Or take out the success fee and there would have to be 200 low end sites listed for every 10k+ site sold.
I could see that number being correct and thus the 90% number not being far off. If would be easy enough to figure out if one wanted to take the time, I'm just going to stand by my seat of the pants guess though.
What do you predict will happen? Flippa will lose a bit of custom but increase their overall profit. Apart from that ...?Originally Posted by bryanon
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But they don't have to buy it at this point. Flippa's now priced like a broker for sites near the success fee cap or not too far above it, yet don't offer the services expected.
Plus, I don't think anyone is stupid enough to believe the claims in their blog post. If they actually wanted to make this look like anything other than a money grab that they believe will be tolerated because of their market position, they should have rolled out a couple new features to justify the price increase (or in Flippa-speak, the "Upgrade Adjustments").
Bryan (October 26th, 2011)
Nice article. I don't think its unfortunate in any way that Flippa doesn't come out favorably in your analysis. It's like they are trying to make themselves even more of a haven for turnkey sites and junk.
flipfilter (October 27th, 2011)
I'm still not confident that this change will increase their overall profit, but as I pointed out earlier in the thread I can easily be wrong as I'm simply speculating and don't have any actual figures.
Either way, one thing that will happen for sure is quite a few sellers of mid-range sites will start looking for alternatives. For me as a broker it's obviously good news, but it's also a very good timing for a serious competitor to come along. The opportunity/demand has been there for ages and there's a lot of people out there capable of pulling this off and this little kick can easily make someone decide that now's the time.
But only time will show what will or won't happen so let's sit back and enjoy the show.
Guys, you underestimate Flippa.
They know what impact it will have, they're not jumping in blind. They also know that no broker has their reach.
The brokers who sell by listing in Flippa don't have an option - they'll have to continue listing in Flippa. Neither they nor the well established big name brokers have any considerable buyer database to rival Flippa's exposure. Even websiteproperties etc., who have a big mailing list don't come anywhere close for the sub $500K sites.
What's more, you can't use Flippa to find new buyers to add to your list!
Flippa keeping bidders' names secret isn't by accident - part of the intent was to ensure brokers can't go adding to their list of prospective buyers(trust me, that happened in the old days. I've been identified as a buyer and approached by more than one broker working on building their list). Now the only way you can do it is by tracking sites that have sold and relying on what's publicly disclosed in their WHOIS.
I challenge brokers like you and Thomas to give Flippa the two fingers and boycott them. You can't? Form a cooperative (like rightmove) and push listings from one broker across every broker's database. If you collectively have the clout and the buyer-base ...now is an opportune moment to display it.
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This is where you're wrong, Clinton.
While this indeed applies to the people who like to call themselves brokers but in reality all they do is list sites on Flippa (let's call this service copywriting with a few additional benefits, rather than brokerage), no reputable broker depends on Flippa (or any other single, 3rd party source) for their buyer traffic. Contrary to what many believe, there's plenty of buyers around for quality sites - and as nicely illustrated by Justin in his last blog post, most of those buyers are willing to pay a much higher price than the average Flippa buyer.
Brokers (including us) use Flippa from time to time because it is - or at least used to be - a convenient and inexpensive way of getting some additional exposure. Now that the inexpensive bit has been taken out of the equation, I can assure you that all serious brokers will look elsewhere (and again, there's plenty of channels) for this exposure.
While I'm not going to give them two fingers or start boycotting them, I can assure you that until they come up with a very attractive offer targeted towards brokers, I will most definitely not list a single site in the sub-$100k range there. As for your suggestion to form a cooperative, this is already happening and has been happening for a long time. Brokers know each other and co-brokerage is happening day in and day out. It's obviously not publicly spoken about for various reasons, but I can assure you that at least 20% of all deals are co-brokered between two or more brokers.
Flippa does not allow Flippa listings to appear consecutively in other public lists. If you were listing in Flippa you were a) agreeing not to list elsewhere and b) agreeing to pay Flippa's already extortionate success fees irrespective of where and how you sold the site. For sites listed in Flippa it would seem that Flippa is the primary listing rather than additional exposure.Brokers (including us) use Flippa from time to time because it is - or at least used to be - a convenient and inexpensive way of getting some additional exposure.
Listen, if I'm wrong about brokers' collective reach being far less than Flippa's ... there'll be nobody more delighted than I. It would suggest that the Flippa near-monopoly exists only within the auction format. But it doesn't seem that way at present and I'm fully prepared to change my mind if I see any indication that I could possibly be wrong on this. Bear in mind I'm not talking the really big deals (which is exclusively broker territory; top notch businesses don't subject themselves to idiot comments in public listings).
However, I'm subscribed to numerous broker lists (using various email addresses) and I can assure you I see little to no evidence of cross pollination of listings.
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I don't think anyone would argue that Flippa doesn't have the biggest reach (in terms of absolute numbers of buyers), but you'll probably find that the average buyer on a broker list has more cash to spend than the average Flippa user and has most likely signed a proper NDA. I've found that almost all of my "serious" clients are also signed up to Flippa but have no intention of getting into bidding wars or doing due diligence on people who are basically anonymous due to Flippa's restrictive system.
Over the last year, there are a few brokers I can think of who have sold more (in terms of $ value) in sites between them than were sold on Flippa. Obviously the volume is lower, but most of these sales would be 6 and 7 figures (I'm not sure what you were describing as "really big"). As deals get bigger, it's far more likely that there will be more than one broker involved as two lists are better than one. The co-broker deals are most likely to be a small broker (or one man band) working with a larger broker: small guy brings in the lead, big guy effectively sells it.
IMO the main price range that Flippa have knocked out (small broker wise) is <6 figures. Flippa don't have too many 6 figure deals over the course of a year, whereas the majority of brokers will almost exclusively deal with sites of this value or higher.
It's not that black and white I'm afraid. First of all, not nearly all listings (in our case - not even 10%) ever end up on Flippa. We (and most likely other brokers alike) only list certain listings over there. I'll leave the criteria we use to determine whether a listing ends up on Flippa or not for myself. Secondly, most if not all brokers who list sites on Flippa always push those sites to their own list first, and only go to Flippa if their own list doesn't bite right away. Thirdly, while Flippa don't allow a site that's listed there to be sold outside their platform (during the listing duration anyway), they quite obviously have nothing against the seller/broker PROMOTING the site elsewhere, given that the actual sale happens through their platform i.e. the buyer is eventually sent to Flippa to bid/BIN. All they care about is their success fee and as long as they get it, they're happy.
I can't speak for other brokers obviously but I know two things for a fact:
a) approximately 1 in every 5 listing we have is is co-brokered;
b) we get other brokers approaching us all the time looking for co-brokerage / partnership opportunities.
Co-brokerage can be tricky though and the contracts are often extremely restrictive (privacy wise) so one of the reasons why you're not seeing a whole lot of cross-sales in the emails that brokers send you can be that those sites are pushed only to a smaller group of serial buyers.
The fact of the matter is that co-brokerage is happening and gaining more and more popularity every single day (judging by the number of partnership requests we receive weekly). That said - to my knowledge most reputable brokers that operate today can show at least a 90% success rate so obviously there are enough buyers around and not listing the sites on Flippa isn't going to affect this success rate. As I already said earlier, the only brokers that WILL be affected are the ones that merely list their brokered sites on Flippa and add little to no extra value - and this (that sort of competition getting hurt) makes me only happy.
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