Avoid Flippa Success Fees Completely
Posted on November 11th, 2009 by Dave Slutzkin
Hello! It’s hot in Melbourne, so we’ve got the lights off and we’re hard at work on Flippa features! Here’s a couple for you:
Waive the Flippa Success Fee for $99
If you want more certainty around your listing, you can now completely avoid being charged a success fee on a successful website sale! A lot of people wanted this, and now we have it. All you need to do is select and pay for a particular option at the start of your listing:
This is like success fee “insurance”, I guess. It costs you up-front, but it means that you have absolute certainty about what will happen on a successful sale – no need to worry about success fee invoices.
Net Profit Disclosed on Listings
A few people recently have brought to our attention that we ask sellers for Revenue, but not for Profit – and for some businesses these are completely different things. So we’ve added this field:
This lets buyers get a better sense of the differences between two listings with the same revenue numbers. If you set it to zero, it’ll show “No profit claimed”, and this is what all listings show by default.
Usually this field won’t be changeable after the start of an auction, but as a transition measure we’ll let you change it for the next week or so.
Comments (56)
Comments are closed.
November 11, 2009 - 8:43 am
Sellers !!! You can Avoid the Success Fee COMPLETELY by choosing the buyer pays the 5% Success fee options.
Here is why:
[1] If you sell a cheap website the seller fee is so small that a buyer will simply not care about it
[2] If you sell a medium priced website, the success fee is still less than $99
[3] if you sell a medium-high priced site (over $2,000)
the buyer still won’t care about the success fee as it is only a small fraction of the price.
[4] if you sell a million dollar website than the buyer definitely doesn’t care, and flippa would prefer the commission don’t you think?
So who wants to be a sucker and pay the success fee?
Be a smart seller and just transfer the cost to the buyers.
the success fee as an insurance, what? omg that is the dumbest concept you must of heard of in quite some time, but nice try flippa.
November 11, 2009 - 12:07 pm
NYThemes, you are sorely mistaken if you thinks buyers don’t care about the fee and sellers can just push the fee onto buyers without it affecting the auction. A “smart seller” would see that there any many sellers who are offering to pay the entire success fee, and since there are so many sites available to buy at any given time, forcing your buyer to pay an additional 5% will put your auction at a disadvantage.
If you have a quality site that will sell for more than $2,000, it is worth paying the $99 fee, unless you plan to ignore the success fee completely.
The entire idea of a success fee without any way to control the completion of the auction (via escrow) is a joke, because there are many ways to avoid the Flippa process and complete the sale outside of this site. I have been calling it a tax on honesty because of this, and I am glad to see that it is being phased out.
November 11, 2009 - 3:23 pm
>> A lot of people wanted this
A lot of people wanted to pay you $99 whether or not their site sold? Really…?
November 11, 2009 - 4:27 pm
I think a lot of people who are selling a quality, established site with hundreds of dollars of revenue per month would want a lower flat fee than a higher sliding scale. Of course, sellers really want to list sites without fees of any kind, but I wouldn’t hold your breath waiting for that option here.
Will there be a way to search for auctions that are listed without a success fee?
What happens when a buyer wins one of these auctions and then backs out? Is the seller out $99, or will they get a relisting?
November 11, 2009 - 6:49 pm
>>I think a lot of people who are selling a quality, established site with hundreds of dollars of revenue per month would want a lower flat fee than a higher sliding scale.
A lot of people are selling quality, established sites? Where?
But I agree with you on everything else.
November 11, 2009 - 7:36 pm
3Six, there are some good sites for sale out there. You just have to put in the effort to sift through all the junk, which is especially difficult at Flippa since the auctions for crappy sites that will never sell are resurrected upon expiration, which adds even more clutter to the listings.
November 11, 2009 - 8:13 pm
WTF? You reduced the number of listings shown in the Featured section? This means my listing will be shown on the frontpage for a much lesser time! What’s wrong with you guys? C’mon, we pay 29 USD to get featured for a limited time and now with the very limited number of listings shown, the limited time is much limited now? How does having a slightly lengthier frontpage affect you guys?
Just because you have traffic it doesnt mean you should cut throat on sellers. Its because of us why Flippa still exists! Remember that!
November 11, 2009 - 11:33 pm
You pay a fee to avoid a fee! haha
what is this world coming too
November 12, 2009 - 6:03 pm
Seems like a great deal to me if you are selling high-end sites, and makes no difference if you’re not.
Not sure what everyone is moaning about.
The only people missing out are Flippa with lost fees.
Give them a break guys.
Pete
November 13, 2009 - 3:05 am
Benitez it doesn’t matter how you spin this, it’s a bad deal for everyone, flippa included.
Paying $100 to avoid $10 fee, ya that is really smart.
Sellers will be glad to pay for performance, if flippa comes through and converts for them, they won’t pay for just a hope of selling a site, that they already pay for with the $20 listing fee.
If you want sellers to pay more for hope, then just increase the listing fee from $20 to $100. However a $120 listing fee, which is what you are arguing for is simply too big of a risk for many.
The success fee is a measure of performance, and flippa has a means of enforcing it via the rating system etc … if Flippa isn’t happy with their success fee revenue, this would be an opportunity to rethink their strategy, and clearly this new fee is not going to cut it.
Of course you can continue to argue how great this fee is, but all it does is leave a bad taste in a consumers mouth.
November 13, 2009 - 1:16 pm
Benitez, are you a seller or a buyer? From the look of it, i think your a buyer.
November 13, 2009 - 10:26 pm
So if I understand correctly if i pay $99 i wont have to pay the 19.95 listing fee and i wont have to pay a success fee at the end of a sell ? if i sell a site for example, at $450 5% of $450 would be much less than $99 is this option for higher priced sites?… thanks
November 14, 2009 - 3:31 am
sounds like Benitez is an insider
November 14, 2009 - 8:38 am
Matt, I am now considering listing the site on Flippa instead of one of your competitors because I think the flat fee is a good thing for all the reasons that I stated above, and any change away from a success fee is an improvement.
NY Themes, I am not any sort of insider. I am just someone who is always looking for well established sites to buy. I assume you have realized that you can’t actually find any problems with this change, and you have now resorted to insinuating that I am part of some sort of Flippa PR campaign rather than admitting you were wrong. If you look at some of the comments I have made in the past about Flippa, you will see that I haven’t had much positive to say about the site until now. I just don’t understand how anyone can see this flat fee option as a negative. If you or anyone else comes up with a legitimate problem with this change, I’d be happy to hear it and admit that I was wrong.
November 15, 2009 - 9:33 am
Please clarify,
We pay $99, and the 5% fee is GONE – FOREVER, we never have to pay the success fee of 5% again, Am I Correct? Let me know, and I’ll buy the insurance or whatever we can call it.
Love Flippa,
Thanks
November 15, 2009 - 7:53 pm
Ok this is a good one.
I have another promotional idea if flippa add JustBid option it will be more nice for buyer and seller.
Just think about it!
Thanks
Kazi
November 15, 2009 - 7:54 pm
LMAO!I have bought 8 sites so far and never paid a cent to flippa! I just tell the seller to close the auction and negociate by email.
Who wants to pay fees at this crappy site?
November 15, 2009 - 8:06 pm
yet more ways for flippa to make more money…….
I wouldn’t buy or sell a site at flippa ever. I would do what the guy above me does! lol
November 16, 2009 - 1:47 am
The last 2 comments are just plain stupid (#17 & #18), I think it’s time for you kids to go to bed it’s a school day tomorrow.
My suggestion for Flippa is offer a flat rate (monthly or yearly) for the people who buy/sell lots of sites. No other fees or expenses just a flat rate per month that allows me to buy/sell as many sites as I want.
November 18, 2009 - 2:58 am
Either you like the fee and pay the $99 or you find another service provider. Take it or leave it.
November 18, 2009 - 10:30 am
Why on earth did you ever even launch Flippa? I can’t stand it. SP marketplace was so much better. I hate how you put at the top of the flippa website ‘avoid the success fee completely’ when in reality the title of the blog post should be ‘avoid the success fee for a very significant one off payment of 100 USD regardless of whether your site sells or not’. So not cool.
November 18, 2009 - 3:11 pm
Agree with Tom. I preferred the old Marketplace. I found Flippa very confusing, trying to navigate my way through it.
I liked the Premium (or Established?) websites section on the Marketplace, so you could avoid all the crap. I sold a site through there for $20,000 and was VERY happy to pay a higher listing fee to be in a section with quality sites.
As suggested above. Flippa should do the same (if not go back to the Marketplace). Make a high fee for quality sites to have a section free of the three-week-old template sites. For me this an ABSOLUTE MUST.
$99 might be a tad high for such a service. I would certainly pay $50 for such a thing. That way Flippa don’t need to worry about collecting success fees as the fee would be paid in advance to make the listing. Saves all the stupid, crazy hassle with success fees.
I currently have a site for sale on Flippa. Dead quiet. I sold two previously on the Marketplace (in the Premium/Established section) and got a LOT of response and quick sales.
Seriously Flippa, you need a QUICK and DRASTIC rethink.
Oh yes, this stuff about buyers being happy to pay the seller’s costs because it’s not much???!! This shows disregard and disrespect for the customer, something I am sad to say I have experienced at the hands of Sitepoint, and I see reflected in that remark. Get a grip Sitepoint/Flippa!
November 21, 2009 - 5:02 am
Wow you just FORCED me to sell my website ELSEWHERE!! What I joke, what happened to SITEPOINT!?!? This place blows goats!!
November 21, 2009 - 7:56 am
This whole thing reminds me of a certain online game I used to play. At one point, it had millions of users and was making an absolute fortune.
Then they invested a ton of money into some massive changes in the game. Players cried out during beta testing that the changes were horrible, and if they went in they would quit playing, but they rolled forward.
Within the few months of rolling out with the changes, they lost (by industry estimates) 25-50% of their membership. Now, they have almost nothing. They’ve shut down more than half of servers, because there weren’t enough people playing on them to justify keeping them open.
They could have avoided their fate by simply taking the hit on development costs, admitting their horrendous mistake, and rolling back to the original system. But they refused to listen to their customers.
I’m afraid Flippa may eventually suffer the same fate. People are still desperately trying to sell here, but a huge portion of sites are going unsold, or selling for so little it’s absolutely laughable.
I loved Sitepoint Marketplace. It was a fantastic system, and I made good money there. Many people I know made good money there. These days, almost everyone I know has had to move on because their sites aren’t selling, or they are selling for 10% of what they used to.
I really hope Flippa will admit their mistake and roll back before it’s too late.
Don’t get me wrong, Flippa is doing a better job listening to users than it was initially. But it’s still a milliom miles away from Sitepoint.
November 24, 2009 - 1:40 pm
Ok guys, it all boils down to this…
If you’re selling a high-end website, you now have the option to pay Flippa LESS MONEY.
Consider it a favor. That’s the only thing that has changed…and it is an OPTION, not something you have to pay. For those that don’t like it, simply ignore it, and go on listing your sites like you always have. It doesn’t affect you.
Yes I know you could completely just avoid the success fee altogether by dealing with the buyer via email, and I’m sure that those who do that will continue to do so…To that camp I’d say, this doesn’t affect you either. Why complain?
So to summarize, the ONLY people who will experience any change are the people with high quality sites that will most definitely find a buyer. And it actually helps those guys SAVE money.
I wouldn’t be surprised if Flippa was working on some sort of escrow service anyway. Would likely take care of all the complaints about the success fee being pointless. Be patient guys…remember Flippa is only a few months old, and I think they’ve come a LONG way from where they started.
December 18, 2009 - 5:56 am
Yeah the profit numbers are the most important in my opinion. Revenues are important but if the business operates in the negative continuously than it will be even more difficult to sell.
January 12, 2011 - 3:45 am
I have been looking for a site to buy and sell web sites. I am going to bookmark this page and read before I comment more.
November 11, 2009 - 9:08 pm
NC,
“You reduced the number of listings shown in the Featured section?”
Um, no, we didn’t. What gives you that impression?
November 11, 2009 - 9:12 pm
Benitez17,
“Will there be a way to search for auctions that are listed without a success fee?”
Yes, but there isn’t yet. We’re working on that, thanks for reminding me.
“What happens when a buyer wins one of these auctions and then backs out? Is the seller out $99, or will they get a relisting?”
They’ll get a relisting under the same conditions – no success fee payable – once they go through the Dispute Procedure.
November 12, 2009 - 12:01 am
Thanks for clearing that up. Hopefully this move will bring in some quality sites for sale.
November 12, 2009 - 12:08 am
The seller can pay a higher up front fee to avoid paying an even higher fee later.
I don’t see what the problem is with this option. All the people cranking out $100 turnkey sites and listing them here won’t be affected, and the people who list established sites that will definitely sell for more than $2000 can take advantage of this option to bring in buyers who think the success fee is ridiculous and refuse to pay it, or save themselves up to $400 if they would have paid all of the fee. I think it will end up being a nice filter of people who are selling a real quality site, and people who are just throwing out some absurd asking price and hoping some sucker comes along and pays up.
November 12, 2009 - 6:55 pm
Pete, that isn’t strictly true. It’s a win, win for Flippa. It’s not a success fee but a fee paid in the hope you will save at a later time.
And those fees that are “lost” are already too high considering the lack of security for the seller.
In reply to “give them a break”. Why? We make the marketplace. Not them. Just remember that. They are just in the fortunate position that there is little like-for-like competition.
November 13, 2009 - 1:22 am
David,
What security does the seller need? They own the domain, and don’t have to transfer it until they are satisfied that payment is secure, so they have all the control in the transaction.
I think changing to upfront fees is a smart move for Flippa because these are fees they can actually collect, as opposed to just hoping that people pay the success fees. It’s also nice for buyers because they don’t have to worry about paying a fee on top of buying a website.
November 13, 2009 - 4:16 am
NY Themes,
I’m sorry, but your argument doesn’t make any sense.
The seller wouldn’t be paying $99 to avoid a $10 fee, they would be paying $99 to avoid up to a $498 fee. This option is for sites that will definitely sell for over $2000, not brand new template sites.
Also, where does it say anything about a $120 listing fee?
Obviously you are a seller of low cost sites, or are at least very concerned about their market, but this change has no impact on those listings at all, so I don’t understand why you are all worked up about it.
Take a look at the mid-range and high end listings. There are a number of auctions where there are multiple bids over $5000. Those are the sellers who would definitely think about paying an up front fee.
Personally, I would be happy to see Flippa raise the listing fee to $99 for all auctions to get rid of the template sites cluttering up the listings, because I don’t have any interest in them. Also, if someone is paying $99 for a listing, they probably have a site that they know will sell and will put some thought into the listing and their asking price.
The only reason it is better for Flippa is that they can actually collect this fee, rather than the success fee which is easy to ignore and even easier to avoid completely. They are trying to give up higher theoretical fees to collect lower actual fees. It might not work either, but it seems like a better option than trying to collect a $498 fee after the transaction has already been completed and the buyer and seller have no use for Flippa any longer. Also, they stated that their goal was to focus on selling more expensive sites when they started Flippa, and this is a step in that direction for them.
November 13, 2009 - 4:04 pm
I am a buyer. I do have a couple of sites I am thinking about selling, and this change will make me consider selling them on Flippa, rather than using a business broker or some other website. With the success fee, it wouldn’t even be an option to list the sites on Flippa.
I am sure regular sellers see things from a different perspective, but no matter how you use Flippa, it is clear that a lower total fee is a good thing for sellers and buyers, and that this fee is better for Flippa because it is one that they can actually collect. If it was a required fee, I can see the people who sell $100 sites being upset, but that isn’t the case.
November 14, 2009 - 3:24 am
The $99 is a non-refundable waiver on any potential 5% success fee.
You still have to pay the initial $19 listing fee.
November 14, 2009 - 3:25 am
Can you clarify why this change is making you change your mind?
It’s an entirely, 100% optional “waiver” that you can purchase. If you don’t think it’s a worthwhile upgrade, you can ignore it and proceed with the $19 listing + 5% success fee as usual.
November 14, 2009 - 3:51 am
To avoid any confusion, let me clarify that Benitez is definitely not an “insider” – he’s a user, just like you. Keep the opinions coming!
November 15, 2009 - 9:29 pm
Osho,
The way it works is that it’s $99 per listing to pay no success fee on the successful sale of that listing, so obviously it’s aimed at your higher-priced listings.
November 15, 2009 - 9:30 pm
Kazi,
I don’t think I understand. What’s a “JustBid option”?
November 16, 2009 - 1:50 am
Greg,
“My suggestion for Flippa is offer a flat rate (monthly or yearly) for the people who buy/sell lots of sites.”
This is definitely in the works. We hope to have fleshed out a feature of this kind not too long after Christmas.
November 16, 2009 - 4:21 am
It’s people like that who make the success fee pointless. Why should anyone pay it when there are tons of scammers out there who will just avoid it with a single email? I don’t want to be at a disadvantage just because I do business honestly.
November 16, 2009 - 4:44 am
Matt,
He’s probably talking about an auction where you buy bids, each bid on an auction raises the price of the item by some fixed amount (a penny in the case of Justbid), and the last bidder wins the item at a very low price.
I suppose you could change the format so you sell bids rather than trying to charge for a sale, but I can already come up with a number of issues that would arise. Other than that, the suggestion doesn’t make much sense to me, since clearly the website owner isn’t looking to sell at some huge discount. Justbid makes money by selling bids and having people place hundreds of bids on an item in hopes that they can get a laptop, TV, etc. for $10.
See http://www.justbid.ie/how-it-works for more information.
November 16, 2009 - 5:26 am
benitez17,
Thanks for the clarification. (Though actually I’m Dave, not Matt!)
We won’t be adding a JustBid option, based on the facts in the page you’ve linked to. We’re in the business of getting a price which is fair to both buyer and seller, not of running some sort of strange opaque lottery which could screw one or both out of their hard-earner cash.
Thanks!
November 16, 2009 - 11:48 am
Sorry Dave, I was reading a comment from Matt right before I replied to this one.
Hopefully the original commenter will come back and verify that he was talking about the setup I described, because the suggestion doesn’t seem to be very useful at Flippa, but I don’t know what else he could be talking about.
November 18, 2009 - 4:07 pm
All you cool cats sure are a feisty group – especially the Insider. I’m warning you right now, I’m New here so I just might be funny or maybe irritating and even offensive to some although I doubt it. I bet you all grew some thick skin a long time ago!
I saw that avoid the fee sign at the top and figured I should qualify since I want to TRADE Airline Tickets for a Website if anyone would
rather go on Vacation instead of getting cash you might not need anyway.
I was hoping the Insider could help steer me in the right direction since he sounds like he does know a lot about both buying and selling.
Like a Double Agent or Operative in the Spy movies!
Details are right here: http://www.ez1.webbizoffers.com/
The trip is for 1 or 2 people anywhere in the US or Canada OR for the next level Add Hawaii, Mexico and the Bahamas OR for the right website, how about a Trip to South America or Europe?
INSIDER: Don’t get your shorts all tied up in a knots… I was just kidding up there. I know you’re about as honest as they come just from your comments – Straight Shooter, is that better?
About the FEE – Why not just do what Real Estate Agents do? Split the fee 50%- 50% if you don’t like the other 2 options – and pay it in advance with any adjustments to be calculated at the end. Then everyone gets paid. Even Website Owners have bills to pay and food to buy. Share the Wealth and call it a fair and square day. The End.
November 18, 2009 - 4:41 pm
#17 and #18 are comments from just one poor lost soul and not two of them I hope.
It’s so sad to see people toss their character out with whatever Karma they may have had left.
Cosmic Justice never fails. Universal Law makes sure you receive exactly what you deserve. 8 websites and counting…I would NOT want to be YOU.
If you wouldn’t mind too much, can you come back here every year and tell us how things are going?
Nobody ever does because they don’t believe in Karma. I guess not. How could they?
November 18, 2009 - 10:33 pm
Ummm… if you don’t like the fee, you still have the option of 5% commission payable upon successful sale which you can pay yourself, split it with the buyer, or turn into a buyers premium.
November 21, 2009 - 10:07 pm
I think we can all agree this optional fee is put in place because I’m sure Flippa is having trouble collecting the $500 success fee on high-end sites. So they are willing to accept one fifth of it at the beginning. At least they get that.
Why don’t you think about setting the fee’s at the beginning of the listing according to the reserve price? You will always be paid in full, every time.
Low-End Reserve Listing Fee – $$ to $$$
Mid-Range Reserve Listing Fee – $$$ to $$$$
High-Range Reserve Listing Fee – $$$$ & up
Pro’s:
You will always get your fee paid up front.
The seller will be happy for what they get over their reserve. Happy sellers like to list more auctions.
New Buyers don’t have to be confused with the Success Fee. Their total is the amount of the winning bid or buy it now. Plainly shown at the end.
If a sellers reserve doesn’t get met, you just continue to offer the “make an offer” private sales and give them half off relisting it, just as you are doing now.
I really don’t see any cons to this method if you price the listing reserve cost in a fair manner. It is a win-win-win for everyone involved.
Why should a brand new turnkey website pay as much for listing as a high-end one of about $50,000 anyway?
You’ll still make money on the upgrades too, in advance.
I don’t see any con’s to this.
If someone does, please share why this wouldn’t work.
Thanks
November 22, 2009 - 1:50 am
JD, that is a great idea. It will prevent the listings with unreasonable reserve prices from ever showing up, the fees would be lower (at least given their current structure), and Flippa can collect their money without any problems.
The only people who would have a problem with the change are ones who don’t plan to pay the success fee anyway, and people who list the site without really planning to sell it.
November 21, 2009 - 10:19 pm
I agree, putting up “avoid the success fee completely” was done in a low-class manner. Like you are dealing with fools.
We sellers make this marketplace what it is and it is disrespecting to our intelligence to put some “hype” comment on the front page to get traffic over here.
If you are having trouble collecting your high success fee, come up with a real solution that really benefits others as well.
November 24, 2009 - 1:46 pm
The only problem with this analogy is that Flippa has actually GROWN the marketplace beyond what it was at Sitepoint. Things haven’t decreased.
I think (Dave or someone from Flippa correct me if I’m wrong) that only 25% of the sites over at Sitepoint actually sold. And the highest monthly volume they had over there was about a Million dollars per month in total transaction value.
I swear I just saw a post on this blog saying Flippa hit that milestone in a single week…
Flippa’s growing, and there really aren’t that many differences from when it was Sitepoint, other than it has some room of it’s own now and isn’t a sub part of another site.
November 24, 2009 - 2:43 pm
“Consider it a favor”
I’ll have a pint of what you’re drinking.
“Be patient guys…remember Flippa is only a few months old”
Right, probably working on the next favour they’re going to do us.
Aren’t they great guys..so generous, with never a thought of making any money from us, such a cute little business, you just want to run up to them and give them a big squashy hug!!
November 25, 2009 - 4:05 am
Brian, Flippa might only be a couple months old, but the Sitepoint Marketplace that it replaced was years old. They weren’t starting from scratch. They took a very successful and popular site and threw it away, and now they seem to be running Flippa like they have no experience running an auction site. I think that is what annoys the majority of people. If they were a startup site, people would be a little more accepting (or they just wouldn’t be using the site at all), but Flippa is a downgrade in many respects from a working marketplace that already existed and was taken away from its users.
That said, I don’t see what the problem is with eliminating the success fee either, but it’s not like Flippa’s staff has been making great decisions so far, so I think many people’s default reaction is to complain about any change that is made to the site, because they assume that it will make things worse.
Also, they have adamantly stated that they will not be offering any sort of escrow service at any point, so I don’t think that it is in the works.
November 25, 2009 - 4:26 am
yeah they should definitely eliminate the success fee. bentiez can you please also contact microsoft and ask them if they can make windows and office open source? while your giving business advice. i think google might also be interested to know that adwords shoudl be free.
November 25, 2009 - 11:07 pm
Gavin, do you have anything useful to add, or did you just comment to insult me?
The success fee is clearly not working out, or they wouldn’t be offering a way to avoid it. I don’t have a problem with Flippa making money, but if Microsoft raised their prices by 1000% and cut out features that worked in previous versions when they released a new version of a product, I assure you there would be a lot of complaints. Since you used Microsoft as an example, just look at the backlash caused with Vista, and that didn’t include a huge price increase.
If you can find any actual problem with what I said, I welcome your response.