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An UN-Announced Flippa Price Increase

Discussion in 'Site Flipping' started by kvmcable, Jun 27, 2012.

  1. kvmcable

    kvmcable Supreme Member

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    I had a client ask if I heard anything about a new price increase. I hadn't and he said a new listing is now $29 to list plus 5% closing with a minimum of $10. I thought surely they would have made an announcement of a 50% price increase and got busy researching. Sure enough my client was correct and now it appears if you're paying $10 for domains, an auction on Flippa will cost you $50 in fees before you make a dime.

    Here is their fees page:

    https://flippa.com/pricing

    Just a heads up for those building sites for flipping. Good luck!
     
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    Last edited: Jun 27, 2012
  2. poweronics

    poweronics Jr. VIP Jr. VIP Premium Member

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    So Flippa wants to shave off more now?
     
  3. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Sorry, which fee increased? I haven't noticed anything.
     
  4. kvmcable

    kvmcable Supreme Member

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    Yeah it looks like nobody at Flippa learned you can't tax a business in Economics 101. Sellers will pass through this increase and now buyers will be forced to spend more for entry level websites on Flippa or find them somewhere else (eBay).

    I mine and trend Flippa data. Traffic hasn't dropped significantly but the number of listings have dropped by 15% in the last 30 days and sell through rates are dropping also. It appears Flippa believes they'll shore up their shrinking bottom line by raising prices to loyal buyers.

    Rather than encourage more participation drawing in more sellers and buyers, they've all but closed desires for site flippers which is what built their business. Their data shows entry level website sellers and buyers contribute 80% of their revenue yet they're discouraging their participation. It's difficult to understand their poor choices and unless they reverse direction they'll alienate their customer base and follow the paths of former successful auction sites.

    I don't have a dog in the fight but support plenty that do. I believe Flippa should stop traveling the world bragging about their success and take care of business at home. I suspect another 15% listing drop and sell-through rates to plummet even further during the next 30 days given their recent price increase. Buyers most likely won't pay higher prices for the bulk of Flippa's inventory (entry level websites) and sellers won't spend $50-80 in fees (each) trying to sell these websites.

    JMHO
     
  5. kvmcable

    kvmcable Supreme Member

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    Meathead see the link I posted. Listing fee increased from $19 to $29 yesterday. Still no announcement.
     
  6. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Oh yeah, as a broker I got an email about the increase but read it early in the morning and then forgot. Not sure if other sellers did as well. I always use the $250 premium listing option, so I don't pay the listing fee anyway. Didn't even notice that $29 was an increase :)

    That's another big hit to margins for the lower end sellers. To me, this is just a signal that they are putting emphasis on the higher end/quality listings which is a good thing if you ask me.
     
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    Last edited: Jun 27, 2012
  7. kvmcable

    kvmcable Supreme Member

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    I've heard this said many times but the tragic reality is that without the low end listings (80% of Flippa's inventory) Flippa would be broke in weeks (literally). It seems they don't know what their customers want. Low end websites are the bulk of their listings because low end websites are what their buyers want. They can run off entry level sellers and with them will leave entry level buyers and what they have left is a buying audience that would fit in a classroom with a couple hundred listings to chose from.

    The first thing a business needs to do is recognize what their customers want and the second thing they need to do is deliver. The largest part of Flippa's buyer base doesn't want $10,000-$100,000 websites. Their sales numbers show a HUGE majority of their buyers want $300 and under websites.

    JMHO
     
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  8. AndrewAU

    AndrewAU Newbie

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    Thanks.

    Have posted this elsewhere but can confirm we've recently adjusted the listing fee - the first time since Flippa started over 3 years ago and something clearly displayed to all sellers as part of the listing creation process.

    In the last 3 years, we've implemented industry-leading features such as Google Analytics and Google Adsense verification, advanced search functionality, escrow integration, listing syndication to our partner sites and tools and, most recently, the introduction of proxy bidding. In parallel, we've increased our customer support team to cover weekends and reduced our response time by 50%.

    To this end, we continue to get a record number of sellers along with the most qualified and active buyers anywhere. Be assured we're not now sitting idle - we still have a load of amazing features still coming through later this year.

    The main reason that we didn't do our standard blog announcement for this change is that it only impacts sellers who start as listing this week - sellers are made aware of it at checkout which is arguably the point at which it matters. Blog posts go to everyone: buyers, sellers, and everyone in between.

    Any price adjustment is only relevant to sellers at the point of listing and this is where the new pricing is displayed (email was not really a strong option here as we have no way of identifying which users are about to create a listing).

    Apologies if this came across as silence on our part as this was not the intent (I initially though kvmcable was suggesting that the UN had announced this! ;-)).
     
  9. steelballs

    steelballs BANNED BANNED

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    No kvmcable was wise enough to know it would go unnoticed on the UN so for impact he posted on BHW :)
     
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  10. kvmcable

    kvmcable Supreme Member

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    It seems you didn't get the memo in March 2012 (3 months ago - not 3 years ago) when Flippa raised the minimum success fee from $5 to $10 affecting 80% of your seller's inventory.

    Clearly displayed as part of the listing creation process? Your listing process takes 15-30 minutes to complete and only after investing this time to create a new listing do you see your recent price increase at checkout. Probably a more accurate description is "clearly displayed as part of the listing finalization process" which is where the poor sap realizes your price just increased 50%. I don't see anything "clear" about this.

    Most of these features have no impact on the bulk of your inventory which are new, undeveloped websites. Most of those tools have a positive affect on a small minority of your listings so your pricing should have the benefited sellers paying for those features. Higher listing fees for sellers with higher reserves or higher starting prices. High BIN prices should demand more money. Instead you've passed on the costs of your high-end / broker level improvements to sellers that will see no or little benefit from your recent upgrades. E.G. You bragged about 80-90 listings using your Google verified tools and are passing on the costs to sellers of the other 1800 listings on your website?

    Maybe you should study your numbers a little closer. You're currently selling websites at about 38% per listing. Of those closed successful listings you're averaging almost a 20% non-payment ratio (1-5 buyers don't pay). You're averaging a 56% success rate considering sellers relist websites multiple times, paying you, now, $14 instead of $9 for each relist. Based on your sell-through rates a seller can realistically expect a $29 listing fee, a $14 relist fee plus a $10 success fee at 38% success rate. That makes a seller's realized Flippa fee $43 per listing. Add in a $10 domain fee and now a seller is at $53 minimum cost for 80% of Flippa's inventory.

    Your "record number of sellers" are mostly new accounts from previously suspended members. It only takes a few minutes to recognized your long term sellers are not listing or listing very few items. The bulk of your listings are from sellers with hardly 1 month history on your website.

    If Flippa had the technology or desire to discover obviously linked accounts they'd find many of their listings advertised as different sellers are in fact the same sellers. What are the odds your 6 high volume entry level website sellers all use the same hosting account, same IP address and same nameservers out of available millions of variations available? What are the odds they recruit as an MLM on WF (from Texas) with a step by step program showing participants how to exploit Flippa buyers? I find it no coincidence that when these sellers are reported for blatant shill bidding the standard Flippa response says your algorithm doesn't detect any shill bidding at this time. You would lose 25% of your inventory if you took action against this MLM business and their partners.

    Sellers are required to wait 3 days before filing non-payment dispute even if the buyer has already been suspended for other non-payment activities. After filing disputes the buyers must wait another 3 days for a response, closure and credit of fees. This effectively ties up a seller's inventory for a week. You've made no improvements in this area. If the buyer is suspended there should be immediate credit to a seller's account so their inventory isn't tied up.

    I could debate your BS all day long but suffice to say you're exploiting the bulk of your sellers and just as other auction marketplaces have learned, this never works. eBay practically BUILT Amazon from such practices. Flippa will BUILD their next competitor. I forecast your inventory will continue the current decline, your sell-through rate will continue the same poor performance it's seen in the last 30 days (now below 30%) (few sellers are fooled by your 3 month success rate which should be in the 90 percentile but Flippa brags at 56%). What isn't a surprise is the Sitepoint arrogance continues from 3 years ago and the "take it or leave it" mentality hasn't changed a bit. I suspect this is partly to blame for the poor reputation your marketplace has earned.

    Buyers will find other marketplaces or start building their own websites before dropping $50 for Flippa fees plus dealer profit for entry level Wordpress sites that have put food on Flippa's plate for 3 years. I contend you have no idea who your customers are or where your bread and butter comes from.
     
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    Last edited: Jun 28, 2012
  11. AndrewAU

    AndrewAU Newbie

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    Thanks kvmcable.

    Be assured that we're committed to serving the full range of buyers and sellers that do business on Flippa. My previous listing of some of our key achievements to date was not meant as a way for us to justify this adjustment by way of cost but to highlight how we're continually bringing greater value across the marketplace.

    Our listing fee has been $19 since we launched. This week remains the first time we've altered this. Adjustments such as this are not decisions we make lightly and we share your expectation that this may result in fewer listings for some sorts of sites. To the degree that this occurs for new websites, we would anticipate that it results in a higher sales rate for the remaining sellers as buyer demand has historically not been influenced by changes in supply (this explains why we have new site sellers who encourage us to increase fees further! ... we have no such plans at this stage). Outside of that, I'm not sure how you calculate your stats but they're not what we're seeing internally.

    The remainder or your concerns seem to be around fraud management and disputes - both of which we take incredibly seriously.

    On fraud, we commit a considerable amount of both technical and staff resources to doing what we can to limit fraud as much as we can: an unending task as there is always more to do. However, a large number of users claim shill bidding when we have firm evidence that this is not the case (ie we know both parties and can see established and otherwise unconnected transaction history for the accounts). Where we have evidence of possible shill bidding, we do display this on the bidding history for the auction. Bear in mind it is technically impossible to guarantee no-shill-bidding but I like to think we do what we can. Outside of shill-bidding, we are regularly updating our terms to assist honest sellers on Flippa: the most recent change being no longer allowing revenue claims for durations of less than 2 months so as to manage buyer expectations on these sites.

    To the degree that we may miss something, I strongly encourage you to contact our support team if you ever have strong evidence or conviction of shill bidding, fraudulent listings, or a MLM/WF cartel. We will follow through on every report we get. If you are ever unsatisfied with the response from our team, then feel free to email me directly (I've PMed you my contact details).

    On disputes, we totally hear your pain on that front. Our guys are currently looking at the range of ways in which we can improve this. Most recently, we reduced the required interval to lodge a dispute and respond to a dispute from 72 hrs to 48 hrs. This effectively shaves 2 days off the time within which you can relist. For instances where you have evidence that the buyer has no intention of following through, contact our support team and they'll be able to further fast track the dispute for you. Not a solution but hopefully a good indicator of our commitment to improving this for our sellers.

    Hope that goes some way to addressing your concerns.
     
  12. williamk

    williamk BANNED BANNED

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    I got no emails too. But this will surely hurt my sales now dammit.
     
  13. usama18

    usama18 Jr. VIP Jr. VIP

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    As Turnkey Sites Seller it will Hurt my Revenue alot because my sites averagely sells at $200. Cut 50$ (29$,10$, 10$ Domain ) this can dramatically change my earnings i am i have listed 2 sites for 29$ lets see how much new bidding system favors me else we have to choose any other option or another business.
     
  14. marvic

    marvic Regular Member

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    I don't know effective date, because today i list website on flippa just cut for $19.
     
  15. bigbooby

    bigbooby Registered Member

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    Greedy people at flippa.Now @AndrewAu since you have raised the listing fee cancel the success fee and those percentages you eat off from the seller.I am 100% sure your downfall is not too far.
     
  16. richcamp

    richcamp Regular Member

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    Kvmcable, maybe its a good time to setup a competing site that provide more reasonable listing fee?
     
  17. kvmcable

    kvmcable Supreme Member

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    Naw, I have enough pans on the stove and my current business with Flippa sellers works just fine. I just feel their pain and no doubt I'll lose a couple of them as clients because Flippa has priced them out of the site flipping market.

    If I do anything to support Flippa sellers it would be allow them to list on my auction websites for free and just take a cut on sales (let them pay for actual performance rather than potential performance). I have several running with decent traffic but I'm not sure I want to hire more staff to babysit website listings and not sure what impact those will have on other listings which are mostly local help wanted / items for sale.

    No doubt a competitor or two will surface soon. Flippa's recent actions almost guarantee it.
     
  18. Seadragon

    Seadragon Regular Member

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    A competitior is what we all need, flippa aint in this for the customers, they literally have 99% of the "selling website niche" so raising there fee's when they like is going to have minimal effect on how many purchase and sell on flippa after raising there fee's. Because honestly, there isn't anywhere else to go and sell websites.

    Flippa is not worth the amount of fee's we pay. Thus why i always sell my websites privately.
     
  19. Typlo

    Typlo Jr. VIP Jr. VIP Premium Member

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    This is getting even more unethical. Someone mentioned about the fee increase as a comment on Flippa's facebook profile, and they removed his post (As facebook page admins can remove comments) without responding to it. They are evidently trying to hide this.
     
  20. kvmcable

    kvmcable Supreme Member

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    They removed 5 of his posts without a response. He's a client of mine and doesn't have a problem speaking his mind. They deleted many of his posts and even messaged him in Flippa to not post such comments on their FB page. These Sitepoint guys are all arrogant jackasses, they know nothing about customer retention, customer service or good business. Flippa has a very short term business plan. Nobody that knows business would disagree. Let them lie in the bed they made.
     
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