I’ve been asked this question several times before: do I use Flippa to buy/sell websites (aka ‘flipping’). My answer is NO. I’ve read a lot of stories online from webmasters who have sold their sites for thousands of dollars there. I believe that once in a blue moon you’ll get a genuine seller who is trying to sell a great site because they need the money (general rule of thumb is that a site is worth 10 times what it earns in a month – but this is not a set rule). But most of the time, you’ll get a bunch of crappy unethical ar$eholes trying to sell their crappy site for a million dollars. They earn because there’s always a rich idiot around thinking they’ve scored a bargain.
I have a tab open on the flippa.com site and I want you to consider a few things before you hit the ‘buy now’ button. Assume that I am a potential buyer. Here I am, shopping for sites on Flippa. I enter the page and I see a site being sold for a starting bid price$45’000. Buy it now (BIN) is $100’000. According to the seller, this is the “next Mashable in making”. Okay, let’s keep an open mind for now.
1 – Does not accept Escrow payment
*Looks at the stats* Oh! The seller DOES NOT accept Escrow payment. That’s a red flag, especially if the seller is asking for over a thousand dollars. If you don’t really know what Escrow is, it generally works this way:
The buyer and seller agrees on the amount of money, the buyer sends the agreed amount of funds to the third-party (Escrow). Escrow confirms that funds have been received. Seller hands over website. Buyer confirms they have received the website. Escrow releases funds to seller. Everyone is happy.
If the seller does not accept Escrow the buyer is taking a risk. Because this means they will have to send the funds directly to the seller, and if they are unhappy with the website or if the website is never transferred to them, then they have been screwed over.
2 – Estimate Actual Visitor Stats
The most recent 3 months is what’s taken when a site’s traffic is estimated. This is very unfortunate because traffic can be very easily manipulated. Although Alexa ranking can be very inaccurate to determine the success of a website through actual visitors, what I like about it is that it is very sensitive to site activity (this is just my personal perception through experience). Check this out:
This is the Alexa ranking of the site in a period of about 1 year. Notice that in the blue area, there is a slight decline. The green area shows a dip, almost zero activity/visitors. The red area shows an odd rise in traffic/activity and this fluctuates for about 2-3 months. Despite the fluctuations, a general decline is still obvious.
I wouldn’t necessarily say that the traffic is fake. But I think that the site receives only about a hundred visitors a day. Alexa might be influenced in this case because their site is updated almost daily.
3 – Estimate Actual Website Earnings
They claim to earn about $100 a month. Monetization method according to the seller, is not through advertising, product or service sales nor is it through affiliate income. Doesn’t seem to be an ecommerce site either so are they really earning anything at all? My informed guess is that their gross earnings is a few dollars, perhaps $xx, through Adsense every month (assuming there is no foul-play). But if they have hired writers then surely there are expenses. So what is their net earnings? Web hosting costs should also be deducted. I highly doubt the site is earning $100 through Adsense every month.
4 – Site Registered
The seller claims that the site was established on July 2011. However, the domain name seems to have been registered on the 18th of July. Lying is something that makes a seller look bad.
5 – Website Design
WordPress blog. Theme is not unique, site does not have a graphic logo and uses the theme’s default text logo. A logo is an important part of branding and a site’s identity. It’s very off-putting to potential buyers when a site that is claimed to be developed or established doesn’t even have their own logo and custom design.
Conclusion: This site is not worth its starting bid price of $45’000. Enough work has been done in terms of SEO; at PR4 in its first year…not bad, and their titles seem to correctly focus on IT trends (this helps drive in traffic). However, they don’t seem to have a large number of backlinks. Rather, they have probably earned their PR through link exchange. If the site is bought, will they keep the backlinks up? Also, their articles are very short – possibly just a quick rewrite of latest news. This is not sustainable; i.e. if the writers stop writing the visitor stats will go down. Someone who buys the site will have to hire writers to keep the site going.
Is it worth anything? I believe it’s got potential. Latestdigitals.com uses 2 generic words which is easy to remember. It also defines the site; it offering latest news. I think it’s good for startups, if you want to start at PR4 and have unique content already present. Is it worth a few hundred dollars? Yes, sure. Could it be worth a few thousand dollars? I don’t know. I would price it at a low $xxx, maybe $200-300. Get an expert to valuate the site.
There are many dodgy listings on Flippa. It’s almost 4am here so I’m not going to continue but I think you understand what I’m getting at. Do your research before you purchase a site, and be cynical.