Knee-deep in Stats: Past Sales Teach You How to Sell Your Website

I recently gained access to Flippa’s archive of sales data (thanks a million to the guys at Flippa), and I’ve been having a blast pouring through the stats. I’m going to share what I learn in a regular segment called “Knee-deep in Stats,” where we’ll look at the trends and historic data that reveal how to get top-dollar for our website sales.

For the love of God, Put Analytics on Your Website!

Travis wrote a post some time ago entitled, “Hey Knuckle Dragger, Install Google Analytics Before You Sell Your Website!” so it’s not like this assertion is breaking new ground, but I think you’ll be surprised by the data.

I took a look at all sites sold since January 1 of this year with a claimed monthly net profit of at least $25 and at least 100 unique visitors per month (to weed out the startup sites that would otherwise skew the data). Here’s what I found. Continue reading “Knee-deep in Stats: Past Sales Teach You How to Sell Your Website”

The Two Types of Websites That Sell The Best On Flippa Are…

I was wondering what types of websites sell the best on Flippa so I thought I would do a little research and find out. I had a pretty good idea which ones were selling well but I wanted some data to back up my hunch. It turns out I was right on the money.

According to Flippa’s clearance rate data going back to April 18th of this year, autoblogs and AdSense sites outsold all other types of websites. For those of you not familiar with what the clearance rate is, it is simply the percentage of sites sold. In the spring, these two types of websites had clearance rates of 75% and 73% respectively – well over Flippa’s overall average clearance rate of 56% at the time. Take a look at the graph: Continue reading “The Two Types of Websites That Sell The Best On Flippa Are…”

5 Types of Websites That Aren’t Selling As Well Anymore

I spent the better part of my morning today digging through the data I’ve been collecting from Flippa.com. Let me tell you, there’s nothing more fun than looking through data…lol. Flippa is the largest and most popular marketplace so it’s the best (and only) place to spot trends in the industry.

Flippa uses a tagging system, that in my opinion is completely worthless right now the way they have it set up as I lamented in this post, but it’s the only thing we have right now to gauge what types of sites are in demand and selling well. Studying Flippa’s tags is far from perfect but at least it gives us some idea of how some of these types of sites are selling. Then again, the tagging system is so screwy that it might not tell us anything but I thought it might be interesting to post my findings anyway.

Looking at the chart below, you’ll see the clearance rates from week-to-week for the past couple months for the five most popular types of sites according to Flippa’s tagging system. Clearance rates, by the way, are the percentage of solds.

Flippa Clearance Rates

The first thing you notice is the obvious downward trend in the clearance rates for all five types of sites. In other words, websites using the five most popular tags aren’t selling as well as they were just a couple months ago. Affiliate sites and WordPress sites are down the most by 10 and 9 percentage points respectively.

Open Listings Trends

While I was putting that chart together I thought I would take a peak at the open listings data for the same tags and chart it. Here is how it shakes out:

Flippa Open Listings

What this chart shows is the number of open listings by these tags from week-to-week for the past couple months. Open listings are auctions that are live and not yet sold. With the exception of websites tagged by “affiliate,” all websites using the other tags are down.

What Does All This Mean?

Again, given Flippa’s weak tagging system it might not be showing us much. However, I think we can be confident in concluding that sales are down – period. Websites just aren’t selling as well right now regardless the type of website. This is confirmed looking at the total Flippa sales from week-to-week:

Total Flippa Sales

Total sales from week-to-week are down just a little over 7.5% from a month ago. I’ll continue to track this data and will post an update in a couple months. In the mean time, if you are finding that your websites aren’t selling as well as they used to on Flippa, you’re not alone. This is why website flippers need to think outside the box and look at other ways of flipping websites – such as selling websites locally as taught in the Local Flip Formula.

The Average Sales Price of a Startup Website? $130

The other day I published my interview with Michelle Adams where we discussed the current state of startup websites among other things. I contend that the startup market is dead, or at least dying, but Michelle doesn’t agree. As far as she can tell, startups are doing just fine.

Mike Roosa of www.MikeRoosa.com left a comment after the interview asking if anyone has actually done any research on startups to say with authority what’s up with them. Good question, Mike! Why didn’t I think of that before I started spouting off my mouth! Since I am apparently talking out of my ass (and since I aim to please my readers), I spent some time today researching startup websites on Flippa.com. For you newbies to website flipping, Flippa.com is the largest and most popular marketplace to buy and sell websites so that’s why my research was conducted there. I was surprised at what I uncovered.

Before I divulge what I learned, let me define what I considered to be a startup website for my research and how far back I studied the data. I researched all websites that were 7 months old or newer (established in November 2009 or later), had zero traffic, and zero revenue. I examined the sales data going back to November 2009.

There have been 5,260 startup websites listed since November 2009. Surprisingly, 3,426 of those startups, or just a little over 65%, actually sold! I was honestly expecting something between 30-50%. At 65%, that beats Flippa’s current sales rate of 55% overall. “Only” 1,834 startups didn’t sell.

Now, to calculate the average and the median I had to fudge a little bit. Flippa doesn’t make it easy to study their data (HINT HINT Flippa). In fact, the only way to calculate the average and the median was to cut and paste the sales figures for all 3,426 solds! I don’t think so. What I did was I took a sample of that data. I was never good at statistics by I do recall my professor saying that a decent sample of a large data set will give you a fairly accurate statistic. I randomly selected 800 sales figures – about every third sales figure (give or take). Hopefully that was a big enough sample.

The net result? Drum roll, please…the average sale price of a startup website over the past seven months was $130! And the median price was $100.

These numbers didn’t surprise me. I was guessing they would be around $150 so I was close. Scanning through the list, the bulk of the solds were between $100-$200. That seemed to be the “sweet spot” price range for startups that sold over the past seven months.

There were also a few interesting top selling startups over the same period. Now for this, I actually did manually scan all 114 pages of results to find the top sellers! PhoenixForexCode.com, a Forex robot ecommerce website, sold for $2,900. The buyer got a bargain, however, because the seller said it was a cash machine, in a niche guaranteed to make money…lol. You have to love the hype some of these sellers put into their startup listings. See auction here.

An attorney directory, AttorneySiteGuide.com, was another startup that did pretty well selling for $1,997. See auction here.

Another notable was eMillionaireBluePrint.com, which was a ClickBank ready site that provided a video training course on how to make money online as an Internet Marketer. It sold for $1,800. The seller did pretty good on that deal but hasn’t done so well since as he now has a trust rating of -15! See auction here.

On the other end of the scale, there were many sites selling for less than $19 – what Flippa charges sellers to list their websites for sale. There were even some that sold for $1!

What did I take away from this research? I was wrong – and I was right. My wife won’t be surprised at that conclusion as I rarely admit I’m totally wrong;)

I was wrong saying that startups were dead. There have been over 3,400 startups sold over the past seven months and the sales rate among startups at 65% is actually better than Flippa’s overall sales rate of 55%. I wouldn’t call that dead. I was right, however, in saying that the prices aren’t as good as they used to be. With an average sales price of $130 and a median price of $100 (and most selling between $100-$200), it is much harder to make good money selling startups.

Studying Past Website Sales Is The Key To Your Flipping Success

“History teaches everything including the future,” wrote Alphonse de Lamartine in the 19th century.

Well I have no idea who Lamartine was or the context in which he made that quote so famous, but nothing could be truer. If you study history, you can learn from it to help you have a better, more successful future. And this holds true even when flipping websites.

Whether you are buying or building websites from scratch to flip, it’s important to study past website sales. By studying websites that have sold, you will learn what to do to have similar success. To that end, I have launched a new section on this website that provides historical data on past website sales.

Let me show you how this historical data can be so helpful for website flipping…

I will be compiling the “most actives” and the “top sellers” for each month as these are the most important historical metrics to know. The most actives show those websites with the most bids. Essentially, it will tell you what types of websites are in demand. This information is particularly useful for short-term flippers as they will be able to determine what types of sites to develop to meet the demand.

The top sellers obviously show those websites that have sold for the most money. While this information can certainly be interesting by itself, especially when a website sells for $250,000 like ReTweet.com did, what you can learn from these website sales is what is truly interesting. These sales provide a wealth of information not only for website flippers but for Internet Marketers as well. The top sellers are blueprints of success!

To read these “blueprints,” you’ll have to reverse engineer the sales, which is incredibly easy to do given how I’ve laid everything out in the individual past website sales pages. For starters, the tables will show you when the websites were established, the number of unique visitors they got, and most importantly, how much revenue they generated. You’ll also see brief notes as to what niche the websites were in and how they were monetized.

Then you can click through to the actual auction listings to learn more about the websites. You’ll discover specifically how the websites were monetized and what sorts of things the previous owners did to promote them. To gain more insight, you should visit the websites themselves to see how they are designed, organized, and generally structured. All of this information will be helpful in learning how to either improve an existing website or how to build one successfully from scratch.

Finally, if you are improving an existing website or building one that is in the same niche as a website listed as a top seller, you’ll want to check the backlinks to the website. By doing this, you’ll be able to determine how many backlinks to get – and where to get them from – so that your website can have as much success as the top seller.

Learn from history and let the past website sales guide you to future website flipping success!

Was Twitter The Mystery Buyer of Retweet.com for $250,000?

I ran across an interesting post over at the DomainGang.com blog about the recent sale of Retweet.com on Flippa for $250,000. The post was about the trademark ramifications of the term, “retweet.” Apparently there are two pending trademark applications for the term.

The post details these applications and while I’m sure you’d love to read about all the legal mumbo jumbo, I’ll spare you the details. What’s important is that one of the applications was filed by Twitter and the other one wasn’t. Furthermore, the fact that there are pending applications indicates the term will likely be a registered trademark so where does that leave the buyer of Retweet.com from a legal stand point?

Well accordingly to the post, it might not matter. The author “guesses” that the buyer may in fact be Twitter themselves. How does the author come to that conclusion? Given the proximity of the status update of Twitter’s trademark application (March 1, 2010) and the sale of Retweet.com the following week, Twitter could very well be the buyer.

It makes sense to believe Twitter may be the buyer for a few reasons. One, purchasing a high-traffic domain and service so closely related to their own makes good business sense. Second, paying $250,000 for a domain that is getting 12 million monthly visitors is a drop in the bucket given the valuation of Twitter. Finally, as the author of the post points out, making such a purchase adds weight to their trademark application against the other applicant – giving them the edge in obtaining the trademark.

What Say You? Do You Believe Twitter Was The Buyer?
Sound Off In The Comments Below!

iPadAccessories.com Sells for $9,000 But Was It Worth It?

FlipWebsites.com is all about buying and selling websites so normally I wouldn’t write about a domain-only purchase. However, the purchase of iPadAccessories.com recently on Flippa.com can provide a lesson for website buyers. The lesson being that you should be very careful about buying websites (or building and selling websites for that matter) that have a trademark in the domain.

The domain auction on Flippa.com for iPadAccessories.com ended on February 3, 2010 with 42 bids and a sale price of $9,000. You can view the auction listing here. I’ll give the seller props for being forward-thinking and for being a very shrewd speculative domain investor. He likely snagged the domain for less than $10 and made over $8,500 on the deal after his listing fees. However, I’m not so sure the buyer did so well in the deal.

TechCrunch.com reported on January 7, 2010 that Apple had filed a complaint with the ICANN UDRP (Uniform Domain-Name Dispute-Resolution Policy) back in November 2009 against Daniel Bijan, who owned 16 domains with Apple trademarks in them. One of the domains Bijan owned was iPodAccessories.com. On January 6, 2010, Apple won the rights to all of his domains.

Do you see where I’m going with this? What are the chances that Apple will file a complaint against the “lucky” buyer who purchased iPadAcessories.com? I don’t know about you, but I’d be sick to my stomach if I lost $9,000 over a simple domain name. I hope the buyer doesn’t get nailed but I’m not holding my breath.

How does this apply to website buyers? As I wrote about in my due diligence 101 article, you need to tread very carefully when buying websites with trademarks in the domain. Unless you have explicit written consent from the trademark owner that you can use the trademark, I would avoid any website with a trademark in the domain.

At the very least, you should do some digging around the Internet to see if the owner has a track record of pursuing people who use their trademarks in domains as Apple clearly does. I would also be looking to see if there are a lot of other websites ranked in the top ten on Google, Bing, or Yahoo! with trademarks in them. If there were, I would check to see if they were owned by the trademark owner or not.

Personally, after my experience buying a website with a trademark in the domain I would never do it again with or without written permission. Owners of trademarks can change so even if you have permission today, there are no guarantees for tomorrow. Imagine spending a couple years building up an authority site on a domain with a trademark in it only to find out down the road that you can no longer do that. You could potentially lose everything overnight!

The best thing to do with trademark domains is to stay away from them no matter how tempting they are. I hope the buyer of iPadAccessories.com never hears from Apple but I won’t be surprised if he or she does. I just scratch my head and wonder why anyone would take a $9,000 gamble on such a risk in the first place.

Would You Feel Comfortable Buying This Domain?
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