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Buying & Selling Websites

After the Honeymoon

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Is there a plugin for WordPress that plays MP3s? I really wanted to open this post with Earth Wind and Fire – “After the Love Has Gone”, but I guess I’ll have to settle for my crappy photoshop metaphor.

This post was inspired by the amount of passion stirred up in the comments of a recent post on Flippin Awesome (Is Flippa Losing It). For anyone that hasn’t yet been over to the blog, I’d highly recommend it; the site is run by Amy and Ian, two honest, hardworking and all round wholesome people who earn their living from Flipping Websites. They recently discovered what many had been (un)fortunate enough to experience, in that the honeymoon period at Flippa is well and truly over.

The days of selling sites with no traffic or revenue for upwards of $200 are gone and just like the bottom falling out of the property market, the first in are often the first to suffer.

The purpose of this post isn’t a “how to” or even a “what to do next”, but I’m surprised by the reactions and attitudes of those involved. This discussion isn’t unique; on forums, message boards and countless other blogs people have realised a change has happened but merely bringing up the subject is often met with scorn rather than support.

Many of the “I told you it would happen” clan are experienced, long term internet marketers who in fairness, never jumped on the bandwagon and do speak the truth in what they say. However, they seem to have forgotten that in order to be a success, they would have at some point, exploited a niche opportunity themselves.

People came to Flippa in search of a way to get into Internet Marketing without the technical hard work, and chose to buy a starter site as they saw it as a way of achieving this. The people creating and selling these sites were simply satisfying a niche demand. I doubt they would be under fire if they had sold a crappy $60 eBook on curing back pain in dogs, DIY teeth whitening or making money from guinea pig farming so why should selling starter sites attract so much criticism?

Internet marketing is the strangest and greatest community I’ve ever been part of, and I’ve been part of some really wacky communities.

This is an industry where almost 1/3 of the revenue generated is generated from within the community (e.g. people learning how to get rich, so they can teach others to do it themselves); surely knowing that’s how we all began, is it really right to condemn the newcomers who simply recognised a demand and chose to fill it?

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  • http://www.flippingawesome.com Ian & Amy Anderson

    Hey Justin,

    Your line “bringing up the subject is often met with scorn rather than support. ” is very true! The post you mention has become our more popular post and is mostly filled with ‘scorn’.

    What’s particularly strange is that some people that have never visited our blog before, came by just to slam us and tell us how horrible we are.

    Talk to you soon!
    Ian

    • http://flipfilter.com justin

      Hey Ian

      It’s unfortunate, but it’s easier to say negative things and point out what’s broken in the world rather than appreciate were all here to earn a living.

      On the upside you’ve created content that’s stimulated debate and got their attention so something good came out of it!

  • http://www.socialtwo.com Social Two

    everyones also being really down on flippa.com when its neither their fault or their problem.

    nobody blamed ebay when people were listing turnkey (or maybe turkey :) ) websites on there so its not fair to do the same here

    Michael

    • http://flipfilter.com justin

      That’s very true.

      Flippa is essentially a business and I believe that if they’ve made a wrong choice then it will bite them on the ass, but until then, why not make hay!

  • http://experienced-people.net/forums/forum.php Clinton

    Great topic for a post, Justin, and a timely one too :)

    I’m from the “clan” who’s been warning about this for ages as you know. But I wouldn’t call myself a long term marketer (or any type of marketer). I’m an investor, a buyer of online properties, a developer of website businesses. You aren’t confusing us all with marketers, are you? ;)

    “People came to Flippa in search of a way to get into Internet Marketing”
    Again, marketing? People came to make money. People came to get into the business of profiting from websites.

    I would have said some more about the actual Flippa issue, but you kinda distracted me ;)
    .-= Clinton´s last blog ..Hello From the US =-.

    • http://flipfilter.com justin

      Hey Clinton,

      You know I love to exploit an opportunity…that’s what makes me a ‘internet marketer’ :)

      I used the term marketing because when I’ve looked at what I do in internet businesses as opposed to my offline one I spend at least 80% of time in the promotion of what has been built. Offline I spend an even amount of time managing issues like personnel, finance, operations; being an 8 person company this will often extend to anything and everything from hoovering my office to locking up at the end of day. Marketing plays a smaller role. Online, most of what I spend my time on is marketing and this will increase even further once we’ve finished creating a usable version of the app.

      I admire your integrity; you don’t dilute your message in order to be political or safe and that I’ll always prefer over someone who simply sits on the fence. But the issue has gone past being about Flippa – your success now is an inspiration and you’ve clearly got enough knowledge on how to create and promote (yes that’s marketing :) ) a forum to write a book. My point is, you had to start somewhere too – and we both come from the same place IM wise. Before it went online, it was done through direct mail and I’d guess that you were on as many ‘Home Opportunity’ lists as I we’re and probably still receive the odd letter even today!

      It’s unfair to attack people who chose to profit from giving people what they want. The public (on the whole) are not idiots and can make a conscious decision over whether something they are about to buy has value – to them! If that $150 saves them hours of time, labour and learning, then no wrong has been done by anyone willing to meet their needs.

  • James

    The honeymoon is over on Flippa because Flippa of Flippa’s strategy.
    I know a few people who sell startup sites, they all are saying their auctions get mostly bidders who just registered with Flippa in the last few days, most of them are non paying bidders. There was a very sudden drop in bids and paying bidders. Why did it happen so suddenly ?

    From 2000 to 2004 selling startup sites on ebay was the best place, in 2005 ebay made “improvements” so sales went down, everybody was saying the same thing what people are saying now about flippa “the days of easy selling startup sites for $200 are gone”.
    But when a new site like flippa opened, suddenly the same startup sites were selling again, for more money than ever sold on ebay.
    If the days of selling startups were over like everybody was saying in 2005, why the same sites were selling for more than before on a new website marketplace like flippa ?

    For example, at the same time in March and April 2010, the same sites listed on flippa sold for $500, but the same listing on ebay, with the same amount of views could not even get a $50 bid ?
    Someone watching only ebay for the last 5 years would say that people are not buying startups for more then $50 because the market is already saturated.
    But at the same time someone watching only Flippa sales would say the market is booming.
    Why such a big difference at the same time at 2 different places ? is it not the traffic quality ?

    It looks like what’s happening on Flippa now is the same what happened on eBay 5 years ago. The real reason for bad sales is Flippa’s “improvements” and their new strategy.

    • http://flipfilter.com justin

      Hi James,

      That’s an interesting take – I never really looked at ebay back in 2004 for buying websites so I don’t really know the history but this gives me some background.

      I guess there’s two debates; one concerning individual’s responsibility for selling starter sites for what the “experienced clan” say is too much and the other is whether Flippa has a responsibility in allowing this to happen.

      I guess you’re right in that it does boil down to quality of traffic. I think it’s also about the demographic of the visitor. I can post a site for sale on the front page of something like Hacker News or get a stumble upon to my listing and have thousands of views, but essentially unless those people are there to buy (and ultimately pay :) ) then it wont result in bids. This is the fundamental difference between Ebay and Flippa.

      Flippa is highly targeted to selling web businesses, whilst anyone looking in the business for sale section of ebay is likely to be more of an opportunity seeker rather than a web business buyer; but as you’ve pointed out, it probably hasn’t always been that way, so ultimately this may be a crystal ball moment for Flippa should things not change.

      Do you really think we can blame Flippa for being popular though? If you look at the change in their traffic, there’s been a massive rise in non US or EU visitors but unless they’ve ran a campaign to deliberately target those places how have they done anything but be a victim of their own success?

  • James

    The thing is that Flippa (just like ebay before them) is forgetting who made them successful.

    It’s the startup site sellers who made and still make most money for Flippa, there is more startup site sellers and they are the ones who list more auctions resulting in big profits for Flippa.
    High End site sellers don’t make much money for flippa, they can make them maximum $498 in success fees, but there is much less of them. Also High End sites are not the sites that interest most Flippa visitors.

    Most flippa visitors can spend only a few hundred dollars for a site, and they are not buying just a site but also some information and help offered by sellers, guides and some extras. It’s cheaper and faster then hiring a designer and building a site from scratch.
    The only people who have a problem with startup sites are high end sellers, probably because they think it takes away some of their business, or they think the the money is too easy for the amount of work startup site sellers put in.

    Anyway, the fact is that Flippa makes most money from startup site sellers, so I think it would be nice for Flippa to invest some of that money to get some better quality traffic so the sellers who make them most money can continue to get some sales and have a reason to continue to sell on Flippa.
    But Flippa is not doing much to help sellers who made Flippa successful, that’s the problem.

    • http://flipfilter.com justin

      I understand what you mean now and I couldn’t agree more.

      I guess everyone (myself included) has almost given up on Flippa without really looking at solving the route cause of the problem.

      Inevitably, if there are issues lower down (non paying bidders, fraud) it’s not long before that will filter up to the higher value sites so something has to be done soon.

      Thanks James

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  • http://experienced-people.net/forums/blog.php Clinton

    Simple Truth: The market flopped because it was artificially inflated to start with. ;)

    Justin, feel free to call yourself a marketer, mate, or anything else for that matter. But I’ll beg to differ on my origins. I’m not a marketer. :)

    There are thousands of ways of earning a decent living online that don’t involve marketing in any way, shape or form and most of the millions I’ve earned came that way. There is “also” marketing which constitutes, IMHO, less than 20% of online profiting opportunities. But marketers, being good at what they do, seem to have you all convinced that marketing is the one and only way (to the extent that some people treat online money making opportunities as synonymous with IM).

    >>but I’m surprised by the reactions and attitudes of those involved
    Whose reactions and attitudes are you surprised by? Experienced hands who never “jumped the bandwagon” kept saying why they were not jumping in and explained that there’s neither the big money nor the long term future in a particular route. Newbies to the business ignored that and jumped in because they saw a few quick dollars (more likely they got carried away by all the hype).

    Ian and Amy, and others like them, may be honest and hardworking and genuine and decent people, but if they knock on your door to preach the gospel according to Mad King George III it doesn’t matter how much they believe it in themselves, the message is still worthless.

    Contrary to what you believe, nobody I know has a problem with templates or selling of templates. I think templates are a Good Thing for people looking to get into online busineses. However Flippa realised that more sellers = more profit and they found they weren’t getting more sellers of actual web businesses so they decided to pump up the market for templates. In a very cynical way they followed an agenda of getting people to believe there is a lot of money in selling templates. They were aided and abetted by some marketers. And naive newbies fell for the bait.

    But those sellers had to keep seeing sales so Flippa embarked on a program of getting new buyers in by exaggerating how easy it is to buy a template and turn it into a successful site. So buyers flooded in to ride the wave and they bought templates.

    And template sellers flourished. For a while.

    Have the wheels come off that chariot? Maybe not. There’s a current temporary setback while the market adjusts but Flippa will find a new way of attracting people to buy a template and get rich, they’ll find new ways to appeal to the naive and the greedy. And template sellers will adjust to the new market. And it will tank again.

    I have a lot of respect for you and your abilities particularly with data. What would be interesting is if you could collect data to demostrate how artificially inflated the market for templates is. Perhaps you can survey a hundred buyers 3/6/12 months after purchase and see what percent are actually making money. Because that’s where the end of the food chain is.

    >>This is an industry where almost 1/3 of the revenue generated is generated from within the community (e.g. people learning how to get rich, so they can teach others to do it themselves);

    I’m glad I’m not part of what, by your description, sounds like a pretty incestuous and seedy industry. What information I and others share on my forums and the thousands of people we’ve helped costed beneficiaries not a dime. If they had to put a name to what I do I reckon they’d call it support rather than scorn.
    .-= Clinton´s last blog ..Flippas, Floppas, MotherFrockers, what the heck’s happening with Website Flipping? =-.