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Thread: Non selling sellers

  1. #1
    Administrator Clinton is a Premium Member
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    Non selling sellers

    We have a thread in the selling forum about non-paying buyers in Flippa.

    But the problem works in the other direction as well. So far this month I've spent the better part of one whole working day analysing stats and doing due diligence on sites that were later pulled out of auction.

    What's your take on sellers who aren't serious about selling, are using Flippa just as a market valuation exercise or haven't thought the whole thing through and decide they didn't want to sell after all?

    This is more of a problem, I've noticed, with higher priced sites than the turnkeys.

    Is this a problem you've encountered? Do you just write off the time you've wasted? Is there a way of judging the likelihood of the seller not being committed to the process?
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  2. #2
    Top Contributor grynge is a Premium Member
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    About the only indicator I could imagine is the reserve price and maybe to a lesser extent the BIN price. I used flippa to gauge interest, and I had a high reserve price. I am not sure there is really anyway of telling someones true intention. A bit like that singlerose site, she wants to sell it but not at a reasonable price she wants what she thinks it is worth not what the market is saying it is worth. I think you may have to just write the time off, take a note of who is selling it and make sure you don't waste time the second time round. Once you saw lantona's wanted more than reasonable figures did you waste time on any of their other sites for dd?
    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

  3. #3
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    Even as someone who doesn't buy sites I was thinking about this exact issue yesterday, wondering how often you guys do DD on sites that get pulled or that you just don't win the auction for.

    Is it just part of the job and it all balances out in the end? What's a normal strike rate?

  4. #4
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    One thought I've had on this is that I believe there are two kinds of websites on Flippa. The vast majority are sold on the basis of their revenue-generation. That is also how most buyers are looking at sites. A fair price for these types of websites is some multiple, say 6 - 15, times the monthly revenue. So if the BIN seems outrageous, then either the seller is not serious or perhaps they're trying to sell a site with that dreaded word, potential.

    The latter kind of site will only make sense to someone who wants to work on it and mine that potential. There are very few such prospects and perhaps they're not even visiting flippa during the listing of that auction. If a seller of such a site finds they're not getting much interest, then they may well cut the process short. However the problem is that most buyers wait to the last hours of an auction in order not to raise prices by showing their interest. Neither side here has been at fault, but that jewel you hoped to get for a song may just vanish through lack of interest.

  5. #5
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    I try to get a reserve or BIN price out of any potential seller as soon as possible to see if we're in the same ballpark. If they aren't willing to offer up any information, I might throw out a broad price range and ask if they think that's reasonable. If they are really reluctant to even discuss price or don't seem realistic, I won't invest much time.

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    I also try to get the reserve out of the seller to see if he is being reasonable. If the reserve is at 50x monthly revenue and yes, is based on the dreaded "potential", I won't even bother with DD.

    The other gauge I've found is if the seller is too emotionally attached to the site or has regret that a site has fallen on hard times. I've had sellers who had sites that made tons of money 3 or 4 years ago or a domain name they bought that they thought the world would beat a path to, only to find no such luck. When the seller seems to regret having to sell or wistfully discusses how the site's greatest days will be repeated, I tend to assume they're subconsciously not ready to sell and will use the perceived lack of buyers who feel the same way the seller does as an excuse not to sell.

    Over on Flippa, one guy had just such a site and has already wasted two premium listings without selling. I tried to explain, in great detail, why the site was not worth even a third of his reserve but to no avail. In fairness, after swearing he would never lower his reserve, the second auction had a *much* lower (but still too high) reserve. I suspect we'll see a third pretty soon.

    TL;DR Ask for a reserve and avoid sellers that are too emotionally attached to their sites.

  7. The Following 2 Users Say Thank You to FinanceGuy For This Useful Post:

    bwelford (8 March 2012), Clinton (8 March 2012)

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    Most sellers will give you an answer if you ask "Is the reserve higher than X times last months earnings?" pick an appropriate number near or above your walk away price. It they say it's above that, you saved yourself a day's work.

  9. The Following 2 Users Say Thank You to jimmifli For This Useful Post:

    bwelford (9 March 2012), Clinton (9 March 2012)

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