The flip side of Flippa

flippa

My recent trysts have seen me dabbling with too many work threads on the web. When this happens, I envision (or I believe I envision) an idea much better than what can be executed within a given time frame. The identified work ends up taking in a lot of time and energy, and under the circumstances I gladly take ready references to test/improve upon those ideas. It will be even better if I can find a ready platform to jump-start my ideas.

Flippa is a great source for both.

flippaFlippa is a website where you sell a website, or a domain. It connects website sellers with website buyers.

Selling/buying websites is quite easy. You specify the nature of website you are, specify the minimum expected price, outline the income sources,  and connect with your buyers.  A buyer can browse all the available websites, look at the current and potential value, and bid/buy the property.

Advantage Flippa

Flippa enables all this buying/selling of web properties in one of the more open, transparent, and reliable ways. Flippa is arguably the best in the website brokering business.

Flippa is valuable for me in many ways:

  • Flippa enables me to look out for potential opportunities to own a website that is already delivering value in a niche
  • Acts as a reference for the nature of websites up for sale. The interest generated for an auction/sale, and the final value provide me enough inputs to make inferences on popular and trending niches
  • I can also compare my own websites against similar sites with published popularity numbers and revenue streams

But, some of the sales on Flippa have always confused me. The value tagged to those listings, and the crazy bids that follow, makes an interesting read.

When should you be careful?

Don’t get me wrong. All of the value claimed by the listings may be genuine. The sellers may have worked really hard to get to the point where they are. The said websites may continue to profit, and deliver value to the buyers. 

But, my core point with such listings is “the world is as crazy as it looks”.

the world is crazy

src: http://kristinbairokeeffe.typepad.com/

The listed websites claimed product sales, thousands of visits, and affiliate earnings. But, some of them had unprofessional design, had duplicate/spun/badly written articles, and nothing on the site seemed to suggest the claimed popularity. 

Let me illustrate with examples. I will choose 5 comparatively valuable properties that were up for sale in the recent times. The selection criteria was random, except for the fact that all of the sales have a winning bid more than $2000.

1. onlinewebapplication.com

This particular website has been re-listed 6 times, before getting sold.

onlinewebapplication.com scam

Sold for: $5001

Revenue Claimed: $1000

The Surprise Element: Although the claims of revenue, traffic have been uploaded, I have no idea how it will sustain value over the long term. The website has passable content, but nothing that really stands out as original. Yes, I noted that it is PR 3.

The previous website owner’s photograph continues to reside on the site even after getting sold.

 

2. seosearchengineranking.com

A website that offers SEO packages.

Sold for: $4,402

Revenue Claimed: $3,192

The Surprise Element: The website claimed of successfully selling SEO packages, but did not rank for any of the keywords. The packages lacked lustre, and seemed to be a copy of packages listed elsewhere. 

[Update] This looks like a real scam now – the website has been down for more than a month. The previous owner has been suspended from Flippa.

 

3. new-world-order-plan.org

A channel of Anonymous?

new-world-order-plan.org screenshot

Sold for: $2,525

Revenue Claimed: $349

The Surprise Element: OK, this looks more real than the other ones, and is from a trusted(?) seller. But it is surprising how the website makes all the money. The content is hurriedly written, and the website does not look, or feel good. Though the previous owner claimed he is deeply attached to the website, he also announces that there have been no updates since 2012 other than the video blogs from Anonymous video channel.

The shop is just an Amazon front with an absolutely uninspired product listing. All in all, there may be more than what meets the eye.

 

4. thegiftsformen.com

Amazon-focused site that enables buying gifts for men.

thegiftsformen screenshot

Sold for: $3,850

Revenue Claimed: $200

The Surprise Element: The first point to note is that this sold for almost 19 times the claimed revenue. This is not typical. 

The design looks inspired, but there is absolutely no content. You see a series of pictures, select some categories to see more pictures, and buy the gifts from Amazon. There may be some SEO magic in there, but I did not see them rank high for some keywords. I just did not get how the website can continue to monetize.

 

5. thecatsanddogs.com

Amazon-focused site that enables buying pet supplies.

thecatsanddogs.com screenshot

Sold for: $15,705

Revenue Claimed: $9,572

The Surprise Element: When I saw the website and noticed the power-drill being sold on a pet-focused site, it was enough for me to move on. But, apparently not for some.

The template is just a rehash of thousands of Amazon store fronts already out there. I have no idea why people think they will succeed by opening their mini store without any substance. The products are dumped from Amazon, and that is all there is to it. 

The seller is now banned, don’t know the reason why.

 

Why should you be careful?

The point of the above illustrations is to make you think. Do you really need a website that claims traffic/revenue, but looks terrible and unprofessional?

Be weary about any facts and figures published on Flippa.

  • Website hits/visits may be bought, or generated
  • Popularity on social media (e.g. Facebook likes, Twitter tweets) may be bought, or generated
  • Smaller product sales through the website can be bought, or self-generated by the current owner
  • Illegal backlinks may temporarily boost the website rankings. This may get penalized by Google later

 Use your own tools when possible.

  • Ask seller to share Google Analytics. Although screenshots show you a clear picture, why take chances with Photoshop around?
  • Check out the website keywords, ranking and more using SEOQuake (a free tool available as plugin for Chrome and Firefox)
  • Validate source of back links to the website

 

My advice

Again, the sites illustrated above may indeed be delivering on the profits. But, it seems less likely that the sites sustain interest over long term without dramatical changes. When you are investing your hard earned money in new web property, it does not hurt to be careful. Consider the below points before buying sites on Flippa.

  • Do not start buying websites until you get a feel for it (and of course you have some money). Carefully study the comments by more experienced buyers
  • Do not sell everything including your shirt to get the website. No matter how careful you are, you may still get scammed
  • Think about what YOU can do, other than raking in the cash. For e.g. if you are looking at buying a WordPress template site, you have to at least know what is so great about WordPress templates, your current and potential competion, differentiating factors, and also have a hazy idea about what the future looks like. You should not expect “passive income over the years” without any input from your end

Research, Research and Research

  • Carefully evaluate the seller reputation on Flippa, and elsewhere
  • Search extensively on whether the website was up for sale before, the previous asking price, and what was the outcome of the sale
  • Explore a bit on what the seller is selling for. All that “I don’t have time to maintain the website” comment is old school. 
  • Use your own tools to find out the verasity of claims 
    • where does all traffic come from? Look out for organic traffic over extended periods of time (> 1 year)
  • Go through the website – not the front page alone.
    • how is the website structured?
    • look and feel of the site
    • spun content vs. original. Pick headlines, keywords used in the articles, and search in Google. How many sites have the same/similar content?
    • how professionally is the content written?
  • If you are serious about a buy, but the investment is too high, consider the due diligence report from Flippa. This report consists of research results from professionals, and their opinion about the website

Ask Questions

  • Look at the source of traffic/revenue claims. Although many share these without asking, there are always those few who are secretive. Look out for:
    • reason for unreasonable peaks in hits/revenue
    • presence in social media, and the strategy employed so far
  • Get the seller skype id if possible, and have a chat
    • does the seller sound genuine?
    • what is the reason for any peaks in the hits/revenue?
    • what are the value-based avenues that are working today, and where the seller sees more potential

Payment

  • Get escrow for high valued transactions. It is well worth the money
  • Never pay as Paypal gift or through any other channels that do not allow you to “dispute” the transaction

Evaluate potential of the website

What does the market look like today? How will it behave in the short term/long term?

For e.g. let’s say you want to buy a website full of small, flash games. You see a upside since there are thousands of free games on the website, and users will login, see ads, and play games for extended period of time. If there is even one viral game off the thousands, you have a solid value proposition there. Your research should include both positive and negative aspects:

  • How flash games are faring today (e.g. Flash is not doing good due to security vulnerabilities, and the need for additional software. Flash is not supported in many of the latest browsers, HTML5 games are all rage)
    • Which demographic plays those games? (e.g. people who are bored, but not likely to be young. People who see a old desktop version of the game playable in browser)
    • Potential threats (mobile gaming covers the casual side of gaming nowadays, and they dont support flash. Claims of pirated games on the site)
    • How are you going to change the site? (where can you get new games, how can you popularize the site)
  • Will the website value compensate for the work and energy you put in? How will you handle the changes?
  • What is the cost associated with improvement and optimization?

 

Finally

Ask yourself these three questions at least 10 times:

  • Will I, as a reader, want to visit this website to know something more than what I know?
  • Will I buy product/service from/recommended by this website?
  • Is it compelling enough to share with my friends?

Finally finally, do not get overtly attached to your decisions. Be courageous enough to admit mistakes, and cut losses.

 

Further References

Be prepared to invest time and money to further your knowledge about site flipping before you actually buy a website. Site flipping is one of the many ways to make serious money online, and the knowledge certainly comes in handy.If you are more comfortable going through case studies and structured materials, you should consider going through some of the books/get-rich-quick kind of materials that tell you how to profit by website flipping. If you are a genuine buyer, avoid the listings that exhibit those characteristics. Else, you can always make more money by flipping websites yourself.

  1. Free guides from Flippa
  2. Kelly Cole’s Website Flipping Video Course