Websites That Did Really Well on Flippa (and What We Can Learn From It)
sparklewise.com
sparklewise.com
The Experienced People forums are also a treasure trove of information about dodgy website sellers : http://experienced-people.net/forums/forum.php .
I use it as more of an idea generator and its one of the few places where you can get some indication of revenue levels for particular types of sites .
In my ten years plus of buying websites, I've noticed one massive change - the decline in quality and truth. Sellers have become very sharp at scamming buyers - faking traffic, faking revenue, faking the prospects of the business. It's a mine field and it's largely due to the emergence of the career seller, someone who creates sites just to sell. He is unable to make money with the site himself, but has an incentive to convince others that they can make money out of it.
Some of them run "site flipping" courses and talk a lot about "passive income from websites". Flippa has encouraged these site flippers as all their chatter does drive business.
Our forum has long been cynical and critical of some of these practices and we are, I believe, the largest destination on the internet for intelligent, unbiased comment on the subject of buying and selling websites and have exposed some of the biggest site selling scams on the internet including those of a couple of really sharp, high-end "template" sellers swindling buyers out of $50K+ for sites worth less than $500!
The "Just Sold" section, sheff, is filled with a fair amount of fiction. Many of those sites that have apparently sold ... haven't! I posted an example of this in a comment at your blog.
It doesn't matter how much junk is also for sale on Flippa as it's all very filterable and searchable, and those filters and searches can be saved. I have them saved as daily e-mail alerts so I just skim the new listings matching my criteria once a day.
Flippa is a marvelous wasteland of make-money-fast sites being marketed as make-money-fast schemes themselves. Although there are diamonds in that rough, surely there is another place where people go to buy or sell more established, traditional web-based businesses. Where is that place?
I don't think there is much possibility of making a success of a similar site for bigger cap web businesses, Thy are far less liquid assets and private sales would probably always be preferable to all parties involved once you're past a certain value threshold.
I really am not a fan of flippa, they have a great concePt and executed well yet they took the easy and (short term) more profitable route of allowing any old crap in. It's much like a lot of new online advertising platforms, there's a serious trust issue with all of the one ive seen where filtering out the scams, junk and misrepresentations is so time consuming and riskier it becomes not worth the time. I want to see flippa for quality small liquid sites (do they even exist and if thy do why would they be sold anyway?) and advertising platforms I can trust. Then I can start using these services.
If you look at the time it took to sell the numbers are actually pretty dismal depending on how much effort and money the owner put into the sites. But for me and the time I spend on projects 30k over 8 months or $200k over 6 years is a horrible return for efforts. That being said, I build very custom web-apps where these may be build a site and get traffic kind of sites.
It's an interesting article - I wrote a more indepth version of the same thing three weeks earlier
http://www.flipfilter.com/blog/2012/02/22/lessons-in-fast-gr...
Flippa has good and bad, but I doubt it would be any other way anywhere else. It goes back to the idea of what's value for one person isn't necessarily value for another.
We run the A-List Newsletter which reviews sales of web businesses both from Flippa and from private brokers (http://www.flipfilter.com/a-list) with a value generally above $10K. Each month I look at the top five sellers for that month (in terms of sale price) and the most active (in terms of bids). The top five can vary wildly; in February it seemed they were all Clickbank Sites that sold products in the MMO niche and followed the same formula of launch to a pre-established list, marketing the hell out of upsells and downsells, selling the business then using the initial list (now much larger post launch) to do it again.
The most active however are pretty much always sites that sell Internet Marketing Services - for example, a site which sells Facebook likes or one which offers Social Bookmarking services. Their final selling price is always around the $1 - $2K mark and they often end with in excess of 50 bids despite only being a few months old and having no real barrier to entry (ironically, the same sellers will often sell the same templated site again under a different banner a few weeks later). IMO, the sad part is the people who buy these sites tend to be new to the industry and no real information to tell them that this isn't a the easiest way to get a return on their investment.
There's going to be good and bad at every price range, and likewise types of sites which tend to do well (Adsense with earnings history, Clickbank affiliate sites, Email Newsletters, anything with a big list in the MMO industry) and things that don't (Web Apps with complex backends, Ecommerce with physical products, News sites which require 'real' journalism) but that doesn't mean the sites which don't sell well aren't worth something to the right buyer.
This isn't defending the truly bad stuff or the sometimes fraudulent sellers that you occasionally see on there - it's going to happen for reasons that probably boil down to resources, but if even 10% of Flippa listings based on the 1,000s it has are 'good' then it still has more to offer than a site with 80% good but only 15 listings.
Flippa is one of the many avenues one can use to sell a site or find one to buy. It has a high profile but in dollar terms accounts for a small proportion of online businesses sold. However, it's a popular location for webmasters and lower end websites and I recommend the flipfilter.com site for stats on the Flippa marketplace.
My own analysis is somewhat different. As I commented in the sparklewise blog (the OP link), figures you see in Flippa are deceptive. The $200K site mentioned at (D) in his blog post was sold a month later by the same seller for $40K. The chances are the first sale didn't go through. That's not an isolated case. I would advise that readers exercise caution, it's easy to get carried away with the large figures :)
I've been doing my own analysis of some Flippa stats (http://experienced-people.net/forums/showthread.php/6331) and the numbers are just not adding up for me.
I personally love for example reading the monthly updates on http://www.dnjournal.com/domainsales.htm . They are quite helpful to get a realistic approach towards the domain market. I am missing something like this for projects and would be even willing to pay some fee for "hard facts".
I know that highest sale value doesn't make it the "best" of the lot, nor is that what the OP is saying...but I don't get what value there is in that site except perhaps as a search-engine-flytrap...it doesn't seem to have much use for humans.
For example, here's a list of luggage companies: http://www.list-of-companies.org/Luggage_Bags_Cases/
And it appears to be an aggregation of websites claiming to sell luggage, with no rhyme or reason to the order.
The evaluation is a bit light for some of the websites I've covered. If this one sold for $200.000, it means there are other kind of directories that can be very profitable, either as your only website or as part of a portfolio of niche earners. Not something your average software developer will think of I guess. However, I imagine directories can be a bit labor-intensive (I don't have one myself).
I wanted to show that for software developers it's also possible to make websites that are not traditional webapps. There are lots of profitable websites out there.