Flippa Valuation Tool

[Clinton]

Flippa announces a website valuation tool. Try it out. What do you think?

If you try to value your site they give you a basic valuation and then offer a more advanced one by email if you give them revenue and traffic figures. If you provide all that you get taken to a page encouraging you to list at Flippa. That bit is quite clever

[Thomas]

For a tool that's "90%" accurate I didn't find it to be very accurate at all

I just entered a few. One was a site sold for $150k and according to the tool it's worth $0-$1200. One is a site worth around $300k and it valued it at $1800-$38,000.

On a more cynical note, I'd imagine if it gave a default range of $0-200 for every site entered, then that probably would be 90% accurate for sites that are listed on Flippa

[monty]

Absolutely useless like any of these tools.

I plugged in a few sites that sold for 8 to 9 figures and the maximum it suggested was no higher than $50,000 . I'd be extremely happy to be in a negotiation for a site where the seller was relying on Flippas basic valuation

[Kay]

I had a play with it and found it to be as much use as a chocolate ashtray. For one of the sites I put in, the tool returned a 'valuation' figure less than the site makes every month. Bah!

It also told me that my expat site is worth $250 - 7,200. ROFL! And showed me examples of similar sites (which weren't similar at all) and the cheapest one of them was $23,000.

And one of my sites, which makes a decent income, was valued at $160 - 2,600. Crikey. If that's all it's worth, I'll be posting in the BSTE begging for a job. On the other hand, if things really have got that bad, I'll make a post to say, "Will work for food!".

I also tried the additional thing where you enter the traffic and income figures, and that was a little bit better, but how can they 'value' anything without knowing how much time it takes to run the website, or even anything about the assets and liabilities that go with it?

Waste of time.

[grynge]

It takes most of it's valuations on PageRank the higher the PR the higher the value of the site lol.

My site with 120k traffic but pr2 is worth $1,200
My sites with 1k traffic but pr6 is worth $38,000

I tried other high pr sites and it gave similar values

[Clinton]

I also tried the additional thing where you enter the traffic and income figures, and that was a little bit better, but how can they 'value' anything without knowing how much time it takes to run the website, or even anything about the assets and liabilities that go with it?

That's the problem with all valuation tools.

Net profit is the number one decider of value and is the one input those valuation tools don't have. So they base their calculations on whatever turnover the seller claims or, in Flippa's case, based on PR/Alexa/something else. Even flipfilter tries to argue that there is possibly a correlation between claimed gross profit and the final sale price.

I am not convinced. And now I have the stats to back me up.

What I am convinced about is that a marketplace which develops a valuation tool that becomes popular is a marketplace in a strong position to later start inflating valuations in an attempt to persuade more webmasters to try their luck and cough up the listing fee.

[dsieg58]

What I am convinced about is that a marketplace which develops a valuation tool that becomes popular is a marketplace in a strong position to later start inflating valuations in an attempt to persuade more webmasters to try their luck and cough up the listing fee.

Good point. (Excellent point, actually) I would say you just peeked behind the curtain and discovered the true motivation. Not to mention, as some posters here have already discovered you can game it and the seller can use it as a tool to justify an already inflated price.

[loanuniverse]

Once I gave them the revenue and pageviews number, the amount that the tool gave me was approximately 15 times income. The number would be reasonable for someone that needs money now.

However, I did see something that picked my interest, and I think there is room for a deal:

"Basic Valuation for experienced-people.net $7 – $18"I am willing to double that price.

[daveslutzkin]

I also tried the additional thing where you enter the traffic and income figures, and that was a little bit better, but how can they 'value' anything without knowing how much time it takes to run the website, or even anything about the assets and liabilities that go with it?

Kay, that's an excellent point. Obviously it's hard to value a business without full information about it, but from the "useful tool" point of view, there's a barrier to entry question - asking for reams of financial information up front is a recipe for having a tool which no-one can ever be bothered to use. As Andrew said in our blog post, the tool is a beta and we'll be experimenting with it over the next few months to see if we can improve the quality of the results, and one option is obviously to ask for more information.

[daveslutzkin]

What I am convinced about is that a marketplace which develops a valuation tool that becomes popular is a marketplace in a strong position to later start inflating valuations in an attempt to persuade more webmasters to try their luck and cough up the listing fee.

Well, maybe, if the listing fee is all that Flippa cares about. However, our fee structure includes a success fee, and the best way for us to miss out on a success fee is to give a site a ridiculous valuation which then anchors the seller's expectations to an unrealistic level. External valuation tools already do this, unfortunately, so it's actually in our interest to make this tool as accurate and popular as possible so as to facilitate more sales.