Dont Use Flippa Until You Read This…Warning

Last Updated August 2012

Since Prosperly’s inception, I have been a proponent of Flippa, formerly Sitepoint Marketplace. Flippa is the main website where people go to buy and sell websites. Whenever I have sold websites in the past I have always dealt directly with the buyer and never used Flippa to sell before. I finally decided to try them out in selling a website to see how it would turn out for me. That is when I realized they have many flaws I couldn’t overlook.

Let me just say that I think you can use Flippa to find websites to buy if you know how to filter through all of the garbage.

Before I go into those flaws let me just report that I did reach an agreement on a purchase price for the site only to have to deal fall through over the next several weeks.

1. Buyers on Flippa expect to get a steal on a website. The seemingly going rate on the site is 10 months of net revenue. I’m not sure where or how this came to be but in the real business world that ratio is laughable. Most businesses sell for 2-3 years net revenue. I sold a website last year for a 7 year net revenue. Why 10 months? Because you don’t want to have to pay for a business what it is worth?

I think the main problem is sellers are putting their site out on display showing everyone exactly how your website makes money and exactly how much money you’re making. This is a problem because in the internet world the barrier to entry is almost non-existent. Any Joe Shmoe can buy a domain for $8, then go get a free WordPress template and be up and running in 10 minutes. Their thought process is since it is so easy why should they pay a 2 year multiple for a website. Inevitably most people that start these quick websites never achieve the traffic nor the money that the site for sell is doing but it just creates a problem where the market of buyers at a real business price is not there.

2. The fee structure gets you on the front end and back end. One of the problems I had with Flippa was the bookend fees they charged. They charge you to list your site for sale with all kinds of listing upgrades. You can easily end up spending $40-$50 to list your site for sale. I have no problem with them doing this. It is normal for businesses to charge listing fees.

On top of the listing fee is the purchase price fee. I can’t remember what that percentage is (I want to say 5%) but they cap you out at $499. That is where my site fell, the $499 cap. So I had to pay $40-$50 to list and then they wanted me to pay $499 once the deal had gone through. I agreed to this reluctantly because I knew Flippa could provide me with an audience. I just think you should make it one or the other. Charge me a listing fee, charge me a final sale fee, but don’t be greedy and charge me both.

Warning About Some Buyers On Flippa

3. Beware of buyers on flippa that bid on your auction and then never pay. After I reached the agreement with the buyer he kept assuring me that he was going to pay me for the site. Since I had never sold on Flippa before I had no reason to question him. He kept asking for more time.

Meanwhile Flippa was emailing me asking for me to pay the success fee and letting me know that if the buyer had backed out I could file a dispute. I didn’t file the dispute because the buyer kept saying he was going to pay me. Now to their credit they did give me several reminders to file a dispute but the timing just didnt work out for me.

So Flippa assumed that I had sold the site and wanted the success fee. They told me they would suspend my account if I didn’t pay, which eventually happened because I didn’t receive any money and therefore wouldn’t pay the success fee. Seems like a simple Whois lookup could have solved the problem. As long as you file a dispute in time you shouldn’t have any problem.

If the buyer drags you on for more than 2 weeks just file a dispute. It is not worth the hassle of being lead on forever just to not get paid.

A previous version of this post indicated that Flippa charges a success fee on when a sale falls through. Flippa does not charge the success fee in this case.

Flippa Alternative

If you want to find out where I go to find websites to buy click here.

So where do we go to find good buyers of websites. I have a few suggestions.

The first Flippa alternative I would suggest when you are looking to sell a site is to contact your competitors. Remember, your competition is not your enemy. They can be some of your most valuable assets. If one of my competitors contacted me about buying their site I would be very interested. I have even tried to buy out my competition before.

Another option is to go directly to a business broker. I would only do this if your website is making over $3k a month. Their fees are high but they will also get you top dollar for your business.

The best option is to wait for someone to come to you. If you build an awesome website with great SEO rankings it won’t be long before people are contacting you about buying your site. This puts you in the driver seat. For example, on the site I sold for the 7 year multiple I had already received an offer for just over a 1 year multiple. The amount didn’t excite me so I passed. I fixed up the site more and got even higher rankings and then sold it for the 7 years of net revenue. That did excite me.

I know that none of these are real alternatives of flippa because they are not marketplaces. I am going to find a good one. This industry deserves something better.

Update March 28, 2012

So I had another flippa account that I had been using long before this ever happened. I recently logged in with it to check a private auction that was happening. About a week ago they contacted me and notified me that they are shutting that account down too because it was a duplicate of my suspended account. I laughed because I hadn’t used that account since they were Sitepoint but I just thought it was interesting that they would come after that account too 2 years later.

As I have thought more about trying to buy websites on Flippa I decided to pay them the $249 success fee from 2 years earlier.

When I went to pay I emailed them and asked them to confirm that I would get the refund of the $249 in flippa credits. This was their response:

As you did not enter the Formal Dispute Procedure, we have no way of verifying that the site transfer did occur after the Sales Completion Date. If you had entered the Dispute Procedure, we would have been able to waive / credit your success fees and allow you to relist the item for free. Now that over a year has passed, we are not able to offer you a credit.
The Suspension has been removed from both of your accounts.

Please let us know if you need further information or assistance.

Kind Regards,

Flippa Customer Support.

But my account is in good standing again so that is good.

Update June 7, 2012 – They Paid Me Back!

I just wanted to give a quick update. This post has gotten a lot of exposure both in the search engines and also in forums as well. Well it finally got the upper management at flippa’s attention. Of course they contacted me and told me that I never should have had to pay the fee for the failed listing and that they have all of these new policies in place to ensure that doesn’t happen anymore. Then they gave me my money back.

How do I feel about all of this? I appreciate that they swallowed their pride and gave me my money back but there is just this prideful part of me that can’t help but think that I got a refund because I am causing them a lot of negative publicity. If this was a true gesture of caring for their customers then good on them. I guess I will give them the benefit of the doubt.

Posted in Buying Websites, Featured, Flipping Websites, selling websites
50 comments on “Dont Use Flippa Until You Read This…Warning
  1. Jeremy Blake says:

    Good stuff to know. Thanks for the post on flippa.

  2. Adam:

    I’ve been selling sites on and off since 2007.

    I agree with your recommendation of the Experienced People forum. Clinton is a good guy and the people over there are definitely “experienced” Internet Marketers and online business people in general.

    Travis

  3. Many eBay sellers feel that eBay is terrible. We still find it a good place to sell because we are careful (clear policy and payment options), but the traffic is too good to ignore. Flippa seems like a terrible seller’s experience, regardless of traffic.

    So I have to ask, what about using Flippa as a buyer? I haven’t purchased anything, but I wonder if they are just as bad from a buyer’s point of view.

  4. Clinton says:

    Hi Adam,

    Great post!

    Thanks for mentioning my experienced-people.net forums. If you’re interested in how the name came about, it’s because I already owned the co.uk version of that name and had spent a lot of time building site buying/selling articles and guides on there similar to the excellent material you have on this site. My two are “sister sites” if you like. And I didn’t choose the original name either. It just happened to be one I had in my portfolio which already had a DMOZ entry at that time! I know, I know, as reasons go that’s pretty lame :)

    About Flippa: you are perfectly correct, there’s a major flaw in the system in that any competitor can scupper your sale by making the highest bid and then refusing to pay. Non-paying bidders are endemic in Flippa and it’s a problem I predicted when Flippa moved over to a charging model that involved a “success fee” component.

    Flippa has now done a deal with escrow.com which would give them the ability to track transactions that proceed to completion. The idea may have been so they know when an apparently successful sale results in a site changing hands. However, that only applies if the escrow.com transaction is initiated at Flippa. Many transactions are done directly at escrow.com, other escrow companies or with bypassing escrow services altogether. So Flippa has no way of knowing just how big the non-paying buyer problem is. It’s not fair that they expect/demand the success fee when the site has clearly not sold.

    I agree with you that the better sites should skip Flippa altogether. You’ve offered some good alternatives. Brokers, competitors etc are worth approaching, as you’ve said. If the site’s a forum there are sometimes forum members who are interested. Vendors/merchants are often very keen to mop up the sites of successful affiliates. There are also the business listing sites such as businessesforsale, bizquest etc., many of which now have dedicated sections for internet businesses. Some members at my forum are keen buyers too as you’ve observed.

  5. BTW, big congrats on your new baby girl Adam! I challenge you to make her first word “prosperly”. :-)

  6. Adam says:

    Christian, I would rather her first word be Daddy! :-)

  7. Clinton says:

    Hey, Adam, I hadn’t heard the good news. A very hearty congratulations to you and the proud mum.

  8. Hi Adam,

    My firm SearchForecast has been buying & selling real website businesses for many years and we’ve always completed the transactions offline. Our sales run into 7 figure websites. We know the problem you are describing too well so thanks for sharing that in the public.

    We represent Nasdaq companies and other large US adnetworks actively buying domains. Our clients buy 20-30 websites a month.

    Many of our buyers and sellers meet at our very own Conference (sponsored by Google, AOL, eBay, etc). We find it ESSENTIAL to have the offline meeting of buyers and sellers to ensure there is trust and so the dummy bidders and non-payers are weeded out in the transaction process.

    We began recently listing our online listing marketplace – http://marketplace.searchforecast.com as many AdSense Publishers from our AdSense Directory have been requesting we help them sell their websites.

    I really like your point about the listing fee. We always waive the $29 listing fee) by allowing folks to use the promo code 2740835. We leave it up so to avoid scammers. We also delete lots of irrelevant listings. We also negotiate the 10% success fee down to a point that is a fixed price but work with our clients offline to help find a great buyer for them.

    We also ONLY take the success fee if we sell the domain and the money clears. That is how boutique merchant/investment banks and Private Equity works as well. So we have this model which I think is much more sustainable.

    I agree the WordPress start up webmaster is deluded to think his site is worth anything. As we have hundreds of clients and a management team that is very experienced, we find many of the folks selling domains are not knowledgable about the internet really or their websites. We give them a lot of advice NOT to sell their website and grow it before they max out the capital gain. This is the theme of our CRS Conference.

    It would be great to talk with you so please ping me at my email address.

    Thanks,
    Marc

  9. thanks, I had no Idea about the site experienced people.

    But you are right about flippa. They simply just have too much junk for me. Then again i’m not in the business of buying and selling websites to say.

  10. Clinton says:

    I recommend people keep an eye on what Marc Phillips is up to. It’s a new marketplace and focused just on websites monetised with Adsense, but it has the potential to follow an interesting trajectory.

    I’m on his SearchForecast advisory board contributing (hopefully) to the next CRS conference. We’re also currently working on drafting some very interesting stuff that many marketplaces may find useful.

    Adam, getting any sleep lately? :)

  11. Woody says:

    Useful stuff dude, will check out experienced people. The flipside of course of flippa is that you do occasionally get people that just need to get rid of a site – because its big these quick sale people do tend to get drawn to it (I brought one recently where they had lost their affiliate status but I had mine in tact so they wanted a quick sale and I benefited) – but on the whole it can be a timesink filtering out the crap on there.

  12. geek says:

    Yes you are right about Flippa. Most of the times the buyers do not pay and the seller still needs to pay the success fee.

  13. John says:

    I have also been a victim of the unfair flippa marketplace rules. Now I use Eflipp.com and websitebroker.com No success fees whatsoever to be worried about.

  14. John says:

    Owners at Flippa got very greedy and dont be surprised when they come up withs omething else to squeeze even more out of your pocket. I now use websitebroker.com and eflipp.com to avoid such ridiculous success fees.

  15. Anon says:

    I would say that 7 years is a bit high. Things on the internet change fast a successful website can easily die off if not maintained properly. 1 to 1.5 years is reasonable.

  16. boni says:

    this company have no customer services what so ever… and they rip off so many user worldwide… they charge you to place your ad with them(fine), and when you like to remove your ad from their site, they ask you pay again to remove it(funny), this is simple rip off. they not under the BBB in the USA so they don’t care, if we all compliant in the BBB USA law they will be closed this site long time ago; Here what Flippa customer services reply to me when I ask to remove my listing: timatflippa, Sep-17 01:57 pm (EST): Under no circumstance will the listing be removed unless you involved your federal law enforcement who then start dealing with the Australian Federal Police. You are welcome to up the privacy setting on the listing at a price but the listing isn’t going anywhere. Flippa Customer Support.

  17. Technomela says:

    I have pretty new website which I had started in the month of Sept which is presently at PR 1 do you suggest for me to wait before I sell it or list it now and wait for buyers. It has about 500 unique visitors presently to the website.

  18. Adam says:

    I always suggest selling your website when it is at its peak. That way you make the most money.

  19. Make Passive Income says:

    Wow, I had no idea that Flippa could be that shady. So did they end up suspending your account or trying to collect in anyway?

    Thanks for sharing your experience on this. Not sure if it is typical. But, it is definitely something to consider. I will check out the other sites you mentioned.

  20. Gary says:

    I have been working on a site for a year which is coming up first in the uk for terms such “cctv installers” and is pr3. Obviously this is quite specialised and my market should I sell it is limited. Is there any advice you could give me on that or how to best monetise it ?

  21. Board Games says:

    I keep hearing of Flippa doing bad things like this. They are desperate for money though after having hundreds of thousands of dollars of investment moolah.

  22. Steve says:

    Well ebay is getting to shady also, you can’t even put the domain name (clickable or non clickable) in your auction now so how are you supposed to sell the site? Flippa is now getting shady also with all their “Banned” members, go take a look. There is a new site that just opened its doors yesterday called Value flipper that looks interesting and sellings is way cheap..
    Thx

  23. Not Happy W/Flippa says:

    I also had a bad experience with Flippa. I posted my domain name for sale at a cost of $19.00 (their Fee)

    My domain name sold for $15

    Now they want another $5 from me for a sales fee. Hey I could deal with paying an additional 5% that sucks, but it’s fair. BUT ANOTHER $5 for a $15 sale??? THAT’s 33.333%

    I’ll never go back!

    Time for a good alternative to come out.

  24. Adam says:

    If the UK is anything like the US alarm companies would jump at the chance to pay you a commission for any referrals you sent to them. That would be my first option to monetize.

  25. Hansel says:

    Hi,I would like to sell 2-3 sites.
    I would like to contact direct people/brokers if anybody know them.
    Please give me their contact details so we can discuss more in detail.
    Thanks and Regards,
    Hansel
    Skype : hansal-sdl

  26. Adam says:

    Make Passive Income, Oh yeah they suspended my account and I just got an email from them today suspending my older personal account I have had from back when I used sitepoint. Not that I even need the account but these guys are just crazy. I think they believe they own the website marketplace world.

  27. flipai says:

    you can try this, 100% free Flippa alternative for you to sell or buy websites, flipai(dot)com

  28. flippascam says:

    Flippa.com Flippa.com Pty Ltd fraud, scam and rip off company from Melbourne, Australia Internet

    someone need to make sure to stop this fraud company, I google their name and find so many rip off and scam they running, too bad I did not know upfront.

    I lost $19, but I can see many other got much more.

    lets stop this scam company and keep report and and more so we can closed this scam

    I can see they place fake bid, no help, no customer report, nothing just rip up client with their money

  29. Bryan Wynnert says:

    I have been selling websites for sometime now and found that flippas days are over.

    I have been offering my sites on auction sites like websiteshape There I have sold 3 websites in 4 weeks and there are no fees to be paid so the seller keep all the money.

    It’s like other peoples here are saying. Time to use other websites than flippa…

  30. Skipjack says:

    This thread has been very informative, thanks. I am a buyer looking for a relatively hands off site or two. To the sellers, please try me directly if we might strike a mutually agreeable and quick deal.

    Thanks,
    Skipjack

  31. Wonay Charles says:

    Flippa.com are frauds and run by 2 frauds.

    Having successfully dealt with them over the last few months I can vouch that Flippa is absolutely the worst business online.

    Flippa are cheats, liars and the scum of the internet. This review is based on my research on them for 2 clients.

    Simply type “flippa scams” or “flippa complaints” online to get the real scoop on these monsters.

  32. ann says:

    I have a great niche site with a great domain name that is aged and gets 100% organic traffic with first page positioning for all major keywords on Google and the others. After 8 years, I want to get involved with a different business and haven’t been doing much with this site for over a year. As a result, I don’t have very good financials except for a few years back. Should I try to sell the site as a “business” or just sell the domain and capitalize on the search engine rankings for a quick sale? Any advice would be appreciated.

  33. Adam says:

    Ann, you are definitely better off selling the site as a whole than just the domain. You will almost always get more money that way.

  34. Frank says:

    Flippa has ripped me off for more than $4500 on 2 auctions now :( here is what happened and why i recommend you do not use flippa as they can do the exact same thing to you :(

    I listed 2 websites for sale and bought as much features and premium auction upgrades a possible for these 2 auctions. They were 20 day auctions and getting lots of bids both sites were over the 20k mark in bidding.

    Then all of a sudden when there was 1 day left on both auctions flippa decides to suspend my auctions as well as my flippa account for deleting a spam comment on only one of my auctions?? Thats right people i deleted a spam comment on one of my auctions and flippa suspended both my auctions and my account :( how can they do that?

    Since then they have not un suspended my auctions or account and they have not refunded the $4500 i spent total on both auctions.

    I am currently getting my lawyer involved as they have ruined my auctions plus ripped me off for more than $4500 and over 1 months time now.

    WATCH OUT PEOPLE FLIPPA REALLY HAS A VERY VERY DARK SIDE!

    They will rip off people and not refund there money!

    BEWARE I have lost $4500 from flippa ripping me off so what is to say they wont get greedy and suspend your auction as well with no refund offered? Cause they probably will at some point :(

    My lawyer is helping me get my money back from flippa but it should not have to go to this point. Flippa should do the reasonable and business like thing and refund my money but they refused and were very rude to my emails and support questions :(

    Flippa is one of the worst managed companies i have ever seen and is illegal in more than a dozen ways.

    I am working hard with my lawyer to have flippa shut down for good. Flippa messed up with the wrong person you see i dont really care about my $4500 i am a millionaire and have more than 25+ established online trademarked businesses that make 20k plus per month each. So i know how a real and legit business should run and they always refund there customers and members if they request it. It is the legal thing to do.

    Now i will be opening several lawsuits against flippa as well as reporting them to the BBB for fraud as well as many other scam outfits as well.

    This should get them shut down once they are investigated further by the BBB and FBI for various reasons.. My lawyer is in this process right now.

    I will not stop even if i have to open a 1 million dollar law suit, then so be it! Flippa you messed with the wrong person and will pay big time this time mark my words!

    DO NOT TRUST FLIPPA. THEY WILL STEAL YOUR MONEY AND TIME!

    Frank

  35. Frank says:

    I urge anyone else with the same type of experience to come forward and expose what flippa has done to them in the past right here on prosperly.

    If the admin of this site allows me i will also post a few links to other sites like this one where other people who have been ripped off by flippa can report flippa and share there story as well.

    This should help the word spread about flippa and make buyers and sellers much more aware about how badly flippa can rip off there members.

    Please dont be shy people flippa must pay for what they have done to people it is very very wrong :(

    Trust me someone who has been personally ripped off by flippa for more than $4500

    Frank

  36. Leslie says:

    Just heard about buying and selling websites and was directed to Flippa. I am also looking to buy a site that doesn’t require a lot of maintenance. I’m an underemployed massage therapist, so my tech skills are very limited. If there are any sellers out there, feel free to approach me. I will check out the other 5 sites that were recommended.

    Thanks!

  37. Dr.Srinivas says:

    There was no way out for them to ignore you when you rank next to flippa for keyword “flippa”

  38. Adam says:

    Yeah there is definitely impact there.

  39. jackyJ says:

    Very interesting post and very useful post. Mostly of those things I learned but on harder way :)

    Any case, would you share me best way to find direct buyers (I know for popular forums, but when you say private sale what you mean on if it is not secret?)

  40. JRL says:

    An interesting blog. I’ve had similar experiences as both a buyer and seller. I agree with several of the other comments, especially re. the alternative selling websites. I didn’t have much luck with my eurozonemess.com site at flippa, but have had some positive responses elsewhere, espec. as this relates to selling fees etc.

  41. Barbara says:

    Flippa’s time has come and gone. It is tragic to watch a company die a slow death. I started selling on Flippa in 2007. It was a great place back then. But I have washed them implement so many anti-seller policies is just insane. Within the last 30 days they have increased their listing fee to $20. When you go through the checkout process they give you additional options which Will increase your fee to up to $200 or more. This is not counting the success fee. So when you’re all said and done, it may cost you anywhere between 20 and $200 or more to sell a site (my expense wise $700 including the listing fee, the featured sightsee, the Twitter feed, etc.) the owners of this site are so completely deluded, releasing additional gimmicky features, and they are completely separated from reality. Unfortunately, right now, it’s really the only place to buy and sell sites. As soon as a better place comes along I will leave Flippa forever. I cannot express just how much I despise the people who run that company. They are completely clueless. I have also noticed that as they have grown, more and more bugs are creeping into their code. Some of my oldest IDs have bug related problems that prohibit me from updating their profiles or make changes. Again, I have no idea what planet the owners are living on. They have no idea, none whatsoever, about what’s going on.

  42. Matharim says:

    I got suspended today on Flippa, i sold 6 websites last month and everything so far so good, yesterday my brother decided to sell his website, and i did not want his listings to be on my account, that would be breaking TOS guidelines, and i really did not wan any trouble, so be it.

    My brother started an auction on his account, ( we live in the same house ) today i find out both our accounts are suspended, i asked Flippa for resolving this issue, but they are closed right now and opening in 10 hours, i will keep you guys updated here, this is really not fair against me.

  43. Adam says:

    Yeah, that happened to me as well. I helped a friend get signed up for an account on my computer when he came into my office. Of course they assumed it was me trying to create a duplicate account. They didn’t even ask me about it they just suspended the new account.

  44. Matharim says:

    Adam, they suspended the new account and also my old account, which had 2 listings active, i don’t know what to do, they will be back in about 7 hours, i will keep you guys updated in the outcome.
    What happened to your account till date now?

  45. Kenny says:

    Hi Adam,

    Your post really impressed me very much.

    I was just looking to get started on website flipping and was looking to get started on flippa.com in the first place but with your information and alerts over this post do gives me a great refreshment to help me get alerted what I need to do when something happens on flippa.com such as the buyer part and filing an earlier dispute.

    One thing to ask for now.

    How many flippa accounts can we create?

    Just wanted to be cautious before I get started on it.

  46. Adam says:

    Kenny, they definitely only want you to have one account.

  47. Ian savage says:

    I purchased $3000,00 for websites on Flippa and the seller will not pay the backdated hosting fee on go daddy, Go Daddy will not let me pay for the penalty because it was never transferred into my name. The seller claims he has no money and I don’t know what to do. Anyone know of another way to get my sites or my money back? Thanks.

  48. Guy Bachar says:

    What about buying websites on flippa?
    I’d love to know your opinion about that marketplace from the buyer view…

    Thanks for a great post!

  49. Adam says:

    Guy, check out this post I wrote here on flippa.

  50. Spencer Goldstein says:

    I believe if you hadn’t ever wrote this blog post you’d be $500 in the hole and Flippa wouldn’t have cared. Their whole operation seems to be a scheme. I’ve never had good ROI using them and their listing fees are asinine.

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