FP - Flippa - Negotiating terms with sellers

[BrettM]

Hi!

Ramping up some site buying after a lull with the summer, etc., and one question I have is negotiating with sellers.

If I remember there used to be a link (near the PM / comment area in Flippa?) suggesting that offers, etc. are not allowed in PMs, etc., which I understand.

However, is it OK to negotiate terms via Flippa PM, or will this equally compromise your site?

Reason I ask is I see some sites that offer to buy the site outright (100% ownership) or purchase part of the site (e.g., 50%) and continue working the site with the owner in partnership.

I would want a record of this in Flippa's PMs, in case the deal goes sour, but only if this is allowed by Flippa.

Any advice / experience in negotiating terms with the seller (e.g., 50% ownership) in a way that's OK in Flippa's eyes?

Thanks!

(P.S. Travelling in a few days, so thanks in advance for answers that I don't get to quickly enough due to travels.)

[Thomas]

Technically, you probably can't negotiate co-ownership. Flippa want their success fees

However, if you want to do something like this, you should probably get the owner's phone number or Skype and chat to them there. PMs can get annoying and take ages to negotiate a deal.

It's always safer to deal with a seller via phone - legit sellers should always be happy to do this.

[BrettM]

Yeah -- phone wins over PMs Thomas! Although I'd probably summarize the agreement in PM and have them agree, just to have a record on Flippa's system.

And I did ask Flippa support this, and here's the response I received, re: purchasing a part ownership (answer: not allowed):

Under our Terms & Conditions, all websites or domain names sold within Flippa must be sold in their entirety, and not on any form of lease or partnership basis. Flippa staff do not moderate every listing placed on the marketplace, so it's possible that listings may be placed offering partnerships in the websites being offered for sale. These listings should be immediately reported, for us to take further action.

(Emphasis mine.)

That's cool. I've asked them to clarify on the negotiating aspect though. E.g., if I ask for something added to, or removed from, the auction if I were to win.

Obviously, if I were to walk down to a local business and discuss buying it, everything's negotiable -- I just don't know Flippa's rules (although I have read their Rules page), and want to keep in good standing as I'm about to ramp up some buying when I return from travel.

[BrettM]

Update...

Below is Flippa's response, re: negotiations. Basically how I read this, and the above quote, is they want to protect their success fee, which is completely understandable. They have created a marketplace that's easy to find, and promote, website sales, so why wouldn't they want to ensure they make enough to run the business.

Negotiations with the seller via Public Message / Sales Discussion thread regarding the listing contents would be acceptable.

Private Offers relate to discussion with the seller to close a currently active Flippa listing, in order to transact privately with the seller, which circumvents payment of Flippa Success Fees. Any user found involved in making or accepting Private Offers will be either suspended or banned.

So, for me, fair enough. Negotiations are fine, and don't circumvent Flippa.

Hope that helps others as well.

[Thomas]

Update...

Below is Flippa's response, re: negotiations. Basically how I read this, and the above quote, is they want to protect their success fee, which is completely understandable. They have created a marketplace that's easy to find, and promote, website sales, so why wouldn't they want to ensure they make enough to run the business.



So, for me, fair enough. Negotiations are fine, and don't circumvent Flippa.

Hope that helps others as well.

You could always offer to pay their success fee waiver that they offer before listing a site. I always pay this so I'm not liable for a success fee if I end up selling privately/outside Flippa (quite common with larger sites).

I would personally avoid JV'ing on sites without getting to know the seller well first. Can get to the stage where you are doing 100% of the work for 50% of the return.

[BrettM]

When you mention success fee waiver, you mean Flippa's? Didn't know they had one, but I've only bought and never sold.

Re: JV'ing, yes. I tend to 'interview' the person quite a bit if I'm in that situation.

Thanks Thomas.

[Thomas]

When you mention success fee waiver, you mean Flippa's? Didn't know they had one, but I've only bought and never sold.

Re: JV'ing, yes. I tend to 'interview' the person quite a bit if I'm in that situation.

Thanks Thomas.

It's something like $200 non-refundable for a seller to pay before they list in order to waive the success fee. Most owners of decent sites will pay it beforehand as it saves ~$300.

[BrettM]

Cool - thanks, and good to know!