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Thread: height of shill bidding on Flippa

  1. #11
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    Quote Originally Posted by Kay View Post
    There's no chance of it being swift now, Thomas. We don't know how long Flippa has been aware of this problem, but Tim posted about 12 hours ago, so it's at least that long ago. As far as I can see, nothing's changed. The seller hasn't been banned and the auction is still going.
    The auction has since been shut down Kay. When something comes to my attention it's passed on to our marketplace integrity team for them to do further investigating.


    Quote Originally Posted by Clinton View Post
    Howver, we do have to recognise that Flippa benefit from shill bidding. That's the way the charge/fee structure works. So, while in public it pays to bolster confidence in Flippa's "security" and ability to spot shill bidding, isn't it entirely in Flippa's interest to let some shill bidding slip through where such shill bidding can't be easily spotted by other users?

    Then you should spend more time here, shouldn't you? Our members have found, time and time again, that posting publicly here is more likely to get their problem sorted than by sending Flippa support a private email. It also helps that unlike their postings in your Sitepoint forum and your Flippa blog, their comment here is guaranteed to not get deleted if Flippa find it inconvenient.

    Simple question: If the OP could spot this and you didn't why should anyone believe you are serious about blocking shill bidding?
    To suggest we profit and encourage shill bidding is fantasy. Trust is a major part of an online marketplace and we would never do something to betray that. While we acknowledge there's always room to improve when it comes to marketplace safety and integrity, on the whole our users have confidence in Flippa and this shows with the marketplace being the biggest its ever been.

    Our new(ish) pricing structure also reflects that we're more invested in the success of auctions than ever. With lower up-front costs and a rise in the success fee, auctions successfully finishing is what brings in the most bacon. Shill bidders aren't paying success fees.

    I try to drop by E-P as much as I can! And I do my best to answer any questions community members might have. You can also contact me directly at any time via tim.cooke(at)flippa(dot)com.

    On your final point, I'm sure everyone here is aware that staff don't moderate auctions before they are live on the marketplace. There's a chance this might change in the future. But at this point, we have staff members monitoring the live marketplace for shady activity and auctions and rely on the help from our community.

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  3. #12
    Moderator Kay is a Premium Member
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    I'm glad to see that the auction and the seller have been "suspended" now. However, the shill bidding mentioned in the OP had gone on for 12+ days and apparently it's only been picked up now by Flippa because of this discussion on EP. I agree with those who said earlier in this thread that the quickest way to get Flippa's attention is to post on EP about it.
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  5. #13
    Administrator Clinton is a Premium Member
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    tbcooke, you have a cooler head and deliver a more measured response than some of your friends in Flippa have done in the past.

    Shill bidders aren't paying success fees.
    The professional shill bidder, the type you seem to attract, pushes the price up with his shill bidding and pulls back at the last minute to let an unsuspecting buyer end up paying a higher price than he would have normally. That's the point of shill bidding! Are you saying that these shill bidders get their success fee waived? That's a strange concession to extend to con artists. I doubt you do that. If they do pay success fees like everybody else, that's ka-ching for you. It seems to me the more successful they are in their shill bidding, the bigger the ka-ching. I don't understand your point about Flippa not benefiting from shill bidding. Maybe I'm being thick. Would you indulge me by explaining it in simpler terms?

    Perhaps it's your contention that shill bidders always end up being the last bidder on their own auction and therefore don't end up making a sale that attracts the payment of a success fee. If that's Flippa's official position that would explain why you don't use a whole host of commonly available tools (as discussed in the thread I linked to) to detect shill bidders and multiple accounts and ban them. For example we have
    - users' IP
    - Paypal account / credit card used for payment
    - name servers and site IP
    - WHOIS details of site owner
    - who commented on whose auction
    - bidding connections between auctions
    etc etc. I'm sure our members can suggest other giveaways. If you were really interested you could come up with other statistical connections. For example, I have no doubt that some of the dodgiest of your users come from places like India (Being the proud holder of an Indian passport I can say that without being accused of racism )

    To argue that spotting the type of shill activity the OP has spotted can only be done by pre-moderation of every auction seems to me to be an excuse for not using the numerous tools you do have at your disposal.

    ...our users have confidence in Flippa and this shows with the marketplace being the biggest its ever been.
    I suspect, and bear in mind I have research and stats to back up my guesstimates, that your market would be at least 30%-50% smaller if you banned all the shill bidders and multiple account holders permanently. Given the shortage of staff you have to detect shill bidders, would you be interested in our members spending a few hours to moderate for you a list of all the main shill bidders and multiple account holders? That would be a really useful service to Flippa, would it not? Do you guarantee to ban every one of those crooks for at least 12 months?
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    Quote Originally Posted by Kay View Post
    I'm glad to see that the auction and the seller have been "suspended" now. However, the shill bidding mentioned in the OP had gone on for 12+ days and apparently it's only been picked up now by Flippa because of this discussion on EP. I agree with those who said earlier in this thread that the quickest way to get Flippa's attention is to post on EP about it.
    I can see the auction is restored. It seems flippa don't have any proof and the shill bidders are much cleverer to get away. This is how flippa's internal security system work !

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  9. #15
    aka "meathead1234" Thomas is a Premium Member
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    He has been publicly petitioning them on Twitter: https://twitter.com/ChrisParksCO

    I'm surprised they restored that one. Clearly shill bidding. Why would a genuine bidder bid $31,201 on an auction? That's just stupid. Especially for a site making $73 a month. If someone paid $3k for that site they would have overpaid, let alone $30k. I seriously hope no-one genuine falls for the shill bidding and buys the site.

    Would be interesting to hear why Tim restored this one...? Would that not make Flippa party to fraud if the listing closes to a real buyer?

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    This seller has had this level of success in bid multiples for years. I recall investigating the listing and promotion tactics (from press releases to list emails to YouTube videos) of this Flippa seller after reading a FlippingPlanet thread titled Site earns 200/mo sells for 17,000
    I never determined the reason for the multiples, but must admit he has promotion down to a science. There's obviously much more to this.

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  12. #17
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    I'm unable to check-in with the support colleague who decided this case as they are somewhere over the Pacific on the way to Australia but from memory, there was the various leads the OP identified, but there was nothing actually linking the two accounts to each other.

    We're monitoring the seller and the 'buyer' and will take action if we come across anything concrete.

  13. #18
    Administrator Clinton is a Premium Member
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    Have you been able to check with your colleague now, Tim? Can you confirm your investigation revealed "there was nothing actually linking the two accounts to each other"?

    I notice you haven't replied to my offer. Flippa's criteria for detecting linked accounts is not disclosed publicly for "security reasons". Fair enough. However, when it's relatively easy for others to spot suspicious activity - and, in fact, spot activity so suspicious that it can't be anything but shill bidding - your answer that the activity didn't meet your (undisclosed) threshold rings somewhat hollow. If you say there was nothing to link the two accounts some might think you aren't looking hard enough.

    Such inaction doesn't support your earlier claim that Flippa is serious about dealing with shill bidding and it adds to suspicions I've raised that as you directly benefit from shill bidding - I take it this is not in dispute any more - there may be a bit of intentional blindness going on here.
    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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  15. #19
    aka "meathead1234" Thomas is a Premium Member
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    There is no way in this world would anyone pay a multiple that high for a site like that. An opt-in list of people looking to save money, isn't exactly valuable. You *might* get lucky and find one person willing to massively overpay for the site, but he had 5 different bidders all bidding over $28k for a site that I would value at around $2000. The odds of finding 5 different people willing to pay 14x more than the site is actually worth (especially on Flippa which is full of buyers expecting to pay ~1x net income) is probably 1/1000000. Trying to argue he found those buyers through press releases and YouTube videos is not a particularly strong argument.

    The seller is also a proven liar. On the day his auction got suspended, he Tweeted (as an aside, you'll notice he has around 28k fake Twitter followers) that the site had sold: https://twitter.com/ChrisParksCO/sta...79475105964032

    As soon as it was restored again (after publicly petitioning Flippa putting them in a difficult position as accusing a buyer via Twitter of shill bidding is probably a legal nightmare) he commented on the auction:
    "Less than 48 hours to go. The next bid gets it. More than a few people have expressed their interest and are preparing their BIN funds."

    Why would he be doing that if the site was already sold?

    After the auction then ended below reserve (surprise surprise) he Tweeted again: https://twitter.com/ChrisParksCO/sta...46450861764608 - so the buyer (even though it was under reserve) dropped out? And blaming Flippa? Smart.

    My off the record opinion: It's a classic shill auction process. He has done it very well (and clearly covered his tracks/knows what to say as he got unsuspended). Most people would just get one or two shill bidders going. This guy is smart so has at least 5. 5 adds to the social proof. If you're a very inexperienced buyer, 5 people adds significant confident. 1 or 2 others less so. When the auction ends unsold or the "bidder pulls out" he'll then pitch the business to these first-time buyers (who may be from Flippa or his list). He'll give them a great deal and offer them $5k off the highest "bid" (which was already way more than it was worth). They feel like they are getting a great deal, but in reality have just paid 10x more than the business is worth. The sites themselves are probably legitimate but as we already know he has a very smart and passive aggressive style (see Twitter) so will get them to leave him feedback quickly (remember, they don't realise they have overpaid as he comes across as credible).

    He seems like a clever guy. As he provides sites that seem to be decent (and is clearly a good marketer) it's tough for Flippa to ban him. They know he will cause a lot of public issues (to his 28k fake Twitter followers). Proving he is 100% shill bidding is difficult (like all good scams) even though all evidence is clearly against him.

  16. #20
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    Quote Originally Posted by Thomas View Post
    There is no way in this world would anyone pay a multiple that high for a site like that. An opt-in list of people looking to save money, isn't exactly valuable. You *might* get lucky and find one person willing to massively overpay for the site, but he had 5 different bidders all bidding over $28k for a site that I would value at around $2000. The odds of finding 5 different people willing to pay 14x more than the site is actually worth (especially on Flippa which is full of buyers expecting to pay ~1x net income) is probably 1/1000000. Trying to argue he found those buyers through press releases and YouTube videos is not a particularly strong argument.

    The seller is also a proven liar. On the day his auction got suspended, he Tweeted (as an aside, you'll notice he has around 28k fake Twitter followers) that the site had sold: https://twitter.com/ChrisParksCO/sta...79475105964032

    As soon as it was restored again (after publicly petitioning Flippa putting them in a difficult position as accusing a buyer via Twitter of shill bidding is probably a legal nightmare) he commented on the auction:
    "Less than 48 hours to go. The next bid gets it. More than a few people have expressed their interest and are preparing their BIN funds."

    Why would he be doing that if the site was already sold?

    After the auction then ended below reserve (surprise surprise) he Tweeted again: https://twitter.com/ChrisParksCO/sta...46450861764608 - so the buyer (even though it was under reserve) dropped out? And blaming Flippa? Smart.

    My off the record opinion: It's a classic shill auction process. He has done it very well (and clearly covered his tracks/knows what to say as he got unsuspended). Most people would just get one or two shill bidders going. This guy is smart so has at least 5. 5 adds to the social proof. If you're a very inexperienced buyer, 5 people adds significant confident. 1 or 2 others less so. When the auction ends unsold or the "bidder pulls out" he'll then pitch the business to these first-time buyers (who may be from Flippa or his list). He'll give them a great deal and offer them $5k off the highest "bid" (which was already way more than it was worth). They feel like they are getting a great deal, but in reality have just paid 10x more than the business is worth. The sites themselves are probably legitimate but as we already know he has a very smart and passive aggressive style (see Twitter) so will get them to leave him feedback quickly (remember, they don't realise they have overpaid as he comes across as credible).

    He seems like a clever guy. As he provides sites that seem to be decent (and is clearly a good marketer) it's tough for Flippa to ban him. They know he will cause a lot of public issues (to his 28k fake Twitter followers). Proving he is 100% shill bidding is difficult (like all good scams) even though all evidence is clearly against him.

    Thomas, let us take my due diligence and your above statement as postulate for few mins and follow flippa's criteria of detecting shill bidding and banning accounts. Digging dipper on his flippa account i found multiple previous auctions with shill bidding and flippa has clearly shown as suspected link to seller. (Proof below)
    Bidder 3has bid on 83 listings from 71 sellerssuspected link to seller


    Auction links with shill bidding from same seller: (Detected by flippa internal security system)
    1) https://flippa.com/auctions/2667120/bids
    2) https://flippa.com/auctions/2655545/bids
    3) https://flippa.com/auctions/2638931/bids
    4) https://flippa.com/auctions/2629705/bids
    5) https://flippa.com/auctions/2619010/bids
    6) https://flippa.com/auctions/134756/bids
    7) https://flippa.com/auctions/125156/bids
    8) https://flippa.com/auctions/118031/bids
    9) https://flippa.com/auctions/117791/bids

    So, the fact is simple. Flippa already has the proof from their internal detection system but don't want to take any action as they are completely after listing+success fee. This shows their marketplace integrity.
    Also, as i said more than 30% sellers use shill bidding as flippa encourage them to do so by not banning their account.

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