Flippa.com: Get The Inside Scoop On What’s Going On At Flippa

Flippa.com, operated out of Melbourne, Australia, was formerly known as the SitePoint Marketplace prior to its spin off as a separate entity from SitePoint.com back in the summer of 2009. The transition from the SitePoint Marketplace to Flippa was a little bumpy as many experienced website flippers weren’t happy with the change. I suppose this is to be expected as most people don’t like change at all – let alone dramatic changes like this one.

Since the spin off, things have settled down and it seems the majority of website flippers are generally satisfied with Flippa and the direction they’re heading. Evidence of this can be seen in the number of listings on the marketplace every week. There are hundreds of websites listed for sale every week and the number of listings continue to grow. I had the fortunate opportunity to interview Luke Moulton, Marketing Manager for Flippa, via email this week. In this interview you’ll learn more about this marketplace and where it’s headed.

FW: Luke, tell me a little bit about yourself and your role as Marketing Manager for Flippa.

First, Travis, thanks for taking interest in Flippa, we’ve certainly taken note of the great content you’re creating around website flipping. I started my online marketing career 10 years ago when I setup a web development agency with a couple of other business partners. After selling the business in 2007 I worked for an Australian antivirus software distributor before starting with Flippa in November 2009. So you could say I’m still fairly new to the position.

As the Marketing Manager at Flippa my role is predominantly focused around online marketing activities such as PPC, SEO, email marketing, conversion optimisation and product development. I spend a lot of time communicating with our customers and getting to know the wide variety of users in our marketplace.

FW: I’ve always been curious as to how big Flippa is. How many people are behind it?

Many people are surprised to find that Flippa is run by a small team – currently less than 10 people.

FW: How many websites are listed for sale every week on Flippa.com (on average)? What percentage of these sites are startups vs established sites?

How do you define startup vs established? One man’s startup is another man’s poison, as the saying goes. At the moment we’re seeing about six or seven hundred listings a week, but it’s increasing pretty quickly!

FW: What percentage of the buyers and sellers on Flippa are new to buying and selling websites vs. “regular” or “experienced” buyers and sellers?

Once again, this is really hard to define. We constantly strive to cater for all sectors of the market, from new entrants who don’t yet understand what WordPress is, to experienced participants who can ask pointed questions about the technicalities of AdSense. It’s important for us to remember that this is a really young market which is growing quickly, but that it can be very intimidating and with a steep learning curve. For everyone’s benefit, education is the key.

FW: I’ve noticed the percentage of listings sold (i.e. the sales success rate) on Flippa has been steadily increasing. Just a few months ago I think it was around 43%. Today it’s up to 56%, which is pretty good in my opinion. What do you attribute this to?

We concentrate on attracting quality sites and serious buyers to the marketplace – any increase in success rates is simply a side effect of that.

FW: A challenge with any marketplace is to maintain quality control on all levels – from the buyers and sellers in the marketplace to the actual websites being bought and sold. From reading some of your posts on various forums, one way Flippa is addressing this is through its pricing structure. You’re not letting people list websites for free or for a cheap $5 flat fee or something like that like you see with many other marketplaces. Aside from using pricing as a way to maintain quality, what other things is Flippa doing?

The main thing we’re trying to do is educate buyers around quality. If we can teach the marketplace to differentiate good quality offerings from the not so good ones then the marketplace will push out poorer quality offerings. We will also continue to implement flags that warn buyers about certain aspects of an auction, as we have recently with the addition of the “WARNING: Inconsistent established data” and domain age warnings.

FW: Speaking of Flippa’s pricing, that is one complaint some have expressed – that Flippa’s fees, specifically the 5% success fee, is a little high especially for those who sell startup sites in that sub $500 price point. I have two questions regarding this: (1) What do you say to these complaints? (2) Would Flippa ever consider a sliding success fee similar to eBay’s “success fees” where the percentage is less for lower priced websites. For example, a website that sells for only $200 pays a 2.5% success fee instead of a 5% fee.

Fees in our marketplace provide a bit of a lever to balance the quality and the quantity of the sites listed. We think we’ve got the level about right, but it’s something we’re constantly monitoring. As for a sliding success fee, I wouldn’t completely rule it out. But a percentage fee like the one we have at the moment is sliding by its very nature – a $200 sale attracts a smaller fee than a $2000 sale – so I feel that we already cater for this.

FW: Domains are also bought and sold on Flippa but that doesn’t seem to be the primary focus of the marketplace. Does Flippa have any plans to beef that market up any or will the primary focus always be on website sales?

Although our focus has predominantly been on websites, domain sellers realize that buyers on Flippa are also interested in domains, particularly ones with age, backlinks and PR. The domain segment will continue to grow and we will of course be nurturing that growth.

FW: Flippa currently doesn’t allow adult sites for sale. Do you see that changing anytime in the near future?

We don’t have any immediate plans to allow adult sites on Flippa. It’s important that Flippa is a credible and comfortable place for legitimate businesspeople to do business. We think we’re gradually gaining the trust of the marketplace and we’ll think very carefully about any decision which could potentially jeopardise that.

FW: I understand Flippa is about to announce that the escrow services from Escrow.com will be integrated into Flippa. When will that go live and can you talk about that relationship? Will Flippa users get discounted rates or will it be the Escrow.com prices – just integrated in the Flippa interface?

Escrow.com integration is very close and will be launched as soon as we’re happy with it. We think providing an integrated escrow service is an important next step as Flippa looks to become a more and more credible place to do business, so we’re very focused on it. We haven’t yet nailed down pricing completely, but rest assured it’ll all be explained at launch.

FW: In addition to integrating other relevant services such as escrow, has Flippa given any thought or consideration to offering brokerage services – or even partnering with a website brokerage service to cater to high-end buyers and sellers (six figures plus buyers and sellers)?

We have definitely given this some thought, however, it’s not on the radar at the moment. With a small development team we already have our hands full with other higher priority projects.

FW: What are the biggest challenges for Flippa this year?

As you can see from most of my answers, we have plenty to do to continue to improve the marketplace. One of our biggest challenges is to educate those who are totally unaware that a marketplace exists where websites are bought and sold; that there is an alternative to bricks and mortar investing. Virtual real estate is still a very young market so it’s exciting to have the opportunity to introduce people to an alternative to other markets.

I want to thank Luke for taking the time to answer my questions! It sounds like him and the rest of the crew at Flippa have a busy year ahead of them to maintain the marketplace’s growth and quality. I wish them success and I look forward to the continued improvements at Flippa.com.

Tagged as: Website Flipping Interviews