to earn some money fast and easy.

        The problem, or at least the problem for me is, the customer usually has absolutely no idea about anything. Somewhere they hear that word ‘passive income’ and assume all you have to do is buy a website on Flippa and voila, you’ll be earning… Only to be disappointed with the seller and Flippa after 3 months.

        That’s why I’ve changed my whole concept even when selling ‘cheap sites’ (no mine aren’t crappy, just cheap), I actually interact, train and help my customers to monetize their sites now because it frustrates me, knowing that once they have bought a website, they have no idea what to do and some of them think they are smarter and a simple fiverr gig shall get them ranked page 1!

        It’s a lot more work, but I get that ‘trust’ we all want and it opens the doors to other products that I sell, such as my website flipping course.

        As for making the listing fees more expensive to filter out the ‘trash sellers’, I don’t really think it works, I still see enough bandits out there still, that post those ‘amazing paypal’ earnings in just 8 days, even though the site is not even indexed. A much better idea would be to introduce a ‘verified Flippa’ badge or something similar, maybe a ‘trusted website badge thingy’.

        If you make ‘verified’ and ‘non-verified’ sellers, it’s almost like saying ‘you’ve been warned…’ and those people who still would like to buy one of those “crappy sites” can. And if you want to make everyone happy, then lower the price for ‘verified users’.

        But again I see the biggest problem, is the uneducated buyer that has this dream he has to do nothing to make money.

        • Justin F says:

          There is no such thing as passive income. You know why I want to sell? Because I put in a lot of effort but am
          unable to monetize the site but in the right person’s hands it could be
          earning pretty well. I simply don’t get the concept of selling sites that earn anything above $1 a month – the monthly cost of the domain name and hosting – any earning above that is pure profit, so why should I sell? Unless I was needing an operation to survive the next day! Any scheme or platform that promises big returns for little work is a big fraud; so is the concept of verified revenue!

          • DaveNL72 says:

            Why sell sites instead of keeping them if they make a profit (after domain,contant and hosting cost)?

            Well i for one like fast profits, and before you have made the profits with clicks that you can make with selling it at flippa (although in the long long term you could get more from your site) i have a beard as long as Bin Laden use to have.

            But you can mix it up, sell of the low and mediocre sites and keep the winners for yourself… have it both ways…

            Dave

        • JustinWCooke says:

          Excellent points, Marc.

          You’re totally right that the definition of a “crappy site” is completely subjective…one man’s trash is another man’s treasure, eh? I have my own thoughts on the issue that might vary wildly from someone else’s. I do think it’s a gray area and there’s a sliding scale…there are those sites for sale that a fairly large majority of us would agree are “crappy”

          You’re right about buyers that think they can do no work, sit back, and make a ton of money. I think it’s wrong to perpetuate that myth, but I don’t feel THAT bad for those who are sucked into it either. They should know better…

    • Ophelie says:

      Thanks Mike. A few things about the marketplace — one man’s crappy site is another’s quality starter.

      It’s very easy to sort out sites you wouldn’t be interested in with an advanced search. You can save this search and have new results emailed to you, or just keep it in your Flippa account.

      There are anywhere from 1,500 to 2,000 listings live at any moment. Obviously not everyone will be interested in all of them, but there’s something for everyone if you know where to look.

    • Ophelie says:

      Hi Mike — well, one guy’s crappy site is another’s perfect starter. But if you’d rather not see a certain type of listing, you can set up a custom advanced search (flippa.com/search) and have new results emailed to you, or keep it on Flippa as a saved search.

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