I’ve recently received quite a few emails regarding how to use Flippa, what to look out for on Flippa, and the big one – how to not get scammed! With the click of your mouse, all your questions are answered!
Flippa – still going strong as arguably the most popular marketplace to buy and sell websites in 2017. But still, newcomers to investing in websites consistently repeat the same questions, hence, the creation of this guide.
The following topics are covered here:
- What is Flippa?
- What kind of websites are listed in Flippa?
- How to spot a Flippa scam in 5 seconds
- How to spot a sophisticated Flippa scam in 30 seconds
- Which filters should you be using (and which not to use)?
- Flippa’s verification checks – are they secure?
- How to conduct due diligence on a Flippa listing
- Which payment methods to use on Flippa (and which not to use)?
- Flippa alternatives
Have a question, not on the list? Ask me in the comments below and I’ll be sure to respond and add it to the guide.
Ok, most of you probably already know what Flippa is, but for the sake of it, I’ll briefly explain what and who they are.
Flippa – It’s a marketplace similar to Ebay, Amazon, Craiglist, Gumtree, or even your local Sunday morning markets. It’s only different in the type of products listed.
Flippa provides three types of products which it allows sellers to list on its marketplace – Websites, Domains, and Mobile Apps. The majority of users flock to the marketplace for one reason – websites.
Websites are by far the sole attraction for many sellers and buyers, with more than half of Flippa’s revenue originating from them (source).
More recently in 2014, Flippa introduced their premium service – Deal Flow. Their version of a full blown website brokerage service, which claims a 90%+ clearance rate.
Who are they – Flippa was originally founded by Mark Harbottle and Matt Mickiewicz in 2005 as the SitePoint Marketplace.
It wasn’t until 2009 when Flippa was spun off as a separate website. Not 7 years later, the marketplace had reached over USD $140 million in revenue.
Flippa is continuously growing. I snapped a screenshot of their publicly listed stats back in December 2016 which you can compare to one taken in February 2017.
What they do – For most of us, Flippa simply provides the platform to list sites for sale and to buy websites for sale. Of course, they also love to charge fees. High ones at that.
They recently increased their fees again on December 13th, 2016. Take a look below to see just how much they’ll skim off the top if you list or successfully sell a site on their marketplace.
You can’t blame them, however. With such a monopoly over the buying and selling websites marketplace, people will still venture from far and wide to use their marketplace.
A better question to ask would be – What kind of sites are not listed on Flippa?
Browse the most recent, and most relevant listings section and you’ll find just about every niche, every monetization method, revenues from low to high, ages from young to old, and multiples from 10x to 70x are open for bidding.
Open up each of the images below, and feast your eyes upon the vast range of options you’ll find yourself coming across on the Flippa marketplace.
Browse over the following image:
Do you think any of those listing are scams? If yes – why? If no – why not?
All the information (most of the time) you’ll need to determine if a site is a scam is not, is right here on the “Browse Listing” page.
- How old the site is
- How much money it’s making, and
- What the Buy It Now (BIN) price is set at – if there is one
Ok, so with those three pieces of information, what are the tell-tale signs of a scam?
Firstly, the age and revenue. How likely do you think it is that ‘techbet.co’, a new services site, is already making a stable $1,356/month? Unlikely. What about ‘HeartHealthTrack.com’ making $1,537/month through Amazon and Ad sales? Unlikely. Sure, give them a minute or two in the beginning to just make sure, but don’t waste any more of your time.
Second, the BIN. If you owned a site bringing in $1,551/month via eCommerce, would you be willing to let it go instantly for a mere 3x multiple of $5,000? I’ll answer it for you – no.
The chance of a genuine site selling for such a low multiple is practically none. Move on.
The 3-prong combination of those three variables should allow you to easily spot a scam on Flippa within 5 seconds after you’ve gained a bit of experience. Of course, not all scams are so easy to identify.
Scam are so common on Flippa, they even have a FAQ discussing the statement – “I’ve Been Scammed”.
Unfortunately, spotting a sophisticated scam in 30 seconds can’t be done. Otherwise, it wouldn’t be very sophisticated.
You’re best bet to spot sophisticated scams, is through diligently following along with a website due diligence guide. That and the virtual street smarts you’ll unquestionably pick up along the way of your website investing journey will help you stay safe.
If you do believe a website may be a sophisticated scam, feel free to report it directly to Flippa via the report button.
One of the major factors in Flippa’s success is the extensive range of filters you’re able to take advantage of to sift through the sites and find ones you’re specifically after.
As of February 2017, these are the options you can customize when searching for websites:
But the filters are completely useless if you don’t know what they do.
- Keyword – search the title, URL, description, or category of the website and listing
- Website age – how long the site has been running in its current form. The seller provides this information themselves
- Monetization – Ad Sales, AdSense, Amazon, Clickbank, Dropship, E-commerce, and Subscription are the options. Again, the seller chooses which one(s) applies
- Monthly profit – profit (revenue less expenses) per month. Seller’s discretion as to how much they claim
- Price range – the highest current bid on the site. For example, a range of $100-$500 will show all sites with bids currently under $500 even if the BIN is higher
- Monthly users – how many unique users are visiting the site each month
- Monthly page views – total number of pages viewed by all users per month
- Time remaining – how long is left in the auction
- Include only – will only show sites which have one/multiple of the following – Verified Traffic, Verified Revenue, Premium, Reserve Met, Buy it Now
- Revenue sources – options are Advertising, Products/Services, Affiliates
- Vertical (niche) – a huge range of different content categories to choose from
- Website types – different website structures such as Blog, Forum, Review, Directory, Software as a Service (SaaS)
- Sale type – Auction, Classified. Classified are sites which have a BIN option
Now you know which filters do what, you can customize your search for the specific types of sites you’re looking for.
But, of course, you’re here to find out my recommendation. Here’s what I currently use:
>6 months because there’s no reason anyone should be looking at buying an established website which is less than 6 months old. It’s not established.
>$250 monthly profit because it’s just the stage I’m at at the moment. Feel free to lower/increase this depending on your own circumstances.
Lastly, Verified Traffic only because everyone should be using Google Analytics. If they aren’t, 99.6% of the time, it’s a scam. I did the math.
Why don’t I utilize any of the other filters? Two reasons:
- I’m open to nearly all types of sites at the moment, and placing further filter restrictions will limit the amount I come into contact with
- Sellers sometimes fill out the options of the listing incorrectly – a huge opportunity may be missed if one filter has decided to prune it from the list
These are just my recommendations. Feel free to try them out, and if you don’t like them, tweak them. I’m not forcing you to use them, nor am I saying these are the only good filters to use. Merely the ones I’m using at the moment.
Short answer – No. All of the six verifications – Email Address, Phone Number, Full Name, Buyer Certification, Adsense Revenue, and Google Analytics data – can be faked.
Some may be harders than others (analytics), but it can be done.
For the seller, check their transaction history (what type of sites have the previously sold/bought), any feedback they’ve received, any links to other accounts on Flippa, and then reverse search their username on Google to find any further information on them.
For the Adsense and Analytics, request read-only access to both. Some may decline Adsense as they use it for multiple websites and want to keep it private, but all legit sellers should agree to a video walkthrough.
This section is discussed in more detail over on the full guide to website due diligence in the ‘Owner verification’ section.
You’re probably tired of me telling you, but I’m going to point you away from this post and towards the extensive due diligence guide already on the site.
It can be applied to just about any website, and any marketplace in which the website has been listed.
There are three options sellers can choose to accept as payment for their website:
- Flippa Escrow
Whatever you do, stay as far away from PayPal as you can, even as a buyer. So long as you properly do your due diligence, Flippa Escrow and Escrow.com are the way to go.
Flippa themselves even state:
We strongly recommend using an escrow service – this is where payment is collected, held, and released once both parties are satisfied.
But what’s the difference between the two escrow options? Most notably for the seller, the success fee difference.
Flippa strongly entices the seller to opt for Flippa Escrow as it’ll save the seller 3% of the total selling price if a sale is successfully executed, whilst further increasing Flippa’s own revenue.
To a buyer – as long as you use escrow, either option is fine for you. *Note both may charge fees for paying via credit card, and your banks, as well as any intermediary banks, may charge for an international wire transfer.
You’ve read through the guide above, but aren’t convinced. No problem! There’s still plenty of opportunities around the web for you to start investing in websites without using Flippa.
A range of other marketplaces exist including:
Or you may wish to seek out some brokers to assist you directly:
- FE International
All of these are discussed further in detail on the Where to Buy Websites for Sale guide.
Did I miss anything out? Do you have any further questions you’d like answered about using Flippa?
Let me know in the comments below and I’ll get back to you!