Last week I published my interview with Justin of FlipFilter.com. The interview focused on the FlipFilter tool itself. I followed up the interview with a couple questions for Justin about the current state of the major website flipping marketplaces.
Since the FlipFilter tool pulls data from these marketplaces and since Justin is really big into numbers and statistics, I figured he would be the best person to talk to about this topic. I wanted to tap into the treasure trove of data he has and get some insight on how the marketplaces are doing and where they’re heading. Here is what Justin had to say…
FW: Justin, what sorts of “global trends” have you noticed within the website flipping market as a whole over the past several months?
Overall, (looking at May to current) the numbers listed week on week has decreased, but relatively, only slightly (less than I would expect after all the recent ‘Flipping is Dead’ drama). This seems to have bottomed out so I guess we’re seeing more stability. Whilst Flippa has lost some traction, Digital Point is starting to gain some credible listings with bargains often being picked up for a 1/4 of the price the same site would sell for elsewhere. Overall, prices have dropped slightly too, but when you remove starter sites from the data, prices have actually got stronger as I guess buyers have recently become more savvy to what’s ‘value’.
FW: I would imagine you’ve become very familiar with the marketplaces FlipFilter pulls from. In your opinion, what is the current state of these marketplaces right now? Are they getting better, getting worse – what are your general thoughts?
Flippa, the largest by far, has the problem of being number one, and when you’re number one everyone decides to attack. For anyone unfamiliar with the industry, there’s been a lot of negative ‘chatter’ lately on blogs and forums from people experiencing problems with starter sites (no traffic no revenue) failing to sell (I believe there’s even a few angry commenters on their recent blog post). I won’t get into the great debate about why, and whether it was doomed to happen, but ultimately many people simply lost faith and gave up and both Flippa’s listing and clearance rates suffered.
They also have a more serious problem lately with fraud and non-paying bidders, which could be a ‘nail in the coffin’ if a solution isn’t found quickly. I think they’re a highly profitable company and I’m in awe of their success with so few employees, but it’s probably time they put some of that revenue back into hiring additional people to help with security in both the code and the financial transactions.
I think (hope!) Flippa has a long future left providing it can change people’s expectations and perceptions. I think a combination of looking outside the world of IM to general low level investors and a responsibility for user education is key.
Digital Point is a total enigma; on the one hand we see a lot (and I mean a lot!) of crappy listings and probably discard at least 60% before they even make it onto our site. On the other hand, I think people are generally unaware of the genuine bargains you can pick up if you know what to look for. This is a generalisation, but many of the sites I see listed are from sellers in India who are great at grasping the technical aspect – creating the site, getting Page Rank, getting ranked almost instantly for various terms and hence getting traffic. The design and copy though is usually quite poor and often so is the monetisation strategy, (sometimes due to geographic restrictions on affiliate or advertiser programs).
You can pick up a mainstream PR3 site for less than $300 that’s already receiving a fair amount of targeted US traffic on a .com or .net domain. Simply tweak the content without affecting things like keyword density to make it more legible, tweak the design to make the site more credible and add high paying mainstream monetisation methods. In most cases, you make what you paid for the site in the first month.
Ironically, I believe DP has the most certain future of them all as people generally have low expectations of what they will find. I once suggested that they would do better by extracting the sites for sale section into its own marketplace, but watching the fate of Flippa could show otherwise.
Website Broker has been around for a while, and could have been a serious competitor to Flippa, but unfortunately lacks quality control. We frequently see listings appear that make $1,000 per month with a price tag of $10 million and think, “Yep, that’s a Website Broker one.” I have seen some real good sites listed here, but unfortunately, there’s just too much ‘market spam’ for it to be a serious competitor right now. I think an acquisition from someone with fresh ideas and a good management strategy would put this site on top.
Webmasters Marketplace is kind of like the underdog I hope will do well – partly because it’s run by a fellow brit 🙂 but it seems to be losing momentum. There is something here, but it needs a serious marketing push and some thought behind its strategy.
After Justin’s responses, it’s obvious Flippa remains king. The question will be, how long will they retain that title? Right now, it appears it is their title to lose and if they play their cards right, they could hold the #1 position for a very long time. It will be interesting to see how these marketplaces shake out in the months to come. I’ll be following up with Justin at the end of the year for another update.
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