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Thread: Can anyone share their experience of Flippa's Deal Flow?

  1. #11
    Moderator Kay is a Premium Member
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    Hi Tim. This is getting to be a habit. And I'm still not fully understanding everything you're saying. So here are today's questions and points for clarification.

    ...we make it clear this does not replace due diligence by the other user.
    I don't see how Flippa is making this clear at all. The words "due diligence" are not mentioned anywhere on the page where Flippa is promoting Deal Flow. (flippa.com/dealflow/) How can not saying something be making it clear?

    On a similar subject, I have been concerned for some time about Flippa's use of the word "verified". The dictionary definition (Merriam-Webster) of "verified" is: "to confirm or substantiate in law by oath" or (more relevant in this case) "to establish the truth, accuracy, or reality of". Flippa often uses the word "verified", yet their meaning seems to be more along the lines of "establish the existence of" without any investigation into the truth or accuracy of these figures which they claim to have verified. Flppa's use of "verified" is not what most people would understand it to mean. Therefore, IMO, Flippa should make clear that they have not established the truth, accuracy and reality of these "verified" figures.

    We do our best to be as strenuous as possible.
    At the risk of sounding like I just ate a dictionary, what do you mean by this? Strenuous just means "exerting effort", or perhaps "working hard"? So, you are trying to reassure the buyer to trust Flippa by saying you'll try your best to work as hard as possible. This gives absolutely no hint or guarantee of the quality or value of the work done. The way it is presented does, however, raise an expectation that the buyer should trust Flippa - a point which I'll pick up on again later.

    In your first paragraph today you say:
    ...we make it clear this does not replace due diligence...
    And in the second para you say:
    It's rather hard to define parameters of our own research and due diligence as each seller and website will come with different information, paperwork and proofs.
    This could be confusing. Is Flippa doing due diligence on these verified sites or not? It's not at all clear. Sure, I understand that Flippa isn't doing DD for the buyer, as would most people here. But an inexperienced buyer, or even someone just finding Deal Flow for the first time, may be seduced by the idea of verified figures and hand selected buyers without looking any deeper at what it really means.

    Given that Flippa is a marketplace trying to selling them a site, no experienced buyer would expect Flippa to be doing DD on their behalf because of the conflict of interest, and because DD is an expensive process. I think the confusion arises about all this because Flippa bandies around words like "verified", "hand selected", and today you threw "research and due diligence" into the pot. It could all be quite simple - Flippa selects suitable sites and shows them to premium buyers. But they surround these activities by talking up what they're actually offering, yet never being able to explain properly what it is. Somehow the customer is expected to trust Flippa to do the right thing.

    But, hang on a minute, Flippa isn't acting as a marketplace in Deal Flow's case. It's morphed into a premium brokerage service. How did that happen?

    ...we're positioning this as a premium brokerage service, you can be confident if there's anything we're not OK with - it won't make the grade.
    How did Flippa suddenly turn into a brokerage service? And a premium one at that! Can anyone set up a premium brokerage service, just like that? I would have thought you'd need someone with a lot of brokerage experience to lead such an initiative. But there are very few people around who have the right skills and experience in brokering online properties - and the successful ones usually have their own brokerage businesses. From what I've learned on EP, brokering isn't just a case of having a bit of experience of buying and selling websites, you need additional skills as well as the considerable experience of brokering deals. Buying and selling websites and brokering is such a small world that everyone knows everyone, so which one of you is heading up the Deal Flow team?

    Mind you, Tim said in post #8:

    The Deal Flow team are Flippa employees part of our expanded team in Melbourne, not contractors or outsourced staff. Flippa isnít working with any other brokers on Deal Flow, everything is coming from us.
    So it's a Flippa Melbourne employee. It's difficult to think of anyone with the right experience who fits the bill. Anyone know who it is? If it's not someone with such experience, then wouldn't it be a managed listing service rather than a premium brokerage service? C'mon you brokers, help me out, what would you expect of a premium brokerage service and what experience would be needed to successfully run such a thing?

    Oh well, not to worry, because:

    ...you can be confident if there's anything we're not OK with- it won't make the grade.
    Here again is the suggestion that you should trust Flippa. But why should anyone trust Flippa? It's not as though they have a good reputation for honest and transparent behaviour. You don't have to look very far to find complaints from unsatisfied customers (and not just newbies who don't know what they're doing) and even allegations of dishonest behaviour. This month, for example, they are alleged to have disguised a price increase as a price decrease.
    http://www.warriorforum.com/main-int...-increase.html

    Getting back to Deal Flow, I'm still not sure what they're offering and whether it's a managed listing service or a premium brokerage service. It's also unclear whether or not they have the experience and skills in-house to run the service. Also, this frequent reassurance that we should trust them does not sit well from a company with a reputation for misinformation and worse. (See Warrior thread.)
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  3. #12
    Administrator Clinton is a Premium Member
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    I wonder how existing brokers and due diligence firms (like the one run by Bryan and Justin) are impacted.

    There's opportunity here for Flippa to promote one DD firm over others. I can see that later morphing into an arrangement where the DD firm pays Flippa a commission for every recommendation. It's a matter of time (if they are not paying it now it's because Flippa is waiting for them to build up some momentum first. Once their business reaches a certain size/profitability and is reliant on Flippa to survive, the demands will appear).

    Once that situation is achieved Flippa can make money from the seller, from the buyer, from the broking, from the escrow and from the due diligence. Talk about conflict of interest!

    Australian law and enforcement must be crap if it allows firms to get away with this kind of activity.
    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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    dsieg58 (23 January 2014)

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    Quote Originally Posted by Clinton View Post
    I wonder how existing brokers and due diligence firms (like the one run by Bryan and Justin) are impacted.

    There's opportunity here for Flippa to promote one DD firm over others. I can see that later morphing into an arrangement where the DD firm pays Flippa a commission for every recommendation. It's a matter of time (if they are not paying it now it's because Flippa is waiting for them to build up some momentum first. Once their business reaches a certain size/profitability and is reliant on Flippa to survive, the demands will appear).

    Once that situation is achieved Flippa can make money from the seller, from the buyer, from the broking, from the escrow and from the due diligence. Talk about conflict of interest!

    Australian law and enforcement must be crap if it allows firms to get away with this kind of activity.
    Aren't they already doing just that?

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    Quote Originally Posted by Kay View Post
    It'll be great if you report back with your progress. Thanks.
    Here is a quick update, as promised. I got approved and received a DealFlow newsletter. Don't think I'm allowed to post any sites here, but they seem somewhat interesting, although nothing really caught my attention yet. But I did click to watch some to see how the auctions go and might put it some bids if the prices are good (I doubt that though, reserves were likely quite high). They look almost like regular flippa listings, with the dealflow stamp on them and I believe they are not available to see for regular flippa members.

  7. #15
    Administrator Clinton is a Premium Member
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    Quote Originally Posted by Kay View Post
    It seems to be increasingly difficult to source good sites to buy at the higher end of the market. Flippa's Deal Flow looks like an attempt to solve this problem.
    https://flippa.com/dealflow/

    It's a way to put premium buyers in touch with sellers of quality sites.

    Has anyone used it? What did you think of it? What did you think about their pricing?
    Just found a detailed, well-written and frank review of the DealFlow service.

    Summary:

    Pros
    • Access to a large group of buyers.
    • Introduced to a series of potential buyers who were professional and genuinely good people (for the most part).
    • Great for selling a website quickly, if the price is right.
    Cons
    • Not a great value overall.
    • My Deal Flow broker lacked the expertise and time necessary to maximize my sale price and experience.
    • Workload for seller is much higher than other options.
    • No expertise with growing web properties.
    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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    KenW3 (18 January 2015)

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    Quote Originally Posted by Clinton View Post
    This is quite a nice review. not that surprising though. It sounds like basically flippa just makes things much more complicated and time consuming for the sellers through dealflow.
    I suppose the flippa fee is higher on dealflow, wonder what it is?

  10. #17
    Administrator Clinton is a Premium Member
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    It is definitely higher. Basically, DealFlow is Flippa's attempt to muscle in on the profits brokers are making so the commission is likely to be broker type commission. From what I hear there is sometimes some negotiation on commission rates.

  11. #18
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    I think the real value to the seller is that Flippa screens the buyers, which they don't do at all in their regular listings. It's been a long time since I've seen anything listed there that makes me want to take a closer look though. Every couple months or so they add another handful of listings, I don't see how that volume is worth their time and effort.

  12. #19
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    Some of the DealFlow listings are overpriced, brokers are slow to respond, and the listings aren't thaaaat great.

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    Quote Originally Posted by ari View Post
    Some of the DealFlow listings are overpriced, brokers are slow to respond, and the listings aren't thaaaat great.
    Over-priced listings and brokers who are slow to respond are not unique to DealFlow. Screening the buyers and the sellers is very different than evaluating the substance of the offering.

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