Justin Cooke

May 31, 2012

Don’t want to sell with Flippa? Sell your site with the Empire Flippers.

If you are at all involved in building, buying, or selling sites you’re bound to have heard of Flippa.

For the uninitiated, Flippa.com is the largest market for buying and selling websites online.

In 2010, they had almost 20K auctions and almost $21M worth of sales.  In 2011 those sales grew to over 26K auctions and just over $31M in revenue.

And while they are certainly the juggernaut when it comes to online website auctions, you’ll see other bloggers mentioning alternatives and hundreds of people asking about where else to go.

Yes, you can list your websites for sale at other auctions, but you’re not likely to find a buyer.

Actually, I’ve often wondered how they ever managed to take over this niche market.  Why didn’t eBay squash them like a bug?  They definitely had the means and justification to do so. eBay was well known for gleefully towering over the corpses of their competitors.  So…why didn’t they do the same thing in this case?

There are some serious problems with both buying and selling that have many users grumbling about their service.  Don’t get me wrong…we’re fans, but we did want to point out some of the issues, join the conversation, and see what we can do to provide feedback that improves the buying and selling of websites.

Update 11/15/12: This blog post generated a lot of attention from both fans and haters alike.  Many of the issues below have since been corrected or addressed 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.

Flippa’s Failures

Poor Buyer Protection

They’ve gone to some lengths to provide more information for their buyers (e.g. Verified Google Analytics, extended due diligence information from Alexa, SEOMoz, etc.) but they need to go even further.

As with any marketplace, it’s the buyers that keep the ship afloat, not the sellers.  Remove or lose the buyers and the sellers will quickly disappear, but if you were to remove some sellers from the site others would step up to take their place…it’s just the nature of the beast. Still, their revenue is setup in such a way that they are rewarded with more sellers, not buyers.

Note: Check out our tips for buyers here or our podcast episode about how not to get scammed on Flippa.

Difficulty In Finding Quality SitesDifficulty In Finding Quality Sites

While they do have pretty extensive search options and while there are 3rd party tools that help you dig through the data like FlipFilter.com, a quick scan through their auctions will present a host of low-quality, uninteresting sites.

In our opinion, the types of sites we build should be at the lower end of the spectrum and considered “starter” sites, but you’ll find that most of the sites for sale there are extremely low-end, have no actual revenue to speak of, and are created without any thought for the end-buyer in mind.

Have a high quality website you want to sell for maximum profit? Click here

Lacking Seller/Site Curation

While Flippa does end up banning sellers who scam people and connect or associate accounts where “shill bidding” is suspected (but not proven)…it’s still incredibly easy to sign up for another  account and begin the process of scamming buyers all over again.  As mentioned earlier, it’s the buyers that are critical to their long-term success and not the sellers.

They would be infinitely better for buyers if they were to chop off the bottom 50% of auctions that are currently offered for sale. The problem there, obviously, is that they might be cutting out (approximately) 25-35% of the revenue that comes from the listing/success fees that come from those auctions.  Again, it seems problematic that their goals are not in-line with their buyers’.

Path To Improvement

While the problems are clear, the answers to their issues are not.  Still, there are steps they could test through that would significantly improve the marketplace for their buyers and legitimate sellers:

Verified EarningsVerified Earnings

It’s great that they have a method to provide verified analytics, but it’s the earnings claims that are often suspect. You’ll find sellers providing screenshots of Paypal sales, but who’s to say that all of those sales came from the particular site at auction?

(Tip: Often, scammers will have multiples niche sites that provide all of those sales, but will claim they are all from the site they’re selling.)

I know that as a seller, I’d be interested and willing to pay more to have my earnings showing a “verified” badge from their staff.  My auction would be much more trustworthy and, ultimately, give me a better multiple.

It’s extremely difficult for buyers to keep up on all of the different tricks or scams being run by sellers.

UPDATE:  In less than 24 hours of this blog post going live, they released a statement explaining how they now have the ability to verify AdSense earnings from sellers.  You can check that out here.  Kudos for adding this feature!

Vetted Sellers

Flippa could start a sort-of “Vetted Sellers Program” where some background research is done to verify the people are who they say they are.  They could then provide much more detailed information to buyers in cases that end with a dispute.

I know that as a professional seller, many would be interested in paying hundreds of dollars for this vetting process as it would give a higher level of authenticity to the buyers and increase their trust in what you have to offer.

P.S. Our Marketplace vets every single website that lists with us, even for repeat sellers.

Sell your website on our marketplace here

Curated Listings

I’m not sure how well received this point would be at an executive meeting, but I think a higher quality signal-to-noise ratio would be better for their long-term growth.  Their buyers would be better served if they drastically reduced the number of auctions and sellers from their current levels.  I’ve said this to people privately before, but it’s extremely frustrating having to scroll through listing after listing to get to the sites that are legitimate.

Bury sellers that are not providing valuable sites or auctions to provide a better user experience for your buyers.

Now…where do you draw the line in the sand?  I’m not sure…but I know that even dropping their bottom 20% of regular sellers that provide horrible sites would provide a marked improvement.

Room For Competition?

The path to success is littered with the dead bodies of those who tried to compete. Put simply: It’s not as easy as you might think.

Tons of marketers have tried to create clones or copies to compete, but didn’t realize the heavy amount of optimization and engineering required. Engineers have tried to build a better mousetrap, but failed to realize that the cost to acquire a new buyer isn’t cheap…and Flippa has millions of dollars to do just that.  So…how would you go about it?

Here are a few thoughts:

  • Audience/Buyers First – Those that would be best suited to compete would have a pre-established list of potential buyers.  Established forums come to mind, but well established brokers with large buyer lists would have a shot here too.
  • Niche It Down! – Flippa is so far ahead in the buying/selling website business that it would be insane to compete directly at first.  With their millions in investment and capital, they could squash you like a bug.  Still…you could do to them what they did to eBay, which is niche down even further and serve that particular niche better by becoming THE best resource for buying Amazon sites, AdSense sites, etc.If you’re laser focused on that particular niche, you’ll have a better chance to serve that specific audience better than they can at the moment which would give you a shot.
  • Be Disruptive – Change the model in such a way that they can’t (or couldn’t afford to) compete.  As you know, we like Free but I don’t think that would work here.  Charging sellers listing fees keeps the really bad sellers out.You’d have to find a different slant or model that Flippa simply couldn’t adopt.

We’ve been asked to create our own Marketplace targeting AdSense sites specifically. We did just that and have managed to successfully sell over 98% of all sites that have gone through us.

Check out our websites for sale on our Empire Flippers Marketplace.

Final Thoughts

While there are some significant issues and problems, they remain the best game in town and rightfully so.  They’ve done an excellent job of attracting buyers and sellers and provide a much better alternative to buying/selling sites than eBay was able to provide.  Even with their issues they are not so far off the mark and could continue to evolve.

I don’t think there’s enough value missing that a competitor could provide that couldn’t easily be adopted by their team.

Still…if they find themselves too engrained in their current way of doing business or not nimble enough to iterate quickly they may find someone else attacking them much in the way they carved out their niche against eBay. Time will tell!

Now over to you. What do you think they could do to improve their service for buyers AND sellers? If you were invited to the board room to propose changes, what would you suggest? 

Alternatively, click here and sell your site with us.


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Discussion
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  1. Ryan says:

    For the amount of sales Flippa is pushing I would love for them to step up their customer service. I bought some fraudulent domains via Flippa and support didn’t do much to support my claim with Paypal. I ended up loosing the dispute with the seller via Paypal and I was out $1100. Had Flippa provided proof that they felt the domains were fraudulently posted this might have gone otherwise. The fact that they force the use of Paypal for a BIN essentially forced me down this road where I normall prefer Escrow.com.

    I’m still a customer on Flippa from the buyer and seller side but there are a lot of flaws and from my side I don’t see them as all that active in solving some of these flaws.

    • JustinWCooke says:

      Hey, Ryan

      Definitely feel for you on your $1,100 loss…that’s pretty horrible. It’s tough that you were forced to go through PayPal for the BIN but, to be fair, we use that as well in our auctions. We’d rather do that than deal with someone who isn’t serious and have to re-post the auction.

      • Ryan says:

        You guys are in a much different place than Flippa when you force the Paypal BIN being that you have skin in the game.

        When Flippa forces the paypal BIN they have no skin in the game. If it goes sideways it doesn’t affect them. If you guys go AWOL on the transaction there is plenty of opportunity for repercussions from the buyer.

        I like many of buyers and sellers on Flippa would love for them to step it up and force every seller to put a little skin in the game. Step up the verifications and make sure sellers are vetted and not crooks. I’d gladly pay for a little buyer protection in what ever form they offered such as a bond or holding fee.

  2. Flippa is definitely a better place for selling than it is for buying. Way too many people scamming there and fudging numbers, etc. I think that the reason eBay isn’t stomping on Flippa is that eBay does a lot to protect the buyer from scams and has “eBay buyer protection.” It would be a pain for eBay to have to deal with all the variables that come with dealing with an intangible product. Is it fair to want a refund if the site gets slapped by Google 2 weeks after buying it? Different people have different opinions. With physical products there are only 2 questions: did the product arrive at your house and was it in the condition it was described?

    I definitely see a lot of room for improvement here. It would be a tough thing to compete with Flippa, but if Mark Zuckerberg didn’t make Facebook because it would be tough to compete with MySpace, where would we be?

    Thomas

    • Well here’s a solution for you then — eBay buys Flippa and uses it customer service experience to make it better. Everyone is happier in the end, except the sellers who see their profits eaten up by high fees.

      • Hmmm interesting point. I would say that it would come down to the 80/20 rule for eBay – the website sales would cause 80% of the customer service issues for only 20% or less of the income. That’s how I see it anyway – Who knows what’s in the mind of eBay…

  3. Tyler Herman says:

    I wonder if adding a moderator who vets all sites would help. Or as a seller you can pay a fee to have your site vetted so potential buyers know you are legit. Also stop letting people post sites under a username and make them post under their real name or as a real business.

    • Your first solution is not very scalable, especially at Flippa levels. It would be tough.

      Love the second idea though. Force poeple to post more info about themselves too — LinkedIn, Facebook, and Google+ profiles can be fakes, but at least it provides some research material into who the seller is.

  4. Jonathan Tate says:

    As I’m reading this post I’m posting an auction on Flippa, sure there’s some risk…but for both buyer and seller. I had a buyer try to spam my auction due to me not giving him the buy it now price he wanted. I’ve also sold a few at a price that made me sick.

    I think you guys have definitely figured out the best model to flip, build a solid following and sell the sites direct. Of course, I’m sure it sounds much easier than it really is…

    Thanks for the great content guys.

    • It’s not easy, but it is doable. Start with a message and keep attracting readers, listeners and others through quality honest content. Don’t try to sell them anything either. Wait until you have good stuff!

  5. Clinton says:

    “Those that would be best suited to compete with Flippa would have a pre-established list of potential buyers. A site like the Warrior Forum or Experienced-People.net ”

    Thanks. We started a marketplace at Experienced-People.net yesterday! :)
    http://experienced-people.net/forums/showthread.php/8345

    What’s more, it’s completely, 100% free. No registration fee. No listing fee. No success fee.

    And because our focus is buyers, listings will be pre-moderated / vetted. We don’t want to serve junk.

    We started this largely because of the frustration our members (buyers) face with Flippa. Most of the best improvements in Flippa over the last couple of years came from buyers at our forum. However, as you’ve spotted, the flaw is in the revenue model. When the bulk of your revenue comes from sellers, you have to appease sellers and allow them to sell any old junk (much of it flavoured with scams).

    Kudos to Flippa for adding new features like Verified Analytics and Verified Adsense, but that’s not the answer. Due diligence is like the security game. When you’re protecting the president’s life you have to be lucky all the time… but the terrorist needs to get lucky just once. There’s no point Flippa blocking the odd opportunity for fake data – like via providing Verified Analytics and Adsense – if there are a million loopholes elsewhere to trip even experienced buyers.

    The answer lies in cleaning up the market, banning a whole bunch of sellers, moderating listings, not giving the false impression of safety by providing one or two “verified” stamps… I could go on.

    >>It’s extremely difficult for buyers to keep up on all of the different tricks or scams being run by sellers. Flippa has the knowledge and skillsets required to actually provide this value to their buyers.
    You’re mistaken. Flippa don’t have the vaguest idea. They are good at making money on the marketplace. When it comes to buying and selling websites I probably have more experience than the whole lot of them put together …from the owners to the managers to the support staff. And I make no claim to be the world’s top expert either.

    • JustinWCooke says:

      Hey Clinton!

      I was about to say that not having a listing fee would be a HORRIBLE idea, but if you’re vetting the sites/sellers you’ll be able to weed out the junk. Still…this would be a pretty time intensive process, eh? Starting off it might not be that bad as you won’t have many listings, but managing a manual vetting process without charging for it would be unsustainable at some level, right?

      I know that Flippa does attempt to protect and educate their buyers, but yes, I think the fact that they get their revenue from the sellers puts them at odds a bit. I think they’re taking a step in the right direction with verified earnings but yes, they do need to go a bit further.

      Still…Flippa has the audience. They’ve made it. Wouldn’t we be better off trying to help clean up Flippa? You’ll get some action on your buy/sell section of the forum, but you’re a LONG way from competing. I wonder if that time, effort, and energy wouldn’t just be better spent on trying to fix something (Flippa) that’s not completely broken, just flawed. (IMO)

      I do think that the guys at Flippa are in a great position to help vet sellers. Ok, maybe not the low level support guy that handles requests, but the guys running Flippa know the market extremely well and have the users to provide MOUNTAINS of feedback.

      • Clinton says:

        Hi Justin,

        Two and a half years ago when we started the forum, people predicted it couldn’t last long without some form of monetizing. It has not only lasted but grown massively and recently acquired and merged the only competing forum around.

        Experienced-people.net isn’t competing with Flippa. Flippa is about having thousands of listings and making thousands of $19 listing fees. We can concentrate, as we have with posts and members, on quality rather than quantity. Flippa is designed for sellers. We are focused on buyers. Flippa will list pretty much anything if you have $19 as long as you don’t list it anywhere else. We charge $0 and focus on only the best opportunities no matter where they come from, even Flippa. If volume of submissions grows I have put in place systems to deal with it. The last thing we want is tons of listings. We tried it in the early days of the forum when we were almost unknown and got inundated with submissions. We’d get even more now if we opened the floodgates to any old junk.

        Any marketplace that gets the bulk of its revenue from sellers isn’t a marketplace for a buyer to trust for unbiased advice. We’ve had numerous threads in the past discussing specifics about the “education” at Flippa which I won’t go into here.

        >>the guys running Flippa know the market extremely well and have the users to provide MOUNTAINS of feedback

        That I can agree with, no question that they have mountains of feedback and data on users and sellers. I do hope they use it sometime to clean up the marketplace, clean up the quality of sellers and sites and reduce the fraudulent claims sellers make on their platform (not to mention improving the customer service that we get so many complaints about. I see there is one in the comments here from a Ryan as well).

        >>Wouldn’t we be better off trying to help clean up Flippa?

        That’s not my concern. We’ve tried helping Flippa clean up for the last 2-3 years, but it doesn’t work. We’ve got thousands of posts we’ve exchanged with them at our forum. I’ve given up. If they clean themselves up, great. Honestly, they’d be nobody happier than I! It would make our job of finding only the good listings much, much easier.

        We aren’t Flippa competitors, we are simply buyers looking for quality listings and looking for genuine and worthy sites to buy. What’s more, listings at our forum will be treated like proper businesses – buyers and sellers are put in touch with each other and reach agreement on price and terms in private. The gameshow of a public auction is suited to $200 “turnkey” sites, not million dollar businesses (several of which have ALREADY sold at our site).

  6. I wonder if a lot of the listing spam issues Flippa has couldn’t be fixed by:
    – Only allowing domains that have been registered for at least 2 years to be posted
    – Cutting down on the “Success” fee and having a higher up-front fee

    • JustinWCooke says:

      Hey Matt!

      It’s an interesting idea…you’ll notice below that Clinton has included age requirements on his forum. (12 months for established, 6 months for new)

      You gotta think, though…that would be an AWFULLY expensive policy to implement at Flippa, eh? They DO have a 3 month requirement (If the site is less than 3 months old you can’t claim earnings and it’s considered “new”) How many sellers/listings would they lose?

      I tend to like the 6 month / 12 month rule. I think 6-12 months old IS a starter site. (This is the age of many of the sites we sell…usually 3-9 months range) Two years, though? Man…our sales cycle would be MUCH longer, heh.

      • I’m sure they would lose a pile of money in listings, which is why they’ll never do it. It would be nice if the added a site-age filter (or maybe they already have one?)

  7. Christopher Verzonilla says:

    excellent post.

  8. Btbuzz says:

    I agree with Thomas on Flippa being a sellers market, It’s fine for buying and selling adsense sites for low investments, but if you want to bye and play with the big dogs
    I would go somewhere else to invest a large stake, Also them agents pushing real estate on there are no better then the scammers selling them over inflated deals. Don’t trust pay pal shots, you should be able to go right in their pay pal accounts and see whats really going on. I personally feel them thieves should be horse whipped for ripping off people along with the agents that helped them.

    • JustinWCooke says:

      I agree that scamming is a problem on Flippa. The more they can do to protect their buyers the better off everyone will be, including legitimate sellers. There is an element of “Buyer Beware” and they have to take some responsibility, but having scammers blatantly scamming those that are new to the industry is bad for the industry as a whole, I think.

  9. Hey Justin (and Joe),

    Good reflective article and thanks for the mention. I always find it strange how certain people take pleasure in attacking Flippa, but fail to recognise that it has maintained market dominance with literally tons of failures around it.

    There’s a few interesting approaches appearing like marketplaces for Apps only, and I think there’s an ecommerce only marketplace about to launch too. There’s also tons of new brokers setup who specialise in mid sized online only businesses so it will be interesting to see how it all pans out.

    Justin

    • JustinWCooke says:

      Hey, Justin…thanks for stopping by!

      Much of the Flippa-bashing you’ll find online seems to come from resentful sellers that were (rightfully?) banned. There are some from buyers who felt they were ripped off too, but there seems to be less of those. I’m not sure there are ACTUALLY less though? My guess is that it might be that buyers are uncomfortable admitting they bought a lemon…they do feel that some of the responsibility lies with them and aren’t as public about it.

      Since posting this article, some of the best feedback I think has been centered around the fact that Flippa targets the uninitiated and (as I stated above) their revenue model doesn’t seem to match the love/care they should have for buyers.

      There are plenty of issues surrounding both the problems and the potential solutions I’ve mentioned above. For example, wouldn’t a vetting process make buyers MORE confident and assured in their purchases when they buy? What liability/responsibility would that put on Flippa for implementing such a vetting process? Should a marketplace really be involved in something like that?

      Either way, the guys that created Flippa are super sharp, even if there’s some controversy. We’re fans of 99designs, but there’s no shortage of designers that HATE/DESPISE 99designs and what they refer to as “Spec work”.

      • Clinton says:

        That’s spot on about 99designs, another site from the same owners. I like 99designs, but I can understand designers hating it. I suppose when you’re an industry insider, you have a different perspective and can see nuances that others can’t.

        Flippa is a large marketplace but it’s a niche marketplace that attracts a small fraction of website for sale. Forget the Facebooks of this world. MoneySuperMarket.com sold this week for double the entire volume of business done on the Flippa platform since Flippa was started. I know of at least two $500K+ sites that sold in the last week outside of Flippa.The big sales don’t happen at Flippa, they happen *discreetly* at various other locations. In fact, even with the smaller sales, only a fraction happen at Flippa. Part of Flippa’s success is the visibility from the auction format – the “gameshow” – that sellers of higher quality properties absolutely despise and most avoid. Another part of Flippa’s success is that it’s heavily promoted by people who stand to gain from it because they have some association with Flippa or because they have an info product in the space that’s reliant on Flippa’s success.

        A vetting process isn’t a holy grail solution. There are numerous ways fraud and deception on the Flippa platform are allowed and this has been the subject of considerable discussion at numerous locations, not just our forum. The buyer is the one ultimately responsible for due diligence, not the marketplace. Caveat Emptor, as usual. But if you’re not doing seller vetting then you shouldn’t be doing buyer advising. A marketplace that “advises” and “educates” buyers (with biased information) is not far off an abattoir owner being in charge of herding sheep.

        • RJ Cid says:

          Id like to chime in here with my 2 cents. I worked with real estate investors for quite some time as their property finder and wholsaler. ANf from that experience, I learned that the best deals are not on websites or announced anywhere. As a wholesaler I constantly had to find buyer and sellers. Buyers always want and pay more for non listed property. Basically, if i was a true investor or mogul, id rarely look atflippa. Sure a site may be good, and yes I did deals from sites that listed properties, but rarelynif ever wasvthere a deal. Alas nothing beats the feeling of finding and negotiating directly with sellers a, d buyers. All that said, I reeaaallly want to start buying sites and im looking to maybe sell a few to get started, my approach would be similar….find non listed sites. Chris guthrie buys that way. Als smart investors look everwere and have go to ppl like justin and joe who can hook it up.

  10. JasonReviews says:

    I like website, well informative, good for newbies.

  11. Ophelie at Flippa says:

    Hi Justin — great post, and thanks for chiming in on our latest blog post. As you mention in the amendment to your post, we recently introduced Verified AdSense (I’d love to give you guys credit for the idea, but we’ve been planning it for quite awhile, and soft-launched it almost a week ago :) which removes some of the uncertainty in buying an AdSense website.

    I’d like to address a few other points, if you don’t mind:

    – Buyer Protection: our Head of Customer Support, Danny, bans many users every week, and we’re constantly developing ways to identify and ban repeat accounts. Unfortunately, once the transaction occurs off-Flippa, we’re unable to retrieve the money (or ownership of the URL and content). Most disputes of this type happen when the transaction doesn’t happen over Escrow.com, which is a poor decision for large transactions.

    – The difficulty in finding quality sites: this depends on whether or not you know what you’re looking for. Our Advanced Search function (at flippa.com/search) lets you weed out sites you know you won’t be interested in. I put together a short video on this: http://www.youtube.com/watch?v=837dgxbdaCY

    Why don’t we chop off the bottom 30% of websites on Flippa? Revenue has something to do with it, but we also know that some buyers are looking for exactly this kind of site. Sure, they are basic sites with little traffic or revenue (if any), and may not be what experienced website owners are looking for. There is still demand for them.

    – Verified earnings: as mentioned above, we’ve introduced Verified AdSense, which draws data directly from the AdSense API. We have also just modified our Terms of Service to prohibit sites with less than 2 months of revenue to claim it — this should take care of the “$1000 in 4 days!” listings.

    – Vetted sellers: the next best thing to manually verifying each seller is for buyers to do a thorough check on the seller, via feedback, transaction history, off-Flippa reputation, and phone/Skype chats with them. There’s, unfortunately, a limit to how much vetting we can do, beyond banning known scammers.

    • JustinWCooke says:

      Hey, Ophelie, thanks for stopping by!

      Yeah, a friend of ours was teasing us on Facebook about how we must be SOOO important that we mention it and Flippa changes it within 24 hours! Lol…of course that’s not true, but it IS pretty cool that we had some concerns about it and (unbeknownst to us) you guys were working on a fix there…sweet!

      To comment on your points:

      1. Buyer’s Protection – I definitely understand (and see) that you ban users/sellers, but I see people blogging about and talking on forums about how easy it was for them to create another account and go right back to doing what they did before. I know that must be a constant problem for you (whack-a-mole comes to mind) and I’m not sure how to fix…but it seems to have gotten worse as Flippa has grown.

      2. Finding Sites – I did mention that your search functionality is pretty extensive (which it is) but I think it’s a bit confusing as well. Tools/Training on that is quite helpful. I have to say that I LOVE your “saved search” function…it’s AWESOME…but it’s not readily apparent when you go to search Flippa, only after you’ve done the search. Adding that you can save the search on the actual search screen would make more people aware of that feature, I think.

      Feature Request: Google Analytics has the ability to save a templated dashboard just the way you like it. Couldn’t you do the same thing for “saved searches” with Flippa? That ways guys like us and FlipFilter could give links to searches we found useful/relevant and they could have that search automatically saved in their profile…

      3. I don’t have a very good answer for your “If they want those bottom 30% of sites why shouldn’t we give it to them” issue. Maybe it’s not so much the bottom 30% of auctions that should be dropped but the bottom 30% of “shady sellers”. The definition of a shady seller would need to be fleshed out and quantified, but I think that might help.

      4. Verified Earnings – Verified AdSense is (IMO) a GREAT first step there, for sure…as is not allowing claimed earnings for under 2 months of revenue. (You implemented that a few months ago, I think?) It’s much more difficult to do the same with things like Paypal payments, Clickbank, etc…but as a seller, I know I’d be willing to PAY you to help someone verify that for me…it would likely get me more buyers/interest. Something you could test through maybe?

      5. I disagree a bit about there being a limit to what you’re able to vet. There might be some liability issues (and a question as to whether you’re providing more harm than good if you’re putting a stamp of approval on sellers) but I think there’s a way for you to actually make money from this by charging for it. Still…if there are some auctions/sellers that are “vetted” that don’t turn out that well…that might hurt some trust…tough one there.

      Anyway, really appreciate your thoughts!

  12. […] should see a marked traffic improvement in June with our plan for sales on our BuyOurSites page, Flippa auctions, and a push to post more content in the coming […]

  13. Rob says:

    As a Flippa seller I have no issues with the recent changes they’ve made especially as it relates to sellers who are out to take advantage of buyers (especially newbies.)
    However, I do think that it is a two way street. What I mean is that from my experience, I’ve had new buyers with little or no feedback choose NOT to pay. So yes, you can dispute the sale with Flippa and hope that the resolution comes through in your favor in a timely manner, but in the meantime, your time is pretty much wasted because a buyer decided to back out. In addition, until the buyer BUYS, its the seller on the hook for the listing fee not the buyer.

    So while these controls are great for a buyer, I think Flippa should also tighten controls for buyers as well by auto charging their credit card when the auction is won or at least getting the buyer removed from Flippa if they don’t pay.

    • Totally agree with you here Rob. Flippa really does have to make the payment part of the transaction happen within their system. It seems only fair. As a seller I would be willing to pay the credit card transaction fee plus some to have guaranteed payment.

  14. rubayet says:

    hey nice information! i hope that this will be helps us to find new idea which am i needed.thanks for ur nice post.

  15. Adam White says:

    Justin, just read your post. Thanks for the shout out to Prosperly. Since I have been so outspoken with the problems at Flippa they seem to have been making strides fixing a lot of the problems that people have.

    I did a web show episode about scam auctions happening there and a week after I posted that they changed their policy about claiming revenue which directly counteracted how people are getting scammed.

    Their still not perfect by any means but I don’t think they are taking being #1 for granted any more.

    Adam

    • JustinWCooke says:

      Hey Adam…thanks for stopping by!

      Yes, it must be hard being #1 in the buying/selling sites niche and then to ALSO continue to be innovating, but it does seem that in recent weeks/months they’ve been making more of an effort there, which is great to see.

  16. […] from Flippa.com – Ophelie noticed the attention our blog post “The Problem With Flippa” was getting and left a few interesting and helpful comments. We started emailing and talking […]

  17. […] 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 […]

  18. Geoff Akerlund says:

    Hey, nice post. I would just like to comment that Rick Latona has already done most of this at latonas.com. They also host webinars so potential buyers can ask questions of the site owner.

  19. Mark Heik says:

    You should start using Pricell.com now as they released a month ago. They are much better and i support them as much as i can. They are also much cheaper, currently free to use so that’s awesome. I hate flippa because of their pricing and stupid changes.

    Mark

    • With only 18 mostly low end listings at the time of this comment, I can’t really recommend people use this marketplace. There simply wouldn’t be enough buyers to get the right price for your property.

  20. Monique says:

    Hi Justin,

    I should have read your post a week ago, I just bought a website on Flippa that I paid a couple of thousands because it had a great monthly revenue and a lot unique visitors.

    Turns out, it has NO VISITORS AT ALL, it is either me or visitors from the same ip address(fake generated visitors).

    I filed a claim with Flippa (waiting 5 days), if it is not resolved, then I will file a claim with the ACCC in Australia.

    Lesson learned, I will never be fooled by fake revenue and visitors again.

    • Sorry to hear that Monique, I hope Flippa resolves your issue. Keep us updated on how it turns out.

    • RJ Cid says:

      Monique, my budddy got fooledinto a site for 2k and was not really hearing back from flippa. The seller was banned but I figured him out and he went on to sell under aliase. anyways, my buddy was able to call his credit card company and file a complaint they responded him the cash and he enever did anything with the site. good thing he bought with a credit card they help him because it was filed as fraud

  21. […] The Problem With Flippa – 1,170 Pageviews […]

  22. Very helpful post. I am in the market for an established site (not a startup) and this information was useful. I will go to Flippa with this knowledge now.

  23. I confused sell not to sell? What is my website worth from 0 to 1.00 dollar but with Flippa I will pay them to list my website and I assume the net result will be selling it for $1.00; I will only lose 28.00 plus the money I have already paid for the site. What a deal.

    JC Prevost

  24. Irfan Haque says:

    Well I’m not sure whether the freemium model would be disruptive or not but I’ve just launched my startup (currently in beta phase)(http://websfort.com) which provides the platform for website owners to sell their entity in a classified way. We went a step further by bringing the three pillars of the Internet i.e. Blogs, Websites and Donains under one roof and cleanly differentiating it. I would request you to kindly examine it and suggest me the ways to make it more effective.

    • Justin Cooke says:

      Hey Irfan,

      Your biggest challenge will be attracting buyers and the best way to do that is with great sites for sale and honest, interesting content. It’s not an easy (or cheap) thing to tackle and many have failed. Best of luck to you…

  25. I think Flippa services need to improve at the point of verifying websites. There are many tools for analyze the website. However, there should be admin controlled verification technique need to be added for retrieving fake information about listed website. Also cloned and fake sites must be banned for selling because of there was so many frauds are happening by sellers, Seller verification is another option for improvement.

    Some buyers are confused to buy a quality website, so there should separate quality website list based on verification and previous reputation of website.

    • Justin Cooke says:

      Hey Nepster,

      Better qualifying and categorizing of sites seems like a good move. I don’t know if not allowing certain types of sites is a good move (What if buyers WANT that type of site?) but categorizing them appropriately might be a good idea.

      The problem is that they’re a marketplace or auction house. Do they really want to be in the business of picking/choosing which sites are allowed to be there, which sites are not, etc.? I don’t think they do…

  26. John Hinkle says:

    I’d like to know how so many websites listed on Flippa, under the “Just Sold” category are being sold for 5k, 10k, even 20k+ when it’s extremely obvious that their fake crap sites! Everyday I see some site that sold for 10k with no organic traffic, 2-3 screenshots, Alexa rank well over a million, no PR, etc, etc, etc. How does this happen?

    This is obvious shill bidding on the sellers part, but don’t they have to pay a fee at the end? To make it more obvious, these so called high priced sold auction sellers are from India/Indonesia with less than a few auctions listed.

    • Justin Cooke says:

      This has really confused me too, John…I’ve wondered about this.

      “One man’s trash is another man’s treasure” or so the saying goes…but it does seem that some sites sell for outrageously trumped up prices comparatively and I didn’t get it.

      I’ll take a stab at an answer:

      Having a $5K, $10K, etc. site sale under your belt establishes authority. These sellers will create a shill account, and “buy” the site from another user name. You have a period of time to actually pay the seller fees…so they use that time to sell (scam) as many buyers as they can with their fake social proof.

      I’m guessing here – not based on anything in particular…just seems like one possible explanation.

      • John Hinkle says:

        Yeah, I guess that is as much of a valid explanation as any. Makes sense. I’ve done some research however, and find that some of these sellers have 5-15 sold websites under their belt, so that may be true for some, but for others………..well I guess we’re left in the dark on that one.

        Coming from a buyer and a sellers standpoint, there’s something fishy going on there, just can’t put my finger on it. When doing research, it really is hard to tell what type of sites and niches are doing well in the Flippa marketplace due to this fact. The results are just so skewed.

  27. Robert J. says:

    Hi,

    I never used Flippa because there are too many fraud indian and asian… I prefer a website broker, mine is http://www.bizbroker24.com

  28. Tim says:

    I am a frequent user of flippa but have not bought or sold anything yet. I am particularly looking to buy websites but found out after thorough research that too many sellers are trying to overprize or game the system with fake information and fake bids (at least in my market). You just need to put the pieces together. Now flippa even took an important piece of research away. The history of closed auctions seemed to lack data. Many closed auctions are not found anymore. So i cant take historic information about past auctions and sellers into calculation.

    • That’s because most Flippa auctions reveal the URL. Many internet marketers were going back through successful auction, finding good niches and basically copying the site. For free. So after a successful auction, the buyer was asking Flippa to take down the details. Makes sense to me. This is why we started our marketplace in the first place — we don’t want to reveal the URL. Sure you could use a private auction, but it’s tough to get traction in those.

  29. limin says:

    I have a few old domains to sell. Believe that they have great values. I myself are out of online world and occupied with my spiritual practice. If anyone out there can help me with the sales and make some good money out of it, I will be happy to hear from you. Email liminsong808@yahoo.com

  30. Neil Cassels says:

    What I’d like to know is what legal protection there is, if say, someone falsified PR, or earnings or whatever in an auction. Obviously it would depend on where the seller is located but it would reassuring to know if you bought something then the seller would risk legal prosecution if they provided false details to sell a business.

    • I’m not a lawyer, but my guess is there really isn’t much legal protection. Even if you got the seller to sign a contract, your ability to enforce would really be the issue. Are you going to hire lawyer to chase someone down halfway across the world for $5k?

      Better to do your due diligence up front and know who you are dealing with. If they have a track record of success you should be able to work with them without and problems.

  31. Evan says:

    been away from flippa for a while, I tried to list a website today, and I couldn’t believe the fees. Did flippa really go with 10% on established and 15% on new sites ?

    Flippa is not completing the sale through their end. and they are not really providing any protection.

    Flippa is driving both sellers and buyers from their platform.

    http://www.PandaCashBack.com

  32. liltigerlilie says:

    Hey Justin,

    I wish

    • Justin Cooke says:

      Sorry to hear that. :-( How exactly did you get scammed? There are some things that Flippa does that I don’t like, but sometimes it really does come down to issues between the buyer/seller that are a bit outside their control.

      Just so you know, we do allow sellers to list with us:

      http://empireflippers.com/empire-auction-assistance/

      There’s a fee and your site has to be approved, but maybe this would be a better alternative for you?

      • liltigerlilie says:

        Thanks for replying, Justin. I’m not a seller, but if I do, I will be sure to come back here… if I choose to sell off Flippa. I’ve read that many sellers get scammed as well.

        So my story is that the seller sold me a website and after I paid (but before they transferred it over to me) they went behind my back and sold the exact same website under a different domain name and with slightly different logo. Otherwise, the content, layout, images, and words were verbatim.

        I had no reason to not trust this seller in the first place. They only had 1 recent negative review. That wasn’t a huge red flag, but now I know it should be when using Flippa. Since they took over a week to start the transfer, I started digging and found other accounts which had horrible reviews for doing the same thing they did to me. Their sites were delisted from Google for duplicate content.

        I filed a dispute and lost because Flippa’s terms state that they don’t get involved with fully transferred sites. Flippa also REMOVED the negative review I left for the seller. As of right now I’m waiting to see if Flippa will remove the negative review the seller wrote for me.

        The seller had the audacity to message me afterwards saying “Do you really think it would be profitable for a web developer to sell a
        unique site for $150, when it would have taken around a week to
        develop? I don’t know what line of work you’re in but I need more than $150 per week to live.”

        Umm yeah I get that, but I would understand if one used the same theme, but images, content, color, & pages? That’d be plagiarism if it came from anywhere else since this design isn’t licensed.

        So this is just a huge mess, and like your article states, Flippa stacks the favor towards the sellers – and is still doing that. It’s time they take a flea bath to rid themselves of the pests giving them a bad name!

        • On the sub $1,000 I’m betting this kind of thing happens all the time. It’s not right, but sitebuilders in this range feel they have the right to sell a site more than once to make up for their costs. It’s one of the reasons we have a $297 vetting fee — sellers on the low end will realize it’s not profitable to sell with us (and would never be approved anyway).

    • I just filed a Better Business Bureau complaint with them, they essentially stole my money. Hopefully your issue is resolved but their support lacks tact and has a “tough luck” tone.

  33. Dave Fitzgerald says:

    I am reading through these comments and can’t help but notice that Flippa is the same today as it was two years ago. I am trying to buy my first site. Here are my thoughts. How can they justify their business practices? Once you purchase a site, you are pushed toward escrow.com to finish the transaction. The transaction starts with an “inspection period”, and finishes with a closing. This is somewhat like real estate except that imagine closing on a house before you could have an inspection or walk inside? They tell you that you must pay because you bid and won. However, I specifically asked my seller if there was a right of rescission. He said that was what the inspection period was for and that I could reverse the sale. I backed out of my sale because I found out numerous things that led me to believe I was misled (albeit inadvertently). Flippa forced him to pay the success fee though…. I don’t get it. hurting your customers is not a great business strategy.

    For my second near bid, I decided to do a background check. Turned out the seller was convicted of numerous felonies for spamming…. awesome…

    • Justin Cooke says:

      Hey Dave,

      Wow – I can’t believe Flippa kept the seller’s success fee. That doesn’t seem right to me. My guess is if the seller makes an issue about it with Flippa they won’t charge him the success fees – probably just confusion on their end. Tell the seller to reach out to support and explain the situation – I’m guessing they’ll make that right. (Let us know if they don’t, though!)

      Interesting on the background check – sounds like you might have dodged a bullet there, eh? Although I WOULD add that being convicted of spamming felonies years ago doesn’t NECESSARILY mean anything bad about the site you’re selling today. It’s not a good sign though, heh.

    • Steve says:

      The seller shouldn’t have to pay the seller fee if the buyer backs out. This has happened to me on a couple of occasions. Just let support know the situation and they’ll investigate and make a decision.

  34. […] that take a more negative slant like The Problem With Flippa and AdSense Account Disabled don’t convert […]

  35. Dom Wells says:

    Hey Justin,

    Dom from HumanProofDesigns here. You just stopped by my site and left a comment on my Flippa review, so I thought I’d come back here and continue the discussion.

    I think the biggest issue with Flippa really is something you highlighted, the lack of curation. They’ve done various things to address this, but their “due diligence” isn’t anywhere near good enough (if at all), and their fairly recent addition of the “super seller” tag is kind of amusing. I’ve seen people selling junk, but because they had a bunch of positive feedback, they got the “super seller” rating.

    Have you ever noticed how about 95% of the feedback comments are given as soon as the transaction is complete? “Nice transfer process” “Professional” and so on. There’s rarely feedback on whether or not the site performed as expected.

    At the end of the day, the whole “Bid with confidence” slogan would be a lot better if they really could guarantee the quality, which is something I know you guys do. You might ask for a higher listing fee, and list things with a higher earnings multiple (20x monthly earnings I think?), but that’s well worth it for both parties, knowing that they are getting value.

    Cheers for this article, and cheers for stopping by my site.

    Dom

    • Justin Cooke says:

      Hey Dom,

      Nice to see you stop by! It’s been quite a while since I wrote this article and your points definitely ring true.

      The comments/feedback aren’t terribly helpful, for sure.

      Our problem today is finding enough quality sites and sellers to keep them in stock. Once you knock out many of the crappy listings, it’s harder to find the quality sites – especially in the $10K – $100K range where many of our buyers are.

  36. Steve says:

    The problem is Flippa is making a ton of money from these listings, whether they’re good sites or not. Do you think they will do more to filter out these crappy listings?? Nope.

  37. Flippa is terrible. I’ve had various issues with them.

    #1 My account was suspended moments after i paid a listing fee to sell one of my domains. Apparently an account i had used in the past (and one i wasn’t aware was suspended) was the reason for the suspension. Flippa essentially took close to $100 from me and suspended me then basically told me “tough luck” in regards to a refund.

    What’s interesting is that they said they tracked my account due to similar payment information (ie: paypal account). This leads me to my next point.

    #2 I was hired as a Digital Media Manager here in Miami Florida. I started an account with Flippa so my new company could engage in auctions.

    We verified payment information via credit card and everything seemed fine. Then the account was suspended. Flippa claimed that this company account was similar to my suspended account and informed me it was due to “logging in at the same computer” which means they flagged my IP. I did log in from home to the company account to check a message which prompted the suspension.

    And here is my point:

    Flippa had the capability to trace IPs and apparently does so. So why did they not do this with my other account in regards to posting a site. They waited until after i paid money for their listing to divulge an issue and then kept my money.

    Not only did Flippa lie but they still kept our money all while accessing payment information. While I am sure the site is secure it is still uneasy to know someone is accessing your information all while conducting business the way they have been.

    Just a heads up Flippa is full of spammers and often times, the website quality is terrible. They are more and more becoming a reflection of these websites

    • Yikes, sorry to hear about that, Anthony. We’re always afraid of potential misunderstandings/miscommunications between us and our customers. Sometimes emails and Zendesk updates go to spam folder or just don’t get delivered at all.

      Are you still trying to get in touch with them to get this all sorted out?

  38. […] The Problem With Flippa […]

  39. […] Rolling With The Punches – 7,262 pageviews Income Report – September 2012 – 3,538 pageviews The Problem With Flippa – 1,049 pageviews AdSense Flippers Monthly Expenses – 891 […]

  40. Nice article… One thing I hate most, always the talk about buyers protection, never about the seller protection!!!!
    I was an active seller and buyer on Flippa. But decided to comment publicly in my auctions about fees, support response, lack of interest from Flippa’s site in anything what is going on, how Flippa supports groups of fraudulent sellers etc…. I was due to my comments banned from the site (having a 100% rating by that time).
    Also the amount of money Flippa is taking from your sale (it mounts up to 50% of your sales) after you relisted the site for the 5th time, they get there cut, no matter what.
    Super seller bagdes are handed out to peole with a track record of being involved in deals with buyers/sellers being banned and suspended.
    A lot of auctions are listed, but basically the first 60 auctions take up more than 50% of all bids on the site. TODAY – 86,747 Listings open now on Flippa – with just 10,374 Bids in the last 7 days . So you can imagine if you will have a bid on your auction !!!! The facts mean that each auction just get 0,125 bids !!!!!!
    Also the sales which have been completed (in my view most of those are just fake, have a closer look at stockphoto.com which was sold for 250K $ , JOKE!!! )
    No registration fee is in place to indentify both buyers/sellers with a fee.

    Support on Flippa is non-existing!!! Complaining to them, will just waste your time…

  41. Nathan says:

    Flippa.com have some of the worst customer service I have ever experienced. I don’t think any competitor would find it hard to compete with them and crush them in this area. it’s fine at the moment to be rude to your customers but once a strong competitor does arrive on the seen and actually challenge them, they will very quickly lose market share and respected clients.

  42. […] The Problem With Flippa – 1,369 Pageviews […]

  43. Mohamed Ali says:

    Very true. Few days back I inquired Flippa why they do not have any sort of price control on their sellers as one seller gave me extremely high price for a site. Here is what Flippa had to explain to me:
    ——
    Hi there,

    We do at times perform regulations for assets that we feel are priced unreasonably, but once again we cannot force a seller to change the price. Ultimately the auction process will and should reflect what potential buyers are willing to pay for a site. If a seller is to find the right buyer this may reflect higher and if not then possibly much lower.

    As we do at times reach out to sellers with suggestions we do not set the price ourselves as we are a platform that tries to promote entrepreneurs – negotiation is a large part of the auction process. I do understand where the concerns lay though and aside from the open marketplace we have both our Deal Flow website brokerage team as well as our Domain Holdings domain brokerage team who work to try and find the right buyer for their seller’s at a price negotiable to both parties.

    You can see more about both our brokerage teams here –

    dealflow.flippa.com
    flippa.com/domain-broker

    Please let me know if you have any further questions, greatly appreciate your feedback.

    Cheers,
    —–

  44. […] counterintuitive as it sounds, it’s actually for your protection. Our deposit system protects your potential investment in a new website for a plethora of reasons, […]

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