Tag Archives: Website Flipping Interviews

I had the privilege to interview a website flipper I’ve been following for a while now over at the Warrior Forum. His name is Jay Piecha, or as his fans know him, “SuiteJ.” This Canadian cat is one cool dude who knows his stuff.

After doing business with him in the past and exchanging numerous emails with him, I can see why he’s so successful. He’s a real professional and a genuine nice guy. Interestingly enough, he got his start flipping websites when he sold a network of adult affiliate websites.

WARNING: This is a long interview split into two parts. There is tons of great stuff here. Since Jay is a coffee nut, pour yourself a cup, sit back and enjoy…

FW: Thanks Jay for taking the time to do this interview. Let’s start off on a lighter note. Let’s talk about your coffee addiction. What’s your favorite cup of coffee and how many cups do you drink a day?

My pleasure (*pours coffee*).

I’ll pretty much drink any cup of coffee that has enough caffeine in it to get my heart racing in seconds. However, most the time I’m drinking Tim Horton’s or Starbucks just because they both have convenient drive-through windows minutes from where I live and it gives me a reason to leave my office.

I only drink a few cups a day now, but it used to be out of control until the doctor recently ordered me to stop. I have two in the morning, one in the afternoon, and if I’m on a productivity roll at midnight, I’ll grab another one to keep me going for a few extra hours.

I like drinking strong, flavored coffees at home like Vanilla Hazelnut, Irish Cream, and…wait…you weren’t expecting me to answer this in depth about coffee, were you? Sorry…let’s move on.

FW: LOL. Just like your business, you are thorough;) I’m not a coffee addict like you (in fact, I don’t like coffee at all) but I do enjoy a couple cups of green tea every day and a cocktail or two at night (Skyy vodka and 7up). What do you think about us wimpy tea drinkers and what’s your favorite adult beverage?

If you don’t like coffee, we can no longer be friends, but I will still commit to finishing the interview if you agree to drink a coffee right now. (*pours more coffee*)

Tea is not wimpy. Green tea is good for you, and I’m trying to be healthier these days, so I commend you! I used to sing in rock bands for years when I was younger and I always drank lemon tea to soothe my throat (I had to scream to hit the high notes and still missed them often lol)

I’m not in a position to say what type of drink is wimpy. I shamefully love apple martinis.

FW: Apple martinis? Wimp;) Only kidding. O.K., now that we have the important stuff out of the way, let’s get down to business. I understand your first big flip was selling a network of adult affiliate websites. Tell me about that.

Well, I signed an agreement to not disclose the details, but I can give you a rundown of what I was doing and how it happened.

It wasn’t really what I would call an “intentional flip”. What I mean is, I hadn’t created it with plans on selling it in the future. It was my full time business for over 3 years and up until a few weeks before the actual sale, I hadn’t ever really considered selling it. The network was comprised of less than a dozen sites with just a few of them making the bulk of the income.

I started that business without really thinking about it; I sort of naturally fell into it. When I was working as a freelance designer, I had designed a site for a good friend who happens to be in the adult business. I had no real intention of being in the adult business, but his site design got the attention of a couple other companies in the industry who needed websites designed on a regular basis. Since they seemed willing to pay a lot more than your average mom and pop shop who wanted to “get a web presence”, I started churning out adult designs.

Although most of the designs I did were membership sites, one of my main clients was hiring me regularly to create adult affiliate sites which basically made income by promoting membership sites for a commission. After I created several of them, I obviously had a basic grip on what he was doing, and I started to ask myself why I was creating these sites for a one time fee when I could create my own and make recurring money. So, I started creating my own adult affiliate sites.

Now typically, being new to the game would be a rough start, but I had already built a few relationships with other people in the adult industry (from doing design work) and so once I had my own sites, I began to barter design work in exchange for targeted traffic from them (instead of money). That worked out well, and I was making regular sales within the 3rd week.

It only took about 4-5 months before I was making a healthy full time income from just a couple sites. The retention was amazing on the sites I was promoting, so the income started to compound quickly. The money was good, but I just kept it at a level I was comfortable with. What I mean is, I never really wanted to be in the adult industry 100% and so I didn’t put forth the effort to grow the business to it’s full potential. Instead, I just maintained it, and worked on other things on the side that I enjoyed more like selling on eBay, graphic design, and a few other projects. I always had kind of a love/hate relationship with the adult sites.

I started my first affiliate site in 2003 and at the end of 2007, I sold the network. I didn’t have to list it publicly because I had connections who put the word out and I found a couple interested buyers fairly quickly. I did the deal through a bank wire transfer and even though I trusted the buyer, it was a pretty stressful ordeal. Although I had sold domains and websites several times before that deal, it was never anything of that magnitude. It went well though. I was lucky to have a really great buyer.

You’re probably wondering why I sold it, right? Well, my life changed in 2007 when I was blessed with the birth of my daughter, the most beautiful baby girl in the world. That day changed my perspective on a lot of things, and since I already knew that I didn’t want to be in the adult industry for life, this steamrolled the decision of selling and cashing out.

FW: Congrats on the birth of your daughter. I have a little girl of my own so I completely understand where you’re coming from. The adult website business is interesting to me. Even though it may get a bad rap, what people don’t realize is that a lot of what we Internet Marketers do today started with the adult website industry. The adult industry has always been ahead of the curve. Things like videos and video marketing, membership sites, free membership trials, banner ads, etc. – all things that are buzz words in main stream Internet Marketing today – started with the adult industry. Do you agree?

Yes, I agree. In fact, I would say “ahead of the curve” is an understatement. When I left adult and started looking into mainstream affiliate programs, I was shocked to find how limited the tools were and how unprofessional they were. Top adult affiliate programs have tools that from 2 years ago that still outshine much of what I see in mainstream programs. I can’t imagine what they’re like now (I don’t keep up on it anymore, but I should just to stay on the edge).

There’s actually a few good lessons in my “education” that crossed over to mainstream but not as many as you would think. There’s quite a few differences, but starting a conversation about that comparison could be a long interview in itself.

FW: O.K., let’s move on from the adult industry. You are one of the more active website flippers on the Warrior Forum. I see your all-in-one blog packages for sale all the time. I was surprised to learn that you sold over 150 custom blog packages over a 6-8 month period.

Yeah, it’s actually more than that. I believe I’ve cracked 200 in that time frame if you count all my public and private sales combined.

FW: Wow, congrats! Are these custom blogs custom ordered? Tell me about them.

The “custom sites” were still flips and not “custom-ordered”. What I mean is, I build them first and then sell each one exclusively to one buyer only. That’s different than the packages I sell on the Warrior Forum where I sell a limited amount of PLR licenses (copies) of the same package to several buyers.

I do not have a service where I take orders for customized blog designs but I do have a subscriber/customer base that I listen to for ideas. If you offer custom orders as a service, then you’re a web designer, not a website flipper, and there’s a big difference. As I mentioned earlier, I have worked as a freelance designer in the past and while it’s great if design is your passion, there are better ways to make money doing the same amount of work (or less), especially if you’re creating niche blogs packages like I do.

There are several advantages to flipping new sites instead of doing custom orders, but the main one is that if you’re a flipper, you simply build what you like, when you like, and then find a buyer that likes what you built as opposed to creating a design that pleases one specific client. There are so many time-consuming issues that can arise between the client and the designer and that can virtually be eliminated by creating a site first and finding a buyer afterward. Obviously, this can vary a great deal depending on one’s skills, client base, etc., but I’m speaking from my own experience in doing it both ways.

FW: That makes total sense. The designs for your websites are pretty impressive and I’m not the only one that thinks that. All of your offers have tons of comments from people who really like your stuff. Do you do all the designs yourself or do you outsource that?

Well, thanks, I appreciate the kind words. Yes, I design most of them myself.

I do get a lot of comments on the Warrior Forum, and many times it’s to thank me for customer service in addition to the quality of the package, which is very rewarding because I try hard to help as many people as I can. Many of my customers are brand new to online business and you wouldn’t believe how appreciative they are if you just take a few extra minutes to explain something in detail for them. Unfortunately, it’s not very common in the Internet Marketing niche (judging by the feedback I get).

FW: How about the actual content on your websites. Do you write all those articles yourself?

I outsource the bulk of the writing. I actually enjoy writing, and have written articles for quite a few of my exclusive blog sales, but it’s not my strong point (especially time-wise), so it makes more sense to outsource it.

FW: If someone wanted to start their own “startup blog package business,” what advice would you give them to be successful at it?

Do something unique. When I say that, I don’t mean that you have to reinvent the wheel, but try and brand yourself as a seller and if you can add something to your packages that is only available through you, even better. Always be thinking ahead though, because you WILL be copied if you have any success at all and you have to be prepared to stay ahead of the copycats.

The most important thing aside from having a great product and service is the building an opt-in list. As cliche as it sounds, your email list is your most important asset and it’s important to get them to opt-in to a notification list so you can contact them whenever you have a new package available.

Also, one thing I can’t stress enough is to separate the buyers and prospects into different lists. So, as an example, you would have an optin list for people who have not yet purchased from you (prospects), and then have a different optin form for buyers after they purchase from you. You can set up rules in Aweber to have a buyer be taken off the prospect list automatically if they optin to the buyer list. I didn’t do this in the beginning, but after I did, it made a huge difference. Being able to send different emails and offers to each group is a must.

I don’t have a huge list by “Internet Marketing standards”, but they are loyal, repeat buyers because they trust me and know they can expect quality products and service. If all the marketplace options shut down tomorrow, I’d still have a business selling blog packages because I have those lists.

FW: I know you have a VIP signup for buyers of your blog packages. Can you give me the link for people to sign up to it?

To join the notification list, you can sign up at http://vip.suitej.com

I’m currently working on a site for SuiteJ.com that will provide info on all my offers (and everything else going on with me) in one place.

This is the second half of my indepth interview with Jay Piecha, or better known as “SuiteJ.” He’s a full-time website flipping professional with a lot of knowledge to share. If you missed the first half of this interview, you can check it out by clicking here.

FW: Aside from building and flipping websites, do you have your own websites that you maintain?

The most active sites I have had at once was probably in the neighborhood of 35-40, but now I’m down to about 10-15 micro-niche sites and they all have the potential to be sold at some point. However, I have recently started to build bigger ones that will be sustainable, passive money-makers that I plan to keep as long term investments.

I now stick to building sites in niches that I have some interest in as opposed to doing sites based purely on niche research. You know the ones I mean; a 4-5 page site based on a product search term like StainlessSteelBagelToaster.com (lol)

FW: LOL. Been there. Done that:) Do you ever BUY established websites, fix them up, and then sell them?

You know what’s funny. I don’t buy very many these days, but that’s how I started flipping websites, buying and selling cheap sites. The first thing I did was a good little model to make a few extra bucks quckly. In 2008, when I started, I would buy sites that weren’t making any money, but had PageRank of 3 or higher. I’d pick them up often for $100-200.

At the time, it was pretty easy to sell text links if you had good PageRank, so I would buy a site, and then immediately post a ad to sell 8 text links at $25- 45 each. I’d usually sell out very quickly and always make enough to cover the purchase price of the site, plus a little profit. Then what I would do is tweak the design a little, and then sell the site again for $100-200 or more, depending on the site. My profit was always at least 100% above what I paid for the site, and was a fairly simple process. I was doing this primarily on Digital Point for a while, but then I started to deal with a few people privately on a regular basis.

The problem is sites worth buying don’t pop up every day, so this particular model isn’t something you would want to try and do to make a living on. Plus, I’m not sure if selling text links are going to fly anymore these days, but I’m sure someone reading this could do the same thing by putting their own twist on the idea.

FW: Can you tell me about your most successful flip?

Well, obviously the adult business was technically my successful sale as it was one that sold for a year’s worth of income, but I don’t really count it as a notch in my flipper belt because like I mentioned earlier, I didn’t start it with the intention of flipping it later.

As for sites I DO create or buy with the intention of flipping, I’ve almost always dealt with sites under $1500. I just try to pump them out more than the sellers who do the higher priced deals. Also, I almost exclusively sell new sites.

When I was still buying/selling cheap sites, I had purchased one for $350 that I probably should have kept for longer. Aside from adding a nicer theme and repositioning the affiliate ads, I didn’t have to do much else except some basic on page SEO. After just a few hours of work here and there over a week’s time, I basically just let it sit. After a few weeks, I noticed it was trickling in sales and rising in Google results, and once it had made about $500 in revenue, I sold it for $2400.

I don’t really have many “glamorous” flips under my belt that would impress the masses, because I’ve always concentrated on creating steady income mixed with the flipping mentality. I started developing my own brand of new site flips/blog packages because I knew I could quickly turn that into a solid business model as opposed to searching for deals on established sites and waiting for them to mature/profit.

That being said, I’m now starting to change things up a bit and create new sites with the intention of flipping them, but holding on to them until they mature enough to be worth much more, so when you interview me again in 2011, I may have a glamorous tale.

FW: I look forward to that. Have you ever been burned, or lost money, on a flip?

I’ve been lucky enough to avoid being burned, but I know several sellers who have been. My general rule is that I always use an Escrow service if I’m selling anything over $1000. However, I have broken that rule several times because I have so many repeat customers that I know are trustworthy.

If you you’re doing business with a new buyer though, then it’s a good idea to use Escrow for bigger sales. I know many sellers that actually use $500 as a cap for PayPal, but it just depends how comfortable you are in the risk.

FW: Finally, I know you are launching a blog where you’ll be talking about website flipping. What’s the url and what’s your angle going to be?

Yeah, that’s coming very soon at BULLFLIP.com

My angle? A No-Bullshit, personalized approach to blogging about website flipping. Hence, the name of the site. What you can expect is a real account of what it’s like to be a website flipper, in addition to learning how to do what I do, what’s going on in the industry, real product reviews, etc.

I have a lot of knowledge to share and I also genuinely like to help people. I will also be reviewing products like products should be reviewed. It won’t be all sunshine and roses, because you know why? Some products are garbage. When my subscribers want a review on a product, I’ll tell them if it sucks and why because my reputation for telling it like it is is more important to me than a chance at an affiliate commission on something I shouldn’t have recommended.

Does that mean I know everything there is to know about the website flipping industry? No! Not even close! But that’s an important aspect of my blog as well. I’ve had a lot of success but I’m still actively trying to get to another level as a website flipper and I’ll be sharing all the ups, downs, and in betweens as I go.

Plus, anyone that knows me knows I don’t take things too seriously, so there will be a little humor and sarcasm thrown into the mix. I’m not always funny, but I try real hard.

FW: Sounds like a great concept. I’m sure it will have a great following. Thanks for your time Jay and I look forward to talking to you again soon!

You can check out Jay’s websites at SuiteJ.com and BullFlip.com

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.

Note: If you’re considering selling your site through a website broker, please click here to fill out our “sell your website” form.

Should you consider hiring a website broker when selling your websites? After reading this interview I had with Michael Koral, lead broker for WeSellYourSite.com, you’ll be able to answer that question yourself. Based on what I learned in the interview, the answer is a resounding yes if you have a website for sale that is worth at least $50,000. For sites worth less than that, you may want to look at our other website brokerage post.

I have never used a website broker myself but then again I’ve never owned a website worth that much money. Given the amount of work brokers do to sell your website and the network of high-end buyers they have access to, I would definitely use one and wouldn’t hesitate recommending a website broker either.

FW: Michael thanks for taking the time to do this interview. Tell me a little bit about yourself.

I have been browsing the web since I was 13. I graduated from Dalhousie University in 2005 with a Bachelor of Commerce and have since been honing my sales skills in several different industries. I started my career as a sales rep at Xerox Canada as they had a fantastic sales training program that has been accredited for years. I moved on from there to become an Internet Marketing Consultant at MenuPalace.com. It was here where I gained insight to making money online by selling advertising space and managing ad campaigns for over 150 different clients. After almost 3 years at that position, I partnered up with a few colleagues and helped grow www.WeSellYourSite.com as a website broker. My experience in the online space and the sales skills I have gained over the years has helped me grow into a professional e-business broker at WeSellYourSite.com.

FW: Tell me about your company, WeSellYourSite.com.

The company is a sister company to AyceInternet.com, a complete web development firm located in Toronto, Canada. Ayce Internet (All You Can Eat Internet) and WeSellYourSite.com have been operating since 2005. We have 3 brokers, including myself and together we have sold several million dollars worth of web based businesses. Over the years, the company has helped numerous webmasters sell off their business for a fair price. We handle the entire sales process. From site valuation, to fielding buyer inquiries, to due diligence, to contract negotiations, to closing the sale, WeSellYourSite.com does it all.

FW: What exactly is a website broker and what does a broker do?

A website broker helps webmasters sell their e-business. A website broker evaluates the business and positions it to sell at a price that is fair for both the buyer and the seller. Some website brokers do more than others, but we handle the entire sales process. Since we operate with AyceInternet.com, we also help either the buyer or the seller increase the value of their website by implementing new designs and marketing strategies.

FW: I would imagine just a few years ago the web brokerage industry was rather obscure. How has the industry evolved today?

I think the “buying and selling websites” industry is still in its infancy. If you search for “website brokers” in Google I am sure you will find numerous websites that are on the subject, but not that many people are actually a website broker by profession. As the Internet continues to grow in popularity, people are seeking more ways to make money online to supplement or even replace their regular stream of income. One of these avenues is website flipping (or buying and selling websites). Most of us brokers are still trying to educate the industry that website brokers actually exist and that there is a benefit to going with one. In the last year or so, I have received more seller inquires through my website than in years past, but that is mainly attributed to the marketing I do on my own (interviews like this help for sure!). Blog writing, article writing and interviews are a great way to educate the industry without being too aggressive in your approach.

FW: I think when most people hear the word “website broker” they automatically assume only sellers use brokers but do buyers use website brokers as well?

Sure. We have a network of buyers that we represent. We send out emails to these buyers with e-business opportunities in their investment range all the time.

FW: Can buyers contact a website broker and just ask what is available for sale or is there more involved?

A buyer can contact a website broker at any time to get a complete run down of their listings. This is at least the case with us at WeSellYourSite.com. All the buyer has to do is visit our site, take a look at the listings they are interested in and sign a non-disclosure agreement for each listing they want more information on. There are no fees whatsoever. We simply have them sign the NDAs to protect the sellers’ information.

FW: Does your company primarily work with buyers or sellers?

We work with both. We found that once we list a website, we receive countless buyer inquiries. Obviously, only one buyer can buy any given e-business so we are then left with numerous buyers who are seeking a certain type of e-business that did not get to purchase that initial offering.

FW: Can you walk me through the general sales process from beginning to end when a broker is involved?

Website brokers generally handle the entire sales process. If we represent a buyer, we simply just find out what they are looking for (how much money they have to invest, what type of sites they are looking for, what kind of deal structure they are willing to accept, etc). When we represent a seller, we go through pretty much the same process as a real estate agent. Before we enter into an agreement with a seller, we do our own due diligence. We want to make sure the seller is selling a legitimate business so we do not waste our time with them. We analyze their traffic and revenue streams, confirm profits via bank statements and tax returns and scour the Internet for articles and information about the business in question.

Once they pass our due diligence test, we get the seller to sign our exclusive listing agreement. We then gather as much information as we need to sell the business. We create a proper prospectus, acquire financial statements and traffic analytics and put all this into a proper sales package that we send out to prospects. Once we list it on our website we handle all prospect inquiries, and do what is needed to get an offer for the business. Once we negotiate a fair price for the business, we get a contract signed between the buyer and seller and enter the due diligence period. At this point the buyer inspects the seller’s business to ensure everything that was presented to them is, in fact, true. At the date of closing, we handle the exchange of money via an escrow service.

FW: Can you tell what’s happening behind the scenes to market the websites you’re selling? You’re obviously not listing your websites for sale on Flippa so what are you doing to get your websites sold?

We have a network of buyers in place that we have created over the years of running the business. For every business we put up for sale, we receive countless buyer inquiries, so our network is quite large now. No, we do not list our sites on Flippa. We are part of a number of brokerage websites that we pay for on a monthly basis. That helps cast a wide net and get the website sold as fast as possible. If our network of buyers are not interested in the business, someone will find our listing on one of these sites and we will get the website sold.

FW: I’m sure it varies, but on average, how long does it take for a website broker to sell a website?

You are right, it does vary, but I would have to say it takes an average of 60 days to close a business. It depends on the due diligence period most of the time. Some buyers need more time than others and that is somewhat out of our hands. One due diligence period lasted for a couple of months because the buyer was asking the seller for items that he could not provide in a short amount of time (Tax returns, for instance).

FW: On average, what do websites typically sell for – is it the “standard” 10-12 x monthly revenue?

Websites usually sell for two years profit. This too depends on the website in question. If a website has only been operating for 6 months, it may only sell for the profit that it generated in that 6 month period. If a website has had growing profits for 3 years and has a fantastic domain name and high growth potential, then it may sell for much more than 2 years profit.

FW: Let’s talk legalities and contracts for a minute. I’m assuming there are agreements in place when you work with your clients, correct?

We certainly have listing agreements in place when representing a seller. We also make sure that every buyer signs a non-disclosure agreement before receiving information on any given business.

FW: How long are the listing agreements in place?

We typically sign listing agreements for 120 days.

FW: How hard is it for a seller to get out of an agreement with a website broker in the event they aren’t happy with the service they’re getting? And are there typically any fees involved when canceling?

This is usually handled on a case-by-case basis. Before the seller enters into the agreement, they can decide how long they want the agreement to go on for. There are no fees to cancel the agreement, but there needs to be a valid reason as to why they want to get out of it. Sellers would typically wait for the agreement to expire if they are not happy with the service.

FW: Does your company charge any upfront fees and is the brokerage fee a flat fee or a percentage of sale?

We do not charge any upfront fees. We have a broker fee that is paid by the seller only once the website is sold. It is a fee that is a percentage of the sale.

FW: You don’t have to tell me what your company specifically charges as I’m sure you’d like to handle that on a case-by-case basis, but what can someone expect to pay when using a website broker?

Typically fees can range anywhere from 8-12% of the sale price.

FW: What are the average price ranges of websites that your company works with?

The websites that we typically sell need to be turning a substantial profit for at least a year. So, if it profits at least $2,000-$3,000 per month for 12 months, we would be interested in it. We typically deal with websites that we can sell anywhere from $50,000- $5 million. Any smaller site is not really worth our time as it takes the same amount of time to sell a $30,000 business as it does to sell a $900,000 business. There are obviously exceptions to this as we may do favours here and there for previous clients of ours.

If you’d like to work with a website broker, please click here to fill out our “sell your website” form.

Michael Koral can be contacted through his company’s website WeSellYourSite.com, or by email at Michael@wesellyoursite.com or by phone at (416) 551-0300.

Have You Used A Website Broker?
Please Share Your Experiences In The Comments Below!

Folks, I’m not going to lie to you here, but this is one looooong interview (my first two-part interview) but a must read for any website flipper! This is an interview I had with JD Carr, an experienced and successful site flipper who provides some incredible insight into what it takes to be successful. He stresses that the three keys to success are relationships, community, and networks.
In this interview you’ll learn how JD applies these to his businesses and how you can too. You’ll see the three keys in action with his newly launched website flipping community, DigitalFlipster.com, and JustClickAuctions.com, a marketplace for website buyers and sellers.

Tell me a little bit about yourself – what your background is, how long you’ve been an Internet Marketer and what specific areas of Internet Marketing you specialize in.

Well first off let me thank you Travis for taking the time to help us get our message out. I love what you’re doing with FlipWebsites.com because it’s so important to get the right message about our evolving industry out there. To answer your question, I’ve been involved in ecommerce and web development since the early days of the Internet. My first real online company was MDSI which was a portable and online electronic medical record system. Back in 1998, SanDisk created one of the first mobile medical record carrier devices called the P-Tag. They originally developed it for the Army but what we did as MDSI was build an online medical record management system around the P-Tag for commercial use. This was the early days of electronic medical records (EMR) so we played a small part in that evolution. We raised some money, did a field trial and sold the company. That was one of my first experiences dealing with large data warehousing projects, online development, and obviously the sell of a company I had created.

I really got into web development by building websites for my own ventures after MDSI. I learned that I really enjoy creating companies and selling them off and I especially love online companies. In the early days of the Internet, we had BBS and forums on sites like AOL. Back then it was primarily geeks like myself on them but we had a real sense of community. As the Internet evolved, we lost that for a while but social networking has really brought the community aspect to the forefront and so naturally I started figuring out ways to combine web development, selling, and social networking into a business model. That’s primarily what my company does today and how we came about.

I believe there are two types of site flippers – short-term flippers and long-term flippers. A short-term flipper is someone who buys (or builds) websites with the sole intent of adding value to them so they can quickly sell them for a profit. A long-term flipper is someone who buys (or builds) and HOLDS the property for a while (a year or more) and then down the road sells it. What camp do you fall in?

I agree with you. I know some that are short-term flippers and others that are definitely taking a long-term approach. Until recently I probably fell into the short-term category. I think either approach works well but my preference at this point is the long-term one because frankly there’s more money in it. Short-term flipping is exciting though and definitely a great way to make some fast cash.

How many sites have you sold in the past year?

Over the past year I’ve primarily been working with a company I started in September 2008. It was a niche network and online training school that I just sold a couple of weeks ago. So for the past year or so I’ve been focused on that as well as launching another niche company using the same business model. I have flipped a few blogs/websites though during that time. I maybe did 10 last year and have done 4 this year already. Certainly my focus however is on the longer-term projects as I mentioned earlier.

Can I ask you what general price ranges your websites have sold for?

On blogs and smaller websites I typically try to sell in the $250 – $1,500 range. I always focus on building traffic, readership, and some decent stats before I’ll even attempt to sell it. I’m a firm believer that if you build value in your sites, folks will pay for that value. Now on larger projects such as the one I just sold, the sale included a 5,000 member network and an online training school for that specific niche. I basically worked on the project for a year and the site along with the network netted just over $60,000.00. I could have probably held it a little while longer and gotten more but I was ready to move onto other projects including the one I’m working on now which I’ll talk about shortly.

Where do you primarily sell your websites – do you sell them publicly on sites like Flippa or do you sell them privately?

Thus far they’ve all been sold privately. Obviously now I’ll begin selling them on our new auction site.

How do you go about selling a site privately?

That’s a great question. I’ve worked hard to develop a large network to tap into when I’m looking for buyers. I think relationships are key to any successful flipper. Anytime I create a new site, network, or whatever, I’m always starting out with the assumption that I’ll be selling it down the road. This includes sites that I acquire to build up for later sell. So, for example if I’m working on a niche site in the pet sector, I make sure that I reach out to and develop relationships with folks in that space that I can approach when I’m ready to sell. Industry insiders always are interested in buying or if not, they usually know who is.

Go To Part 2 Of This Interview

Now I understand you have a very specific type of business model that you follow with your websites. It has to do with building a community around a product or service and then soft-selling the community various products and services. Can you talk to me about this and why it’s been so effective?

Yeah it’s one that works for us and I think will work for others if they’ll do it. As I mentioned before, community and networks are very important to becoming a successful flipper in my opinion. What I’ve discovered is that if you will take the time to develop relationships within a community, members are far more receptive to buying from you. Think about how many advertising messages are thrown at us on a daily basis. It’s in the thousands for a typical person. We’re constantly being bombarded with others trying to sell to us. I personally am more open to buying from someone I know vs. someone that is just pushing a product or service in my face.

That’s why I think it’s crucial for flippers to develop a large network. With social media today, it’s possible to develop one globally, online, for just about any niche out there. Taking this a step further, what I do in my own business is develop my own social network around a product. For example, right now I have a company called Greenergy2030.com that we launched a couple of months ago. We’ve developed a green business certification program that we sell but we’ve wrapped a social network around it. We have just under 700 member companies already on there and are growing weekly. What the social network allows us to do is to develop a dialog with these companies that join our free network. We’re able to reach out to them on the network forums, via our newsletters, and countless other ways. They get to know me because as they’re active on the network, they see my blog posts and receive regular network updates from me. These members are far more receptive to buying from me as a result.

Plus think about this. If you’ve got a niche network, the members of that network are highly qualified leads. For example, if you build a network focused on horse racing, who do you think is going to take the time to join that network? You got it…people interested in horse racing! More importantly, using invites, they’ll bring all of their horse-racing buddies to your network. Now think of all the ways you can make money off of this type of system. First off you can create products or services that appeal to horse racing fans. Plus, if you build a network up large enough, you can make even more money by selling advertising to others that are trying to sell to horse racing fans. That list of members has a lot of value as well. Obviously this is just one example but this business model can be applied to virtually any niche if executed well.

And with tools like Ning and SocialGo out there, building a social network around products or services has never been easier. The trick is to find a niche that isn’t being served well and building a community that benefits members. If you do that, you can sell your products or services to them because they know and trust you. You still have to offer a great product or service but the selling process is much more effective under this model.

Speaking of this business model, you just launched a site flipping community and a service – a website flipping marketplace. Tell me about it.

Yep you got it. We’ve just launched DigitalFlipster.com this week which is our online network for anyone that is active or interested in becoming a digital media flipper. We provide free training, resources and other tools designed solely to help flippers become more successful. Additionally we’re in the process of rolling out the JustClickAuctions.com marketplace which we’ve recently acquired. We’re working on enhancements of the site that will only further our goal of helping buyers and sellers in their deals. One of my major goals is to become a great information and networking source for all flippers that are serious about succeeding in the industry and that’s what we’re working towards with our new community.

There is no doubt that Flippa is the 800 pound gorilla and is essentially the “eBay” of the site flipping industry right now. How are you going to compete? What’s your USP going to be?

Yes Flippa has done a great job and certainly has been a pioneer in our industry. That being said, I think that a lot of things can be done better. It’s important to remember that this industry is only now really emerging and will only get bigger. There have been techies that have been flipping for years but what is really exciting right now is watching it go a little more mainstream. Because of this progression in our industry, I think buyers and sellers will need options and my goal is to make JustClickAuctions.com one of them.

We’ll compete on price to a point but more importantly, we’re going to really focus on giving our community members the tools they need to really become successful flippers. So we’re really focused on things like education, networking and new technologies to give our auction sellers the very best chance at success. Remember, at the end of the day, it’s not which auction marketplace is the largest. It’s the one that will get you the most money when you’re selling off a site.

JustClickAuctions.com is focused on enabling our sellers to do just that. We have some key technologies that we’ll be announcing in coming weeks and months but I can confidently say that our marketplace will be an extremely competitive one. Additionally, I feel that if our sellers are building better sites to auction, this brings more value to our buyers. As more and more people are seeking to start online companies, it makes sense to consider buying an existing site, community, or application to sell versus building from scratch. The better job sellers do of building great sites, the more successful buyers will be once they’ve bought through our marketplace.

We’re going to be offering our community members free listings for a while so that they can get to know how our system works and our community at DigitalFlipster.com will always be free. So we’re going to be doing things a little differently from sites like Flippa but they’re things that I think will only benefit our industry overall.

I get emails weekly from people who have either launched their own marketplace or are looking to launch their own marketplace. And as a site flipper myself, I’ve seen these marketplaces come and go. For whatever reason, nothing seems to “stick.” How do you plan to be the one that “works” and actually sticks around to be a viable alternative for site flippers?

Yes I have seen this as well. My experience has been that patience is needed when you’re entering a new space such as ours. These sites have come and gone primarily because their owners didn’t put in the time necessary to establish them correctly. I have a lot of patience when it comes to things I really believe in and digital media flipping is one of my passions. This is the first company I’ve launched in over a decade that I don’t intend to sell off within the next few years. So that’s one thing we have going for us.

More importantly however, I think differentiation is the key to any successful business. I don’t care about JustClickAuctions.com being the largest marketplace. What I’m mainly concerned with is creating value for our customers who are digital media sellers and buyers. This means I have to ensure that I have a great product, at a great price. I’m hoping that our sellers will use Digital Flipster to let us know what they need. That’s the real value of a community such as ours because we can collaborate together to make the marketplace, and the industry for that matter, what we all want it to become. If we do all of these things successfully, I believe we’ll be successful in our industry. I don’t care about becoming the Microsoft of our industry. I’ll settle for being the Apple of it however.

I want to thank JD for his time and for his invaluable insight on what it takes to be a successful website flipper. I hope his new businesses do well and I look forward to them becoming the next Apple of our industry!

Go Back To Part 1 Of This Interview