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Thread: Flippa Affiliate Program - New Dangers?

  1. #1
    Administrator Clinton is a Premium Member
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    Flippa Affiliate Program - New Dangers?

    Flippa Launches Affiliate Program: Post on their blog. Commission = 30% of listing and upgrade fees.

    Good news for those bloggers, siteflipping cheerleaders and Flippa sycophants as they can convert all their existing links to affiliate links. Bad news for the website buying and selling public as there's now even more incentive for the above people to blindly recommend Flippa and exaggerate its merits. If you've arrived at this thread and this is your first visit to our forums, stop for a bit, browse around and don't blindly trust that affiliate link. Flippa can be a great place to sell a site, it's also a great place to lose a lot of money (whether you're a buyer or a seller).

    Predictions: The bloggers and MMO crowd are going to jump into articles, products and ebooks promoting siteflipping as they can now monetise those efforts with Flippa affiliate links. They will encourage sellers to take all the Flippa upgrades like Premium Listing and Twitter spam (as it'll mean more money for the affiliate). They will even bring out "studies" to show that these upgrades are worth it! Expect a proliferation of siteflipping products and a renewed effort to fool unwary buyers and/or urge them to accept unrealistic valuations and take bigger risks. Also, there's more incentive now for career sellers to fake earning stats. And they'll be an increase in new duplicate account creation as existing sellers scramble to open new accounts using their own affiliate links. Sellers earning commission from their own sales can afford to give buyers a kickback in return for, say, positive feedback.

    How come a public affiliate program now? I believe it's because of the dire state of business. Volume of sales at Flippa has nosedived. Based on the "overall sales" figures they publish on their site, in the "quiet" period of May to July last year, for example, they did an average volume of $900K per week. Over the last couple of weeks they averaged $319K per week (all figures excluding NPBs). Over the first three months last year they were showing a success rate (percentage of listings sold) of 61% and above every week, it's been consistently under 50% since December 2012. Last year this time they were selling about 1200 sites per week. That has steadily dropped and it's stayed south of 1000 since July 2012. For all of this year it's been under 800 per week. I collect my own figures which show an even worse picture in some areas, but the above figures are all from what Flippa publish on their homepage and regularly update. These are huge drops by any standards and I guess they're hoping the affiliate program will alleviate this.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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  3. #2
    aka "meathead1234" Thomas is a Premium Member
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    Public affiliate program not a good move in my opinion. It can only reduce quality. There's no incentive for an affiliate to refer a good site (you don't get a % of the success fee, just initial listing) so I agree there will be tons of people promoting them with misleading stats about upgrades and site flipping being great etc. It's not a particularly generous %, though, so I can't imagine many people will be making enough money from it to justify large promotions or paid traffic.

    I wish they gave more incentive to brokers and/or regular legitimate sellers but I guess the profits (at least short term) for them are in quantity not quality. It's just not economical for a broker to regularly list on Flippa unless they really can't sell something privately.

    I think you'd find the drop in "success rates" is due to better tracking from their side on deals falling through more than anything else. I'm still not sure how they get that number, as I would bet a lot of money that FAR MORE than 50% of listings on Flippa don't complete. On sites above $1000, I would be amazed if more than 25% actually completed (purely speculating, I don't know for sure).

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    Chabrenas (13 March 2014), Clinton (6 February 2013), grynge (6 February 2013), Kay (7 February 2013)

  5. #3
    Administrator Clinton is a Premium Member
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    Quote Originally Posted by Thomas View Post
    I'm still not sure how they get that number, as I would bet a lot of money that FAR MORE than 50% of listings on Flippa don't complete. On sites above $1000, I would be amazed if more than 25% actually completed (purely speculating, I don't know for sure).
    I do know the numbers - and it ain't good.

    It's pretty easy to calculate for the public listings. My software simply takes a WHOIS snapshot during auction and, after a "successful sale" keeps checking WHOIS every two weeks for a change in owner - I require changes in multiple fields. You could combine that with other indicators such as changes in site's IP, Analytics ID, name servers etc (which I also track).

    It's not a particularly generous %, though
    Isn't it? I thought 30% was pretty good for the type of "product", I appreciate percentages for ebooks can be 70% or more. Given the low success rates - i.e. large number of sites remaining unsold - it's in the affiliates' interest to not be tied to a successful sale and instead to get their cut based on what the seller is laying out in fees as this is the figure they can push up via recommending sellers buy various Flippa "upgrades".

    The terms and conditions for the affiliate program, for those interested, are bog standard Shareasale terms, Flippa hasn't added anything more to them.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    Top Contributor grynge is a Premium Member
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    Can't wait to see shoemoney, john chow and zac all jump into following some amazing sites that are for sale lol
    And they thought me broken, that my tongue was coated lead, but I just couldn't make my words make sense to them, if you only listen with your ears ... I can't get in
    Non ducor, duco

  7. #5
    Administrator Clinton is a Premium Member
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    Original:
    Affiliates will receive 30% of the combined listing and upgrade fees for sites listed via their affiliate link.
    Small print (in the blog comments):
    the program is meant for new sellers to Flippa, and it is limited to the first listing set up by this user.
    Whoa! Whoa! That's a big difference.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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  9. #6
    aka "meathead1234" Thomas is a Premium Member
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    Quote Originally Posted by Clinton View Post
    Original:


    Small print (in the blog comments):


    Whoa! Whoa! That's a big difference.
    Again, all that does is disincentivises quality referrals. Why would you bother sending quality sites (very few compared to the junk) for 30% one time (not including success fees) when you can send hundreds of noobs who will likely only ever list once and fail to sell anyway (thus, negating any downside from lack of lifetime revenue)? There's no reward for sending quality their way, so the more savvy affiliates will send quantity!

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  11. #7
    Administrator Clinton is a Premium Member
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    Trying to look on the positive side - there is no incentive to encourage people to become career template sellers, and no incentive to promote the creation of sites for resale. That's got to be good, right?

    What all you brokers should do, Thomas, is get together to create your own affiliate program where referrers get a percentage of the sale price/broker commission. You'll clean up!
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

  12. #8
    aka "meathead1234" Thomas is a Premium Member
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    Quote Originally Posted by Clinton View Post
    What all you brokers should do, Thomas, is get together to create your own affiliate program where referrers get a percentage of the sale price/broker commission. You'll clean up!
    I do actually offer that, but I keep it private for people I know/trust. When we offered it publicly (for a few hours!) I used to get complaints from people where "affiliates" had been spamming them promising the world for selling the site so I made it private again. That might work on Flippa, but not for a brokerage that relies on quality > quantity. You have to remember that brokers only get paid on a successful sale so an affiliate model that works for Flippa wouldn't work for me and I rely on affiliates who are trustworthy rather than MMO "gurus".

  13. #9
    aka "meathead1234" Thomas is a Premium Member
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    Quote Originally Posted by Clinton View Post
    Trying to look on the positive side - there is no incentive to encourage people to become career template sellers, and no incentive to promote the creation of sites for resale. That's got to be good, right?
    On the more cynical side, if the people selling these courses know their methods don't work (as they obviously don't) then they will keep encouraging as 99% of wannabe site flippers will give up after 1 or 2 listings anyway!

  14. #10
    Administrator Clinton is a Premium Member
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    It's been a year now.

    Does anyone know of any sites that have affiliate links to Flippa? I checked some of the usual suspects who recommend "flipping" and who used to send visitors to Flippa but their links don't seem to be affiliate links.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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