Fee Squeeze At Flippa

Fee Squeeze At Flippa

Posted on 02. Dec, 2009 by Michelle in Site Flipping, Virtual Real Estate Development

Today’s post is in response to a question Kiran asked about a recent change that Flippa.com introduced. Thanks for your question Kiran, it provided me with the inspiration to write this post.

Here’s Kiran’s question:

Hey Michelle, awesome post!

I was just wondering, even though you have every criteria in place, some sites may not sell. So, do you recommend re-listing them for 30 days on flippa now? The free listing has been taken off by flippa.

At least with the 30 days, you stand a chance to sell the site.

Initially, I list my sites for 7 days.

Your thoughts would be much appreciated

Thanks

Kiran

As discussed in my reply to Kiran, I’m disappointed that Flippa removed the free relist entirely. Sure, there was a need to clean up the new listings page as it was quite messy with new auctions and make an offer listings all mixed in to one, but I’m not convinced that more fees is the answer.

Here’s Flippa’s reasoning for removing the free relist:

Automated Private Sale Listing Remove

In an effort to keep the focus on quality new listings in the Flippa market place, we have recently removed the automated private sale listing functionality. Up until last week, if your website didn’t receive a successful bid by the time the auction completed, we would automatically change your auction to a private sale listing for free.

From now on you will have the option to either re-auction your site or list it as a private sale listing for half price, a $9 listing fee. A private sale listing can be active for up to 6 months.

Well unfortunately the new listings page still has private sale listings on it which was the grievance I had about the free relists to begin with. So although the new fee will price some sellers off the new listings page it still doesn’t clean up the page completely to focus solely on ‘auctions’. To achieve a clean ‘auction’ marketplace the private sales could simply move onto their own tab, almost like a classifieds listing page, preferably free but paid for if Flippa believe this will force more quality into the marketplace.

But alas, I don’t make the Flippa policies and this change is something that doesn’t look like is going to go away and with that in mind I think Kiran’s question is a very good one. So what do we do?

Kiran’s suggestion to list for a longer period of time is valid as it will give your listing a chance at being viewed by more potential buyers, however there is less urgency for potential buyers to act unless you offer a good BIN (buy it now) price.

You can make a BIN bid more enticing by offering BIN bonuses such as extra unique articles, PLR (private label rights) article packs, social bookmarking, extended free hosting or even offer additional PLR ebooks for the new owner to promote on their site.

Additional costs really can take their toll on your return on investment, especially selling at the lower end of the market which can start to feel like a bit of a fool’s game at Flippa when you factor in all the fees. There is more to this business though than the simplistic calculation of the difference between the costs associated with your site sales and the final bid price.  There are many ways to earn income from your buyers outside of the Flippa marketplace. :) I’ll post about some of the ways you can make money after the sale in a future post.

As always, if you have any thoughts or questions I’d love to hear from you, just add your comments below. :)

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12 Responses to “Fee Squeeze At Flippa”

  1. Ruth - Web Career GirlNo Gravatar (14 comments)

    02. Dec, 2009

    You know how I feel about this relisting being taken away, I think it’s terrible. I could write a massive rant about this now, but I’ll stop. As for what’s the best way to go about selling, I liked your comment response. I am like you and want to get it done quickly! Look forward to your next post!

    MichelleNo Gravatar (232 comments) Reply:
    December 2nd, 2009 at 2:20 pm

    Ruth I’m certain we’re not alone in our feelings on this issue. Ranting is tempting isn’t it but best we concentrate on our circle of influence, the things we can change rather than the things we can’t.

    Your initial listings sell through quite well so hopefully you won’t have to face this additional cost burden too often.

  2. E. FireNo Gravatar (2 comments)

    02. Dec, 2009

    More reason for developing options outside of Flippa.com

    MichelleNo Gravatar (232 comments) Reply:
    December 2nd, 2009 at 2:35 pm

    True, however there are a lot of reasons to persist with them too.

  3. Mark MasonNo Gravatar (2 comments)

    02. Dec, 2009

    It is pretty clear to me that Flippa is not interested in the low-end part of the business. Maybe you should consider starting a site just for that.

    MichelleNo Gravatar (232 comments) Reply:
    December 2nd, 2009 at 8:15 pm

    Mark I still think Flippa are interested in the lower end to a degree however some of their decision making seems haphazard which certainly makes for a bumpy ride. Yes I could start a marketplace just for low end sites but that isn’t something I’m considering at this stage.

  4. SakanaNo Gravatar (4 comments)

    02. Dec, 2009

    Well…Flippa is not the only game …

    A quick G search and here is a list where one could leverage

    SitesIndeed.com

    DealaSite.com

    BizBuySell.com

    VotanWeb.com

    BuySellWebsite.com

    WebsiteAuctionHub.com

    WarriorForum.com

    Webmaster-Talk.com

    Forums.Digitalpoint.com

    MichelleNo Gravatar (232 comments) Reply:
    December 2nd, 2009 at 9:59 pm

    As you’ve quite clearly shown, alternative marketplaces are a dime a dozen, each of them with their own set of pros and cons. (I warn anyone considering any of the above sites to give due diligence to assessing the pros and cons/risks of those marketplaces.)

    I’ve had great success with the Flippa marketplace and just because I’m vocal about their policies does not mean I suggest walking away from them. They are an industry leader and their impressive results speak for themselves.

    Flippa Stats As At Dec 4 2009:

    * 1,117 ListingsOpen Now
    * 1,137 BidsLast 7 Days
    * $186,770 SalesLast 7 Days
    * 40% Listings SoldLast 3 Months
    * $28,643,898 SalesOverall

  5. KiranNo Gravatar (7 comments)

    03. Dec, 2009

    Great post Michelle.

    I’m glad you posted this, because it just gives us all a different angle to work with. Change will always happen, it’s just how you adapt.

    A positive we can take out of this is, that we can look at more ways of improving our sites and service to be more desirable to potential buyers.

    Look forward to your next posts.

    Cheers!

    Kiran

  6. MichelleNo Gravatar (232 comments)

    03. Dec, 2009

    Thanks Kiran.

    Yes, we are going to be looking for ways to improve our sites and services to become more desirable to potential buyers….and what does that do to the Flippa marketplace? Improves it of course. :) Great outcome but only if we can create those improvements and services at the same time as preserving our profit margins.

  7. E. FireNo Gravatar (2 comments)

    03. Dec, 2009

    I think Mark hit the nail on the head. The silence on Flippa’s part – and all this coinciding with an apparent personnel change(?) – would indicate a change in their marketing strategy, that being to focus on high end, high ticket web properties where they can collect a nice-sized success fee.

    Realistically – looking at it from Flippa’s perspective – it might not be great PR, but it would likely be more cost effective – and profitable – to focus on high-end sales and let the thousands of “starter” and lower-priced sites fall by the wayside – 80/20

    It would be good to know Flippa’s intentions here… but they don’t appear to be speaking.

  8. MichelleNo Gravatar (232 comments)

    03. Dec, 2009

    There are a lot of assumptions being made here which I’m hesitant to perpetuate, however I do understand that feeling of needing to ‘make sense of it all’.

    I see no connection at all between the personnel change you mention and a strategy to only focus on the high end auctions. If that were so I wouldn’t have thought an entire post on Flippa’s blog about purchasing a start up site would be the way forward.