In the past year, Flippa.com has become a major player in the domain name sales business, so I thought I would share the experiences I have had with them.
Over the years I have bought and sold around 100 websites on Flippa.com, starting back when it was just a section on the SitePoint.com forum named SitePoint Marketplace. In 2009 it spun-off into a separate website and they added a lot more features. Ever since then it has been the leading spot on the Internet to buy and sell websites. What is amazing is that there has never been any real competition for it. If you want to buy or sell a website, it is the only place worth going to.
Personally, I have not found buying or selling websites on Flippa to be very profitable, but at least it is very easy. Many of the sites being sold are really good deals, because the owners are selling for a good reason, like they need cash for an emergency, got a full-time job and no longer have time to run the site, are having health problems and can’t run the site anymore, or can’t handle the web hosting. I did not have any sites I bought where it turned out the seller was trying to scam me, although I know that does happen. On average, I would say the sites I bought made only half as much income as the sellers claimed they were making, and traffic generally went down in the year after I bought them. Almost every site was a big project to move to my server, so I highly recommend trying to take over the seller’s web hosting account so that way you don’t have to deal with moving the site, or at least not right away. I also many times would ask the seller to change the ads to use my ad code instead of theirs, because otherwise by the time I moved the site to my server and figured out the programming enough to know how to change the ads, many weeks would pass. If you have a talent fixing up and getting traffic to sites that need help, then you could make a lot of money flipping sites on Flippa. It is just not something that I was good at. I was good at the technical and business parts of taking over the sites, but not at adding value to them.
As for selling sites, for the low $19 listing fee (plus a 10% commission if it sells), your site is almost guaranteed to get some bids (Flippa uses an auction format, although you can also have a fixed “Buy It Now” price). The sites I have tried to sell get bids much lower than I hoped for, but if I were desperate for cash at least I would be able to sell the sites to somebody. I have never had much luck trying to sell sites on my own, and there are very few brokers who sell sites, so using Flippa is the best option.
More recently, Flippa has started to handle a lot of domain name sales, and they are trying to expand this business even more right now (I know this because I am in contact with some people who work at Flippa). Because Flippa uses auctions (which have a limited duration), the sales prices of their domains are lower than the typical prices domain brokers try to get, so there are some good deals to be found for buyers. Also, I am not sure of the stats for website sales, but for domains, the majority of large Flippa sales are negotiated after the auction is over, when the seller is more desperate and willing to accept a lower price. So, just because a domain does not get sold, don’t give up, make the seller an offer instead. As a domain seller, Flippa is not the first place I would try to sell my domains, but it is an option worth trying. Because you can set a hidden reserve price (the minimum you would sell it for), you have nothing to lose other than the $9 listing fee per domain.
Here’s 3 of my recent Flippa listings:
Weights.com – It ended up selling for $36,500.
Physical.com – I am hoping to get at least $40,000 for the domain. I paid $42,500 on Sedo.com for it back in May of 2011.
TipTopTens.com – I am selling this site and 13 other WordPress sites as one big package. I paid over $120,000 for these sites from various sellers over the past few years. My reserve price is $10,000 but I am hoping they will sell for a lot more. The sites get around 100,000 visitors a month combined, and have around 3500 unique custom written articles. UPDATE: It sold for $11,600.
Eric,
how many people do you have working for you full time?
You seem to have dozens of projects at any given time…
How do you manage?
I have one full-time programer/server admin, and one full-time programmer who is working on special projects for me (basically new sites I am working on that use complex technologies such as neural networks, speech recognition, or face matching). But, I don’t have anybody who helps me run the sites or run my business. I do everything myself. So, that is part of the problem as to why I am not good at buying sites and improving them, or why I have let many of my older sites die from neglect.
At various times I have hired people to help me run specific sites, but I have never had anybody help me run my entire business.
Yes, you need some administrative help…
Maybe a couple of people running the day to day business.
I have the same problem and this is why I am building my new office so I can have more room for 4-5 people.
I don’t have time to do anything. All my ideas are buried.
I need at least a couple of people to help me.
I have money making ideas and no help. Real ideas…
I work from home and have done so for 20 years, so I really don’t ever want to have an office.
When I have had people work for me (remotely), much of the time I have not found that they do a very good job.
I don’t think that has so much to do with not having an office though, I really just like being in control of everything by myself. It is not that I think I am better at everything, because as can be plainly seen, I suck at getting traffic to websites for example, but when I hire people to do things they tend to do it badly or screw things up, even exposing me to potential legal problems or things like possibly losing my Adsense account (which would be devastating for my business since 90% of my ad revenue is from Adsense).
I do have much better luck hiring contract programmers and other similar workers (such as graphic designers), but that is because over the years I have become good at managing projects like that. I rarely have problems in that area.
I also had the same problem, bought more sites than I could manage and let many die of neglect, even when I had more employees to look after them all it was hard to manage effectively. My solution was to reduce my portfolio, sell off the sites I know I’m not going to take care off and try to limit my investments to bigger, or more interesting sites. Worked better, but still lots of room for improvement.
Finding good employees and keeping them is a tough job when you try to do it remotely. After a while you learn to do it all yourself, and just get frustrated seeing how the new employees tumble at simple tasks, but generally that’s not a good way to grow the business..
Yeah. We are the same. lol
I work from home too for the past 14 years but my new office will be on the ground floor of my home. 🙂
I will probably keep my home office too.
I like being in 100% control too but I think it is time to let some trivial stuff go.
Either that or I will go crazy…
There are things to let go without jeopardizing your business.
I agree. with opinion regarding flippa. Additionally, I would never think managing 300 sites on autopilot is a good idea. All you need is network of the most about 5 sites to manage. More than that, you lost money on by shifting your focus elsewhere.
A long time ago it was much easier to get sites listed in the search engines, so having lots of sites got me lots of traffic. That method no longer works.
You’re right Eric. SEO is a lot harder and more time consuming today than it used to be. Back then was less competition and you didn’t have Google releasing all these animals into the wild.
Now, it’s better to focus on a few sites and grow them. There’s no way you can run 100’s of websites on your own sufficiently.
I do understand what you mean by wanting to do everything on your own though.
Eric,
Why are you wanting to sell those sites and domains at a loss?? Is it because of the new g’tld’s?
No, it is mostly because I have done all I can with them, like trying to sell them for a big profit and building income producing sites on them, and none of that worked, so they are worth a lot less to me now. Also, the concept of “selling at a loss” is not really what is what is important. They are worth what they are worth. What I paid is not really what matters. I could hold out and hope to get a high price from an end user, but i also might end up waiting 10 years for that to happen, so I decided it is best just to sell them now.
It’s rare for website sellers to think that way. Most sellers ignore the real current website value and wait for a big payday, which never comes.
Your new strategy is absolutely correct. I’m a website broker and our biggest & most successful investors own maximum 10 websites at a time. Today, search engines reward websites that publish consistent quality content, which is difficult to achieve with hundreds of sites.
Sell off the loss-making sites and re-invest your time & money in a few of your bigger sites. The profits you’ll make on a few big sites will eventually overshadow any past losses.
Good luck with the auctions! 🙂
Thanks.
Always glad when you post, Eric. Who else in this industry displays — along with the practical insights — such modest candor?
Wow, you actually took a hit of around $100k on that last sale Eric. But the question is, were you able to recover your initial investment from the revenue that/those site(s) were making?
Manmeet
I probably made a total of $25,000 profit from the sites since I bought them 2 years ago, so it is still a loss. But, I am still glad I tried it. I think there is money to be made running sites like those, I just am not good at doing it.
You are right about “making money” part from such websites, however a completely different and better approach is required from us in order to make money by using them to full potential.
With people like us, its “the time “that doesn’t let us do everything! Since we own more than one domain name and have so many things going on at the same time. I’ve always wished there were more than 24 hours i the day 😀
Good luck wit your other ventures!