Flippa: Buy And Sell Web Sites

I’ve bought and sold more than a dozen websites over the past several years, having found much success through Sitepoint’s marketplace especially those times where I needed to sell a larger site, one with a value of at least several thousand dollars. Just this past weekend I began to prepare one of my current holdings for sale, so I headed over to Sitepoint where I found Flippa instead.

Pulling Out Flippa From Sitepoint

Sitepoint is still very much active but they’ve taken the website buying and selling portion of their business and spun it off to create Flippa. FYI, I like the name, as in “let’s flip a” website, because it is short and memorable. And, just like with housing, online real estate can gain in enormous value if you take something that is run down, fix it up fast and sell it.

So what’s so special about Flippa? A number of things, not least that it is a fully dedicated site to buying and selling websites only. I can’t say that Sitepoint fans are thrilled with the move, especially since Flippa was rolled out without advance warning. A thread (since locked) on the Sitepoint forum indicates that a number of users are upset with this practice, especially the “success fee” if your site is sold (more about that later).

Info Moved To Flippa

Because I was already a featured participant on Sitepoint, they automatically navigated my information to Flippa. Well, some of it. I still needed to perform the phone number verification to show buyers that I’m legitimate and I don’t see any record of my previous transactions. I’m not too concerned about this as I can easily provide those links to buyers, if asked. Still, it would be easier if people could see that I have a track record in selling websites.

Visitors to Flippa are encouraged to sign in, but you don’t have to register in order to preview listings, which are split between “buy” and “sell” tabs. Click on a listing and all sorts of information about the site is offered including site name, domain, description, revenue details, traffic and price. Also, Google’s Page Rank, Alexa rank, pages indexed, domain data, seller details, etc.

Listing Details: Steep Fees?

To list a site on Flippa, users must pony up a nominal fee of $19. That amount is low enough to encourage seller traffic, but high enough to keep the cheap, article mill sites out of the listings. Though I didn’t check every featured listing, most appeared to be for legitimate sites that have regular traffic, income and are ready for sale.

Beyond the base $19 fee is what Flippa calls its “success fee” which amounts to 5% of the transaction. This means that if you sell your site for $5000, then Flippa requires an additional payment of $250, which they say is “paid by a combination of the buyer and the seller when the auction concludes successfully.” Flippa caps that fee at $498, with a $5 minimum. So, if you’re selling a $100,000 site, your top fee will be $498, which is .05% of the transaction – in that territory movers and shakers won’t blink when it comes to paying the fee.

Is the 5% fee steep? It can be especially if you have a site that sells for let’s say $6000 and you still must pay escrow fees to safely complete the transaction. Though escrow fees are typically split between the buyer and the seller, they can add up. At $6000, that’s another $300 in fees, so when you’re selling your site, you need to price it accordingly in order to maximize your profit. That $6000 sale may only net you $5600 or so, something that must be taken account when negotiating your price and determining who pays how much in fees.

Giving Flippa A Try

So, will I give Flippa a try? Probably, for the simple reason that I want to expose my website to as much traffic as possible. I could advertise the sale elsewhere for less or come up with my own ad campaign to market the site, but I’d rather have someone else do that for me. I’ll probably upgrade my package too from the $19 basic price to have it highlighted, perhaps featured. That’ll push my costs up to about $60 without guaranteeing a sale. Flippa now automatically renews private sale listings (as opposed to an auction) for free which can help keep your product in front of the eyes of potential buyers longer.

BTW, I’m not going to name which site I’m readying for sale just yet, but I can tell you that it isn’t this website. There is a slight chance I’ll be able to find a buyer without Flippa’s assistance which means I’ll save on fees as well as avoid the hassles of responding to numerous inquiries once that site is on the market.

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What Price To Pay For A Site?

Recently, I was contacted by a business associate asking for my help to price his website. There are so many factors that must be factored in when establishing a price with the buyer carefully examining potential income, administrative costs, and return on investment when tendering her offer.

Monthly Income Is A Significant Pricing Factor

I have found sites listed for as much as 12-20 times the monthly net income average, with 6-12 months also common. This means that if a site is making $400 per month after expenses it could sell for anywhere between $2400 and $8000 based on this formula.

There are some other considerations to keep in mind, intangibles that can determine the price:

• Age of Site — Search engines tend to respect older, more established web addresses.

• Page Rank — Although Google has wreaked havoc with this tool of late, it is still a fairly good measuring tool for any site.

• SERPs — If you dominate the search engine results pages (SERPs) for certain key words or key word phrases, this will add value to your site. Some buyers will only consider Google SERPs, while I like to look at Yahoo! and maybe MSN.

• Is it an Authority Site? — If your website is recognized as an authority for your particular topic, you should be able to command the upper end of the price range.

• Net Income after expenses — Domain and hosting costs should be subtracted plus any advertising or writing expenses required to maintain the site.

• Time I must spend on site — This can be the most difficult thing to gauge: will you be required to spend “X” amount of time on the site every week or can it pretty much run on automatic pilot? High maintenance sites should be discounted heavily.

Use Sitepoint To Market Your Site

Making a decision to purchase a site should not be taken lightly especially when you are talking about paying thousands of dollars for the blog, website or forum. Personally, if I were to sell a site, I would turn to Sitepoint, a webmaster site which I successfully used in 2006 when I sold the Aviation Employment Board and this year when I sold several other websites and blogs.

Happy marketing!