Flippa Announces Plans For Integrating An Escrow Service

[benitez17]

I don't know how they could force anyone to use escrow.com. If both parties are happy to go elsewhere they'll simply tell Flippa it didn't work out and they're cancelling the transaction. If Flippa needs a reason for cancellation, there's always some flaw you can find in the website that wasn't disclosed in the listing.

The only way Flippa could force escrow is by requiring prepayment of the full listing price at time of bidding. Would work for BIN offers. What about the rest?

Well, they can make it the only way to complete an auction through their site. They can't force anyone to do anything unless they are willing to hire a staff of lawyers in a number of countries.

The reasons you stated are all valid, and are similar to the reasons I have argued that they can't fairly collect a success fee at all, but this would be an improvement over the current situation.

[3Six]

Dave/Luke, any comment on whether it's going to be a flat fee per listing?

[LukeMoulton]

@3Six, the fees will be a sliding scale based on sale price. We won't be charging anything on top of escrow.com's fees.

[3Six]

Thanks for your reply, Luke. So you'll be charging escrow fees for the value of the whole site but providing escrow protection only on the domain? That's great for the low value sites as there isn't much value outside of the domain name. Doesn't seem like a good deal for the better sites that you want to attract to the market.

[daveslutzkin]

Thanks for your reply, Luke. So you'll be charging escrow fees for the value of the whole site but providing escrow protection only on the domain? That's great for the low value sites as there isn't much value outside of the domain name. Doesn't seem like a good deal for the better sites that you want to attract to the market.

That's about it, yes. We're starting with what we can do. I'd love to have perfect whole site-escrow, but I haven't seen anyone actually doing it. We're not going to hold out for the moon shot - let's go part of the way first.

[Clinton]

That is disappointing, Dave. One way is to provide everything you're charging for, yes, but there is the other option of not charging for what you're not providing.

I do, however, see the difficulty in indentifying which part of the sale price is for just the domain.

I feel you missed a trick here. The deal with escrow should have been for a fixed fee per transaction. Their pricing is exploitative and relies on site sellers/buyers just trusting the brand and not realising that they have very little protection through escrow.com services.

I'd love to have perfect whole site-escrow, but I haven't seen anyone actually doing it.

I've done a lot of research on this. Drop me a PM if you wish to discuss alternate services and what they offer.

[3Six]

Any updates on this?

[Clinton]

Dave and I spoken by email. He's looking at ways of providing a full website escrow but I don't know how far he will succeed.

[daveslutzkin]

Dave and I spoken by email. He's looking at ways of providing a full website escrow but I don't know how far he will succeed.

To summarise, we're certainly looking at it and will continue doing so, as it's definitely our desired destination. But we don't have resources to create a service from scratch, so we need an external provider with whom we can integrate, and who can handle the potential volume of transactions with minimum fuss. Unless there's a perfect option out there that I've overlooked, this provider doesn't exist. So it's unlikely to happen soon.

I'm very happy to consider any services suggested, though.

[3Six]

Dave, you have said elsewhere that you want to attract better sites to the marketplace. The better sites have the most to lose from a charging structure where they pay an escrow fee that's a percentage of the sale price. The higher the value of the rest of the site relative to the domain name the more these sellers are going to be losing.

What have you got in place to ensure that your escrow pricing structure doesn't end up screwing the seller of the quality site (and charging him for services not being rendered)?