Sometimes an afterthought purchase winds up being worth a tidy sum. That’s exactly what happened to Chris when he acquired Paid2Review.co.uk, a directory for paid surveys and cashback websites,  as part of a bigger website purchase.

“We bought a larger business based on the websites, database and income potential. Paid2Review was a bonus, really – we monetized the site better than the previous owners, and then realized the true value of the site”.

When selling just makes sense

This true value, coupled with new monetization methods, left Chris with a money-making site that didn’t require much effort. But after several months, the love just wasn’t there.

“We weren’t spending any time on the site at all. The SEO work was totally outsourced, so we thought we’d take it as far as we could go. To target more keywords would have taken a lot of work, and SEO wasn’t really our specialty, so we decided to sell the site and reinvest the profits into more of what we knew – CPA marketing.”

Chris, who has a business analysis background, knew his time and energy would be better spent on other projects. He had heard about Flippa from some of his colleagues, and decided to give it a shot.

A great first experience

“The sale process was incredible. We had loads of interest from all over the world, and I think the only difficulty was in keeping on top of the questions and correspondence with people, mainly due to time zones.”

Why was the listing for Paid2Review generating so much attention? Besides its enviable $5,800 monthly profit, the listing also included a lot of information potential bidders were interested in.

“I personally wouldn’t buy a website without seeing Google Analytics for it,” says Chris, “so for this listing, we included everything bidders needed to see. We even added the highest bidder’s affiliate codes to the site before completing the deal through Escrow, so they knew what they were buying before the sale went through.”

When the auction concluded, at $75,000 after 78 bids, Chris was satisfied. “The price we received for Paid2Review pretty much matched its true value, so we were happy with this. This was my first experience with Flippa, and I would recommend the service to anyone. I think as long as you know what to look our for when buying, and how to actually market a website when selling, it’s a great resource for anyone”

What’s next for Chris? This venture into buying and selling websites won’t be his last — in fact, his site DuvetDollars.com is on auction right now! “I’m working on some standalone projects and income streams, like 1kSystem.co.uk, including one I might sell on Flippa once it reaches $20k in monthly profit. It should be interesting to see how that goes.”

Have you had a similar experience in selling your website? Or do you have a question or comment about this sale? Let us know in the comments!

Image by jeremympiehler

Earlier this week we came across a great piece of analysis by Ron Jackson over at DNJournal. Ron took a deep dive into reported domain sales for 2011 and made interesting comparisons with 2010.

It led us to wonder about how Flippa website sales performed for the same period.

To make it comparable, we followed DNJournal’s lead and categorized websites into .coms, ccTLDs (eg .uk, .ca, .au), and non-.com gTLDs (eg .net, .org), and also excluded .com sales below $2,000 and other TLD sales below $1,000.

While this led to website transaction volumes clocking in at around 10% of the same volume in the domains data set, it uncovered some fascinating results.

Website dollar sales grew by over 50% while domains declined by 5%

The DNJournal records showed a 2% increase in total dollar volume in .com domain sales to reach $67.2 million for 2011 – unless we include the $13 million sale of Sex.com in 2010, which would mean domain sales volume dropped by 15%. Our records from the Flippa marketplace showed a staggering 57% increase in website sales volume to reach $15.5 million in .com websites sold for over $2,000.

While non-.com TLD domains suffered a decrease of 11% to sell just $10.2 million in 2011, their website equivalents increased by 63% to reach almost $3 million in sales volume. Websites with ccTLDs were again arguably too low in volume to provide much insight but did increased in total dollar volume by over 150%.

All of this goes some way to explain why Flippa’s total dollar transaction volume just shot past $70 million.

Websites held their value more than domains from 2010 to 2011

Median Sale prices declined marginally across the board. However, for .com domains, median prices declined by 14% to $3,000 while .com website median prices went down by just 3% to $4,350. For non-.com TLDs, stand-alone domains declined by 10% to $1,800 while their websites peers were selling only 5% lower at $2,000.

Websites with cc TLDs broke trend and were selling for a median price of $1,750 (down 8% on previous year) compared to just domains that clocked in at $2,000 (down 3% on previous year) – possibly due to the very low transaction volume for this category of websites.

Note that both the DNJournal figures as well as our own are but a subset of total transactions in the respective domain and website marketplaces – but ultimately enough to give you an idea on overall market trends.

Any views on what drove these shifts from 2010 to 2011? What does it mean for 2012? Let us know in the comments below.

Image: polarjez

When we got rid of the New or Established distinction a few months ago, we also noticed that more and more buyers are using the Date Established metric to separate new sites from old.

Just a minute, though – how are sellers defining the date on which their site was established? Is it the day the domain was purchased? The first week the site had content? The first month when the site generated revenue?

Until now, this has all been up to the seller to decide. Today we’re introducing new guidelines for claiming site age to make it more consistent:

Claims regarding site established date refers to the most recent point in time that the website, in its current form, went live. If the site was ever offline for more than 14 days, was previously redirecting, or if the site switched to a different niche, then the Site Established Date is from this more recent point in time. Changes in monetization method or underlying technology do not necessarily mean a new site established date. If the site was established on a different URL in the last 12 months, the original site established date can only be used when the original URL is included in the sale.

That’s a big block of text. Let’s go through it line-by-line, shall we?

Claims regarding site established date refers to the most recent point in time that the website, in its current form, went live.

If your site had a previous life under a different form, whether or not the site changed hands, you cannot claim the original live date as the Date Established.

If the site was ever offline for more than 14 days, was previously redirecting, or if the site switched to a different niche, then the Site Established Date is from this more recent point in time

Taking your site down for up to 14 days (for maintenance, hosting changeover or other reasons) won’t change your site’s Date Established. Any longer than that, and we’ll consider it a new site. Same thing happens if your site’s focus changes from one topic/niche to another.

Changes in monetization method or underlying technology do not necessarily mean a new site established date.

Adding ads, affiliate links or a subscription service doesn’t make your site brand-new, nor does moving from one CMS to another. If you change monetization methods or CMS as well as take your site down for more than 14 days or change the niche, that makes it new.

If the site was established on a different URL in the last 12 months, the original site established date can only be used when the original URL is included in the sale.

Let’s say you own a site called AwesomeExample.com, which generates great content. Someone offers to buy your domain name, as they want to use it for their new project. You sell the domain, and migrate your content over to BetterExample.com. While the content might be the same, the Date Established for this site would be the day you migrated to a new domain.

Now let’s say you own NotVeryGoodExample.com, and you migrate your site over to GreatExample.com. If you were to sell this site on Flippa, you could claim the original Date Established, as long as you sold both domains along with the site.

A note for buyers

No matter what the seller claims as the Date Established, it’s always a good idea to go digging through the Internet Archive at wayback.archive.org to see what the site looked like in previous years (eg AltaVista back in 1999).

What do you think of our new guidelines for defining site age? Are they similar to the guidelines  you already used? Let us know in the comments!

You may have noticed that our logo went black in support of the protest against the anti-piracy bills – bills which have serious concerns for anyone owning, creating, buying or selling websites. This is part of the tremendous effort around the web for 18 January.

You can join the biggest online protest in history at http://sopastrike.com/strike

Been hiding under a rock and think SOPA is just a typo? Watch this video. This is important information.

PROTECT IP / SOPA Breaks The Internet from Fight for the Future on Vimeo.

So you’ve just bought a website, and decided to transfer your new site to a different hosting company. The process of taking ownership of a site and transferring from one host to another can be daunting, but it’s a valuable experience and often a good idea.

We spotted a fantastic how-to on the transfer process by Clinton over at experienced-people.co.uk, and are re-publishing parts of it with his permission.

Pssst! There’s also a great discussion at the above link about deciding whether or not to transfer your site .

Step 1: Transfer of the domain name to the control of the new owner.

Contact your registrar and the site’s old registrar for details. Broadly, this is what you do:

1. The buyer starts the process with the “gaining” registrar following their instruction.
2. The gaining registrar sends an email to the administrative contact listed in the WHOIS.
3. If the contact replies within the time limit, the gaining registrar sends a request to the registry (the controlling body that oversees registrars). The registry sends an email to the losing registrar.
4. The losing registrar now sends an email to the administrative contact.
5. Provided the contact approves, the losing registrar releases the domain to the gaining registrar.

Step 2: Getting/downloading all the site’s files and folders in the correct structure.

Getting a copy of the applications (if any), database/s (if any), and non-publicly viewable configuration files such as the “.htaccess”. Getting manuals, lists, instructions and passwords from the previous owner. You want to prepare a list of questions for him. I quote a small sample here:

1. What’s required of the hosting? For example,

• What OS (Apache/Windows) is needed?
• What bandwidth and storage allowance do I need?
• What size of database is required?
• Do I need access to set cron jobs or change conf files?
• Do I need access to set size of the log files and rotation parameters?
• Do I need to change default SSI extension names from shtml to something else?
• Do I need Frontpage extensions on the server?
• Do I need a dedicated IP?

2. What affiliate or other codes do I need to change? Adsense publisher IDs and other affiliate codes will eventually need to be changed to your own publisher ID/account number.

3. What about order processing and payment facilities? If these facilities are not transferring with the site, do I have something else in place?

4. What’s needed to transfer the mailing list?

5. What software licenses do I need?

6. If the site has affiliates, how are they managed? If it’s a third party application then can control be handed over to you or will you lose all the affiliates?

7. What about agreements with merchants or drop-shippers? Will they transfer their agreements to me?

8. How do I backup the site?

Step 3: Uploading all the files, databases etc., to the new hosting company’s server. 

These need to be placed in the right location following the instructions provided by the host (and doing all this while the site is still fully operational at the “old” location).

Step 4: Making the changes to take control.

These fall into three areas – management, technical and financial.

1. Management

• Create email addresses for all the emails that are in use at this domain.
• Change the code for any free statistics such as Google Analytics.
• Transfer control of the mailing list
• Transfer control/ownership of software licenses
• Sort out the agreements with merchants or drop-shippers
• Offsite changes: If the seller referred to his product on his various web 2.0 profiles pages and other pages or sites he controls has he updated the references?

2. Technical

• If it’s a dedicated server, you may have to set a service plan, allocate space and resources, create users etc.
• You may need to modify file or folder permissions: CHMOD
• You may need to edit files that access the database
• You may need to double check what’s in the htaccess file to ensure it does what you expect it to do
• You need to double-check all forms, feedback and comment functions to verify the destination
• You may need to setup cron jobs
• You may need to install scripts
• You may need to edit conf files
• Use Google Webmaster Tools and carefully go through all the options. There may be unseen problems on the old site that you can now rectify on the new server.

3. Financial

• AdSense or other affiliate codes need to be changed to your own publisher ID/account number.
• Advertisers, link-buyers etc., paying members, paying subscribers etc., need to know the new contact address. If they are paying by PayPal subscription or some other regular automated payment, that needs to change so you receive the funds.
• Payments-out need to be similarly altered to avoid a situation where your valued partners (such as affiliates) don’t get paid on time and withdraw their support.

Step 5: Changing the DNS settings at the domain registrar to point to the new hosting company thus allowing visitors to reach the new location of the site.

Have you used a different process when transferring a new website purchase to a different host? Do you have any other steps to suggest? Let us know in the comments!

Welcome to 2012, Flippa blog readers!

Today’s post is all about the Secret Seven. No, not the children’s detective books written in the 1950s  – Flippa’s Secret Seven are useful Flippa tools that, for one reason or another, are often overlooked.

Let’s jump right in, shall we?

1. Advanced Search.
Our Advanced Search lets you refine your search to find websites you’ll be interested in. You can choose to only search for auctions for which the reserve price has already been met, sites that make a certain minimum amount of profit or revenue per month, or sites that are more than a certain number of months old. And you can always add a keyword or two to further refine your search.

It can be time-consuming to refine a search, especially one you use often. That’s why you can also…

2. Save your search.
Want to start off your day with a list of website auctions you might be interested in?  You can subscribe to the RSS feed for a custom search, or receive new results by email.

3. Ignore listings by a user.
It’s nothing personal, but sometimes you’re simply not interested in what one particular seller has to offer. To remove their listings from your search results, select the “Hide listings by this user”. And just like that, their listings will disappear from your view. It’s just like magic!

4. Tags: not just for Facebook pictures.
Our Browse page lets you navigate through dozens of niche tags, site types, implementation types and monetization methods. Want to watch all auctions tagged with “World of Warcraft”? You can do so right here. You can also see how many people are watching a particular tag – in the case of WoW, that’s currently two people.

5. Last-minute reserve lowering.
Here’s one for sellers: if your auction isn’t progressing as quickly as you’d like, or if you have re-thought your reserve price, you can lower your reserve to meet the highest unapproved bid. Just choose that option when approving a bid. Another good reason to manually approve bids.

6. Global keyword search
You can do a keyword search from almost any page on Flippa. With some simple modifiers, that search becomes advanced:

- Use “+” or “-“ to include/exclude a keyword. You can use AND/OR operators too.
- Use “URL:” to only search across the website’s domain or use “TLD:” to only search across the Top Level Domain (eg “tld:.co.uk”)
- Use “Title:” to only search across the listing title or use “Description:” to only search across website description
- Use “Niche:”, “sitetype:”, “monetization:”, and/or “implementation:” to search across these listing tags
-Use “username:” to search for listings belonging to a specific Flippa seller

7. Start your Due Diligence on the right foot.
Due diligence is one of the most important parts of the buying process. To help buyers begin their due diligence research, each Flippa listing has extended details from Google, Alexa, Copyscape, and from the Wayback Machine. Remember, though, that’s just the first of many things you should check out when looking at a potential purchase.

That wraps up our list of seven new ways to use Flippa. Have you found other useful but little-known tools on Flippa? Share them in the comments!

With only a few days left in 2011, we’re taking the time today to do a quick review on your year, and to ask you about your Flippa highlights of the last 12 months.

Before we take a few days of rest to enjoy some barbecue on the beach (we are, after all, an Australia-based company), let’s take a look at some numbers, shall we?

First things first.

There were 26,213 website and domain sales on Flippa.com this year, totalling just over $31 million.

If we break that down a little more, that’s 659 sales over $5,000 and 205 sales over $20,000.

Just under 290,000 bids were placed on Flippa auctions in 2011.

You guys.

We had 2,147,000 unique visitors over the year – that’s about the same as the population of Houston, Texas, but with way fewer cowboy boots.

These visitors came from all over the world, but were overwhelmingly from just four countries: the United States, the United Kingdom, Canada, and Australia.

We welcomed 72,937 new Flippa users this year. Welcome, guys!

We also banned 2442 users for spamming, attempting to scam or for other dodgy behavior. Good riddance!

Let’s talk.

You’re a chatty bunch! There were 127,116 comments on listings, and more than 650,000 private messages linked to auctions or private sales. And that’s not even counting the discussions about Flippa on outside forums and right here on the blog!

Our users aren’t the only ones talking: several high-profile listings received publicity from the media this year. Among them, the Australian Apple fansite MacTalk, Twitter app Qwitter, and news site Inquisitr.

High-end

We also had a number of high-end sales this year, including MakeCashTakingSurveys.biz just recently, which sold for $395,000. PristinePlanet, a comparison shopping site for ecological products, sold for $165,000. And PitchingMachinesNow sold for $149,000 – you can read all about that sale in one of our case studies.

Looking back… and looking forward.

Without going too far into cliché territory, we can safely say that it’s been another great year here at Flippa.

We couldn’t have done it without our dedicated support and development teams here at Flippa. Thanks guys!

But we’re keeping the biggest thanks of all for members of the Flippa community. We literally couldn’t have gotten through the year without our active buyers and sellers.

Happy holidays to each and every one of you. Now let’s make 2012 even better than last year!

What were your website buying and selling highlights of 2011? What are you looking forward to for 2012? Let us know in the comments!

Image by  puliarfanita

Every now and then we get a chance to step out of the auctions and do a deep-dive on some of the incredible website transaction data we’ve gathered over the years.

We did this some time ago when we looked at the influence of domains on a website’s value. For this installment of the State of the Website Economy, we’re looking at Investment Multiples – how many years’ or months’ worth of revenue buyers are paying for websites.

A few interesting learnings came out of this.

Firstly, different niches attract different multiples. That stands to reason, but what surprised us is that website buyers are typically happy to pay a higher multiple for Sport or Health related sites than for sites relating to Internet Marketing and Shopping.
Secondly, and this may be why the Shopping niche fares so poorly, the monetization method also influences revenue multiples. We’re seeing sites with ad-based or affiliate revenues typically go for more than double their peers relying on ecommerce revenue. Buyers possibly favor more passive revenue streams rather than investments that require the inventory and order management of online shopping – great news if you’re a buyer looking for an ecommerce website.

Finally, for comparison’s sake, we had a look at how much money $1,000 would make if they bought a NASDAQ-listed company versus a website on Flippa. To be fair, the accounting here is not entirely a like-for-like comparison – listed companies tend to be subject to robust auditing practices whereas websites on Flippa are based entirely on seller claims. It does, however, make for an interesting contrast (unless you have stocks in LinkedIn!).

For this analysis, we used the seller-specified niche and monetization method – manually mapped when required. We limited this to sites that were claiming over $100 per month in revenue, sold for over $5,000 and ignored auctions with a low number of bids.

What Explains These Multiples?

These revenue multiples are averages based on websites sold in specific niches and using varying monetization methods. While this can result in highly variable multiples, the general rule is that they tend to reflect where prospective buyers expect to see the revenue trend go. We naturally pay more for websites when we expect the revenue to increase in the long term (though the multiple for AOL may contradict this!). Likewise, we pay less for websites when we expect revenue to decrease. No surprises there.

As a result, a website with modest revenue but strong traffic from a range of sources, quality content, a strong backlink profile, and in a potentially lucrative niche such as sport will typically go for a higher multiple, especially when contrasted against a website earning the same revenue but from lower traffic, with lower quality or duplicate content relying on a suspicious backlink profile and in an arguably crowded niche such as Internet Marketing. The long-term prospects for revenue prospects are very different in these two cases.

It may be interesting to see how these trends across niches and monetization will change over time.

What sorts of multiples do you use when placing a bid or pricing your own website? What factors outside of revenue come into play? Let us know in the comments below.

Yesterday we wrote about 6 possible warning signs to watch out for in an website auction. Today we’re finishing off our Top-12 list, and asking which ones ring the loudest alarm for you.

7. The seller is deleting many questions or comments from their listing. Now, there’s nothing wrong with a seller deleting spam or aggressive comments. Those can distract from a legitimate listing. The trouble comes when a seller frequently deletes legitimate questions or comments from potential buyers. Keep a close eye on these listings in order to catch whether the seller is a victim of trolls, or whether they are trying to hide something.

8. The site description focuses largely on what the site could be, and not on what it currently is. Potential is often not enough to justify buying a site. If the potential here is so great, why isn’t the seller taking advantage of it? Does the seller mention his reasons for putting this site up for sale?

9. The seller’s profile page indicates they have sold a number of similar sites already. Are they just really big fans of a particular niche, or are they pumping out similar, low-value sites at a rapid rate? You may end up competing with the seller’s other buyers.

10. The listing’s Copyscape score on the listing shows multiple copies.  It pays off to go through the Copyscape statistics for listings: legal Terms and Conditions can look very similar from one site to another, but other material should be original if the content is promoted as unique.

11. The seller has provided traffic stats, but the sources are suspicious, indicating possible Pay-Per-View (PPV) traffic. How can you tell? As we outlined in April, a high proportion of new visitors, “direct” traffic as the main source and low pages per visit and time spent on the site all point to possible PPV traffic. Don’t count on purchased traffic still visiting the site once it’s handed off to a new owner.

12. The seller isn’t responding to public or private messages. They could be sick. They could have decided to hold their auction during a weeklong holiday on a remote tropical island. Chances are, though, if the seller isn’t responding to inquiries or comments, they won’t be particularly helpful once someone purchases their site.

Did we miss your biggest eyebrow-raiser auction move? Share it in the comments, and this might just turn into a three-part series…

First-time buyer? Long-time website purchaser? Either way, seller and website due diligence is incredibly important. As the saying goes, “knowledge is power”.  In this two-part series, we’ll be ringing twelve alarm bells that you can use when deciding which websites of worthy of your bid.

Stay tuned, kids, there will be a second part and a quiz about this tomorrow. Well, not so much a quiz as a multiple-choice poll.

1. Serious Traffic and Revenue statistics on a relatively new website. Rapid growth is great, but too-rapid growth can be the first tip-off that something may be wrong. Did the current owner use paid traffic to their site in order to pump up their statistics? Will the number of visits stay high over the next few months?

2. The seller’s profile page indicates they have logged in to Flippa several times from different countries in a short time, or via proxy. Do we have a bias against world travelers? Nope. The concern here is that sellers who log in via proxy may be very difficult to track after a sale, and may be trying to hide their true location.

3. The bid history on the auction indicates possible shill bidding. How can you tell if you’re looking at a possible case of shill bidding? Its difficult to track but frequent bids from one account, going just over the previous bid, can be an indication – especially when it stops just below the reserve. Note that Flippa will flag when there is strong evidence that the seller’s account and bidder’s account may be linked.

4. The Seller’s profile page indicates possible links with banned or suspended accounts on Flippa. They could have perfectly legitimate reasons for being associated with those other accounts. It’s possibly worth contacting them to find out..

5. Google Analytics is installed, but there are no verified Analytics stats. Having Analytics installed isn’t enough to build trust – most sellers are happy to back up their traffic claims with Analytics data. You can otherwise ask for read-only or guest access to their Analytics account.

6. The seller claims that the site is established, but the Time Machine link on the Due Diligence page shows that the domain has been dropped, or was dormant for long stretches of time. It may lose backlinks and Page Rank scores over time. Flippa removed the New versus Established split on auctions in November because it was largely arbitrary – buyers should always look into the seller’s claims before they make a purchase.

Have you experienced any of these? Want to guess what 6 alarms we’ll be writing about tomorrow? Let us know in the comments!