kvmcable
Supreme Member
- Dec 28, 2010
- 1,354
- 2,823
Flippa is the literal definition of how to quickly destroy a solid business model. I don't think I've ever seen such a small company so totally out of touch with their customer base. Their changes in the recent 6 months have all been communicated by Flippa as changes for the "buyers" of websites. Have they completely forgotten the sellers are their customers? Their misguided changes for the buyers has left them with a 30% reduction in inventory in the last six months from their real customers, the sellers.
This is like watching a train wreck in slow motion. Flippa boasted of 2200+ running listings just last March. With that announcement they increased the minimum success fee from $5 to $10 on 75% of their inventory (listings under $200) saying it was an effort to get sellers to increase the quality of the websites they're listing. We all knew it was nothing but a money grab regardless of what excuse Flippa provided.
In May, Flippa saw the listings hadn't dropped significantly and introduced another price increase and this time it was significant. Increasing the listing fee from $19 to $29 sent shockwaves through their sellers. What could possibly be the reasoning behind a sudden 50% increase in listing fees? Again we heard from Flippa it's to reduce the number of low price, "template" websites and encourage sellers to create and list more valuable properties. Flippa continued with excuses for the 50% rate hike saying it was for site improvements that offered little benefit for the majority of their inventory. Andrew even appeared here and said with this additional revenue that Flippa would now offer weekend support for sellers. That hasn't happened. Support tickets from sellers are rarely, if ever, answered during the weekend. So once again, it appears this was nothing but another money grab by Flippa.
This time they didn't see the same low impact result as their previous money grab in March. Flippa's listing numbers have fallen steadily since they announced the 50% rate hike. Their listing numbers are continuing to decline and now teeter around 1450 listings on most days. But this only tells half of the story. To see the larger impact you need to consider the success rate of those listings. Success rates have also fallen and NPB have dramatically increased in the last 4 months. Most sellers I talk to are experiencing less than 15% success rate unless they're just giving away valuable property. Even the brokers are taking significant hits listing very valuable property on Flippa. We're seeing more and more relists and unsold property since Flippa's improvements for the "buyers".
So if Flippa isn't improving the website for the buyers and certainly not improving it for the sellers, than whom are the changes benefiting? Of course the changes only benefit Flippa. They've tried milking this cash cow for more milk than it can produce and just like a real dairy cow that is milked too often, the milk dries up and the cow stops producing milk.
So you would think Flippa might recognize their mistake with the dramatic drop in listings, absolute terrible success and NPB rates and try to turn the ship around and head back to better waters. Au contraire my friend, they're just getting started. It appears they are hell bent on sinking this ship before 2013 arrives.
So what have they done this time to the determent of the website auction powerhouse? They reduced the auction extension time by 75%, significantly reducing buyer exposure on all their listings. Now listings will be more targeted geographically and sellers will work day and night accepting or denying bidders. If you have an active listing on Flippa now you'll be glued to your monitor or smart phone if you want any sort of chance of selling it for your initial listing fee.
Once again Flippa says the change is for the buyers of websites. They referenced a poll that had 6 choices available with only one choice to leave the current extension untouched at 4 hours. That choice (leave it untouched) received an overwhelming majority of the votes during the first week of the poll (3 times any other choice). But you have to understand Flippa math to comprehend their interpretation of the poll. They had 6 choices with 5 choices meaning a vote to change it and only one choice as a vote to leave it (of course unexplained). The votes on those 5 choices totaled more than overwhelming majority choice to leave it untouched if you look today (48% untouched to 52% something else). What they don't know is I saw this coming. I took a snapshot of that poll on 07/31/2012 at 2100 hrs and at that time (5 days after the poll was announced and no longer receiving many looks) 52% voted to leave the 4 hr extension with the total of all 5 other choices at 48%. So it appears Flippa has been voting in the last few weeks to skew that poll to their liking. Of course a poll with one response for something and 5 responses interpreted against something is a rigged poll from the beginning. This is typical Flippa math that still boasts 50% of their listings sell after 3 months. What they don?t tell you is how many relists it took.
What is even more amazing is they claimed they listened to their readers yet chose 1 hour extension that only gathered 7% of respondent votes. Why not chose no sniping that received 11% of the votes or 15 minute extensions that received 16% of the votes. Even 30 minute extensions beat out 1 hour extensions. So coddle readers their votes matters but not really. 36% voted for extensions less than an hour. 7% voted for a one hour extension and 48% voted for no change (as it reads 7 weeks after readers were asked).
So why do I think Flippa made this change and ignored either the 36% that wanted less than an hour extension or the 48% that said leave it? For the same reason they made the last two significant changes; another money grab. They know damn well changing the 4 hour extension to a 1 hour extension will reduce a listing's views and odds of succcess. Flippa wins (gets paid) whether a listing is successful or unsuccessful. They know they'll increase their relist revenue by shortening the auction extension time. They don't advertise the number of relists a website takes before it sells but I know the numbers. Typically it takes two relists plus the initial listing fee before a seller sells his website. So the typical listings fees with the 4 hr extension was 29 + 14 + 14 = $57 and if you get lucky and sell it after the second relist you'll owe another $10 minimum for FVF. So a conservative number is $67 in Flippa costs.
Now with just a one hour extension you can expect the relists to at least double if not triple. Your website listing has much less exposure and a much higher probability of ending unsuccessfully. So a conservative calculation of Flippa listing fees are now $29 + 14 + 14 + 14 + 14 = $85 and the FVF minimum of $10 for a $95 conservative listing budget.
I predict that Flippa listings will take another significant hit in the upcoming weeks and before Thanksgiving if Flippa doesn?t fix their broken marketplace they?ll be down to about 1200 listings or less running concurrently.
Like I said this is like watching a train wreck in slow motion. It appears Flippa no longer wants to be the website auction powerhouse. They?re doing all they can to run off their sellers and their inventory is continuing to decline. I bet they will accelerate that decline with this latest announcement.
The rigged poll if you want to see it: http://flippa.com/blog/poll-should-we-reduce-the-auction-extension/
The latest Flippa post announcing the shorter extension times: http://flippa.com/blog/shorter-auction-extension/
This is like watching a train wreck in slow motion. Flippa boasted of 2200+ running listings just last March. With that announcement they increased the minimum success fee from $5 to $10 on 75% of their inventory (listings under $200) saying it was an effort to get sellers to increase the quality of the websites they're listing. We all knew it was nothing but a money grab regardless of what excuse Flippa provided.
In May, Flippa saw the listings hadn't dropped significantly and introduced another price increase and this time it was significant. Increasing the listing fee from $19 to $29 sent shockwaves through their sellers. What could possibly be the reasoning behind a sudden 50% increase in listing fees? Again we heard from Flippa it's to reduce the number of low price, "template" websites and encourage sellers to create and list more valuable properties. Flippa continued with excuses for the 50% rate hike saying it was for site improvements that offered little benefit for the majority of their inventory. Andrew even appeared here and said with this additional revenue that Flippa would now offer weekend support for sellers. That hasn't happened. Support tickets from sellers are rarely, if ever, answered during the weekend. So once again, it appears this was nothing but another money grab by Flippa.
This time they didn't see the same low impact result as their previous money grab in March. Flippa's listing numbers have fallen steadily since they announced the 50% rate hike. Their listing numbers are continuing to decline and now teeter around 1450 listings on most days. But this only tells half of the story. To see the larger impact you need to consider the success rate of those listings. Success rates have also fallen and NPB have dramatically increased in the last 4 months. Most sellers I talk to are experiencing less than 15% success rate unless they're just giving away valuable property. Even the brokers are taking significant hits listing very valuable property on Flippa. We're seeing more and more relists and unsold property since Flippa's improvements for the "buyers".
So if Flippa isn't improving the website for the buyers and certainly not improving it for the sellers, than whom are the changes benefiting? Of course the changes only benefit Flippa. They've tried milking this cash cow for more milk than it can produce and just like a real dairy cow that is milked too often, the milk dries up and the cow stops producing milk.
So you would think Flippa might recognize their mistake with the dramatic drop in listings, absolute terrible success and NPB rates and try to turn the ship around and head back to better waters. Au contraire my friend, they're just getting started. It appears they are hell bent on sinking this ship before 2013 arrives.
So what have they done this time to the determent of the website auction powerhouse? They reduced the auction extension time by 75%, significantly reducing buyer exposure on all their listings. Now listings will be more targeted geographically and sellers will work day and night accepting or denying bidders. If you have an active listing on Flippa now you'll be glued to your monitor or smart phone if you want any sort of chance of selling it for your initial listing fee.
Once again Flippa says the change is for the buyers of websites. They referenced a poll that had 6 choices available with only one choice to leave the current extension untouched at 4 hours. That choice (leave it untouched) received an overwhelming majority of the votes during the first week of the poll (3 times any other choice). But you have to understand Flippa math to comprehend their interpretation of the poll. They had 6 choices with 5 choices meaning a vote to change it and only one choice as a vote to leave it (of course unexplained). The votes on those 5 choices totaled more than overwhelming majority choice to leave it untouched if you look today (48% untouched to 52% something else). What they don't know is I saw this coming. I took a snapshot of that poll on 07/31/2012 at 2100 hrs and at that time (5 days after the poll was announced and no longer receiving many looks) 52% voted to leave the 4 hr extension with the total of all 5 other choices at 48%. So it appears Flippa has been voting in the last few weeks to skew that poll to their liking. Of course a poll with one response for something and 5 responses interpreted against something is a rigged poll from the beginning. This is typical Flippa math that still boasts 50% of their listings sell after 3 months. What they don?t tell you is how many relists it took.
What is even more amazing is they claimed they listened to their readers yet chose 1 hour extension that only gathered 7% of respondent votes. Why not chose no sniping that received 11% of the votes or 15 minute extensions that received 16% of the votes. Even 30 minute extensions beat out 1 hour extensions. So coddle readers their votes matters but not really. 36% voted for extensions less than an hour. 7% voted for a one hour extension and 48% voted for no change (as it reads 7 weeks after readers were asked).
So why do I think Flippa made this change and ignored either the 36% that wanted less than an hour extension or the 48% that said leave it? For the same reason they made the last two significant changes; another money grab. They know damn well changing the 4 hour extension to a 1 hour extension will reduce a listing's views and odds of succcess. Flippa wins (gets paid) whether a listing is successful or unsuccessful. They know they'll increase their relist revenue by shortening the auction extension time. They don't advertise the number of relists a website takes before it sells but I know the numbers. Typically it takes two relists plus the initial listing fee before a seller sells his website. So the typical listings fees with the 4 hr extension was 29 + 14 + 14 = $57 and if you get lucky and sell it after the second relist you'll owe another $10 minimum for FVF. So a conservative number is $67 in Flippa costs.
Now with just a one hour extension you can expect the relists to at least double if not triple. Your website listing has much less exposure and a much higher probability of ending unsuccessfully. So a conservative calculation of Flippa listing fees are now $29 + 14 + 14 + 14 + 14 = $85 and the FVF minimum of $10 for a $95 conservative listing budget.
I predict that Flippa listings will take another significant hit in the upcoming weeks and before Thanksgiving if Flippa doesn?t fix their broken marketplace they?ll be down to about 1200 listings or less running concurrently.
Like I said this is like watching a train wreck in slow motion. It appears Flippa no longer wants to be the website auction powerhouse. They?re doing all they can to run off their sellers and their inventory is continuing to decline. I bet they will accelerate that decline with this latest announcement.
The rigged poll if you want to see it: http://flippa.com/blog/poll-should-we-reduce-the-auction-extension/
The latest Flippa post announcing the shorter extension times: http://flippa.com/blog/shorter-auction-extension/
