Selling a website, marketplaces demanding exclusivity

[Clinton]

Flippa for one demands that if you're selling in Flippa you can't list elsewhere.

How do they know if you do list elsewhere?

I find today that sites like tvfilmrights.com, PPMLogix and others (I won't do Flippa's homework for them) are listed at both Flippa and websitebrokers.com. I find duplicates of Flippa listings elsewhere, with other brokers and with classified listing sites such as bizquest.

Is exclusivity just a scare tactic or does Flippa do any checking? If they don't then really you should be listing in multiple locations to maximise your chances of success and minimising your liability for success fees (or would you still have to pay Flippa success fees if you sell your site at a broker?)

[Bryan]

Is exclusivity just a scare tactic or does Flippa do any checking? If they don't then really you should be listing in multiple locations to maximise your chances of success and minimising your liability for success fees (or would you still have to pay Flippa success fees if you sell your site at a broker?)

I highly doubt Flippa are doing any checking, but I also don't believe the exclusivity clause is a "scare tactic".
I'm confident that the main reason behind demanding exclusivity is not pocketing more success fees, but discouraging people from advertising their properties elsewhere and therefore not selling the property to the winning bidder if there is one. And this makes perfect sense in an auction environment.
As for checking - I don't think this is necessary because they've already made quite clear that you're not allowed to list your property for sale elsewhere during the auction, and that if you fail to sell to the winning bidder then they suspend your account - which is all it takes to keep away most double-listings.

[Clinton]

So the maximum penalty is suspension of your account? Surely that matters only to serial sellers and not the one off sellers, the type who sell the higher end/better quality sites?

To the seller of the better property it seems to make sense to stick two fingers up at Flippa and list in multiple locations to maximise chances of success. The Flippa listing itself would be a "Private Sale" instead of an auction as it's just a means of identifying prospective buyers and getting their email addresses. You then negotiate with all buyers by email - the ones from Flippa and the ones who've approached you elsewhere.

That way you get the most advantage without being tied down by that silly rule designed to protect Flippa's interest at the expense of you getting a lower price (fewer bidders) for your site.

[Bryan]

So the maximum penalty is suspension of your account?

What else would you propose as a penalty? Flippa could introduce a fine for breaking the contract but we all know that things like this are un-enforceable.

To the seller of the better property it seems to make sense to stick two fingers up at Flippa and list in multiple locations to maximise chances of success. The Flippa listing itself would be a "Private Sale" instead of an auction as it's just a means of identifying prospective buyers and getting their email addresses. You then negotiate with all buyers by email - the ones from Flippa and the ones who've approached you elsewhere.

.. and I highly doubt Flippa would have any issues with you advertising your site elsewhere if it's a private sale rather than an auction! As I mentioned before, I'm pretty sure (only Flippa can confirm if I'm right or wrong) that this policy is place mainly to protect bidders by reducing the likelihood of sellers not following through in case of an above reserve winning bid - but in case of a private sale this isn't an issue.

Obviously, negotiating the sale with leads that come from Flippa via email and closing the deal with them out of Flippa is a whole different story as this would leave them out of their success fee that they've deserved. I don't know whether they are doing anything to stop something like this from happening or not though.

[KenW3]

It is standard for Real Estate and B&M brokers to have some period of exclusivity. It is obvious this should also exist online, as this is typical for brokers offering properties for sale. Each agreement should have specified length. If results are not forthcoming within this time period, then the listing agent or broker should lose their exclusive.

For brokers and sales agents, sellers providing multiple means of contact for a property offered for sale provides the ability for a seller to circumvent a listing service or broker. This is unfair to the service, as they have costs for marketing and will have made efforts on behalf of a seller.

If any seller is unwilling to abide by a broker's agreement or a service's TOS, then they certainly are not obligated to list their property for sale with that specific company. If the service does, however, have a TOS that a seller chooses to violate, wouldn't you think the seller should be avoided? Violation of a listing service's terms would seem to indicate the (seller's) potential ability to be duplicitous in their business deals, and demonstrates a definite inability (by the seller) to abide by business agreements.

[Clinton]

Violation of a listing service's terms would seem to indicate the (seller's) potential ability to be duplicitous in their business deals, and demonstrates a definite inability (by the seller) to abide by business agreements.

What about a seller's exaggeration of the profits, underplaying the risks, talking up the potential that he knows isn't really achievable without disproportionate time investment (he knows because he tried), not disclosing just how much time it takes to run the site, forgetting to mention the few hundred dollars he spent on article writers and link buying ....

I don't encourage sellers to violate any TOS but I wouldn't see a seller's multiple listings and violation of a marketplace TOS as any less honourable than the above examples which happen routinely.