SP Marketplace is closing down. What do you think of flippa?

[FruitMedley Post]

Sitepoint have announced they are closing the marketplace down here and have started a new site for buyers and sellers: flippa.com

There are major new changes
- improved search
- addition of a "private sale" option
- view counters on listings
- phone verification required to bid or even comment
- user defined categories and alerts for sites that meet the user's criteria
- "new pricing model" i.e. higher fees (with a 5% success fee for sites that sell)
- automatic email notifications based on user settings
- more verified site stats (i.e. the stuff that all those free tools provide ... is now integrated)

Other things I've noticed:
- The SP username and login work there as well
- No "accept all bids from this buyer". Each bid to be approved manually (though there is contradictory information on this)
- There's a new customer support forum: zendesk.com
- the forum is to "discuss all things flippa" so it may replace this Ask An Expert on SP
- removal of conditional bidding

Money:
- higher fees
- if your buyer is a non-payer, SP will still demand 5% of sale price as "success fee"
- that SP demand goes out at auction end and is payable in 30 days
- If buyer takes BIN and pays with Paypal SP assumes clear payment even if it's fraudulent or later bounces
- in case of echeck payment by buyer, SP considers it cleared immediately even if takes a few days

Feedback they seem to have forgotten or intentionally ignored:
- More transparency
- Disclosure not just of which sites sold but which ones didn't (so we can see just how successful it is to list/see what percentage actually do sell)
- Setting ebay type max price proxy bidding with the system handling your incremental bids
- blocking sellers from deleting comments (#1 most popular request)
- no integration of escrow service that people have been asking for
- listing for adult sites (#3 most popular request)
- free relistings for unsold sites or sites with non-paying bidders

Anything I missed?

Your thoughts?

[tke71709]

Originally Posted by FruitMedley Post

- addition of a "private sale" option

So will SP be acting as the escrow agent then? If not, what's the point of this?

- phone verification required to bid or even comment

That will be a big help.

- user defined categories and alerts for sites that meet the user's criteria

Greatly needed

- "new pricing model" i.e. higher fees (with a 5% success fee for sites that sell)

The 5% thing is absolutely ludicrous from a seller point of view, if someone sells a site for 100k or 1k the cost to SP is the same. Is SP going to do more work for the site that sells for 100k? Nope. That's just greed, plain and simple.

- automatic email notifications based on user settings
- more verified site stats (i.e. the stuff that all those free tools provide ... is now integrated)

Good

- the forum is to "discuss all things flippa" so it may replace this Ask An Expert on SP

Say bye to my input then, I have no need to go to another forum to help SP make money. I come to this forum because it's part of SP.

- if your buyer is a non-payer, SP will still demand 5% of sale price as "success fee"

Joke

- If buyer takes BIN and pays with Paypal SP assumes clear payment even if it's fraudulent or later bounces

Joke

- in case of echeck payment by buyer, SP considers it cleared immediately even if takes a few days

Joke

Feedback they seem to have forgotten or intentionally ignored:
- More transparency
- Disclosure not just of which sites sold but which ones didn't (so we can see just how successful it is to list/see what percentage actually do sell)

What? Help people make an informed decision? Heaven forbid.

- Setting ebay type max price proxy bidding with the system handling your incremental bids

Not the end of the world but something that really should be implemented.

- blocking sellers from deleting comments (#1 most popular request)

I suppose if one is going to charge through the nose for a listing, the least they can do is allow the seller to completely control the comments.

- no integration of escrow service that people have been asking for

Hi, we plan on hiking listing fees AND taking 5% of your auction price, but we aren't going to provide any more services to you for that money.

- listing for adult sites (#3 most popular request)
- free relistings for unsold sites or sites with non-paying bidders

SP doesn't seem to care about non-paying bidders anyway. If they acknowledge non-payment then they can't collect the 5% fee.

Everyone knows that every buyer on SP actually goes through with their purchase so this shouldn't be a problem (note the sarcasm here)...

Your thoughts?

I don't have any significant issues with anything other than that ridiculous success fee. There's no way to determine whether a deals go through or not and SP has done nothing to justify taking 5% of the final fee.

SP isn't a broker, they are a simple listing website and therefore they don't deserve to take a % of the sale price. If they insist on doing this then they need to start an escrow service to a) earn that money and b) actually determine that the money changed hands officially.

If I were a seller I would have to think twice before listing a site on SP based on those rules.

[FruitMedley Post]

tke71709, I should have mentioned - there is a cap on the 5%. It's 5% up to a maximum of $499.

OK, that's still a lot. For all sites up to $10,000 that 5% of sale price is over what they were paying before. For sites selling for over $10,000, that's an additional $499 whether the buyer pays or not. That's $10K can't be an accidental figure. They would have arrived at the cut off point after a careful look at sale prices in the marketplace and where the bulk of their business is.

If Sitepoint sends you the invoice and you refuse to pay, I wonder what happens i.e. you become a non-payer just like the bidder. It's not worth taking you to court so they'll be left with the only option of closing your account. For the one-off sellers that's not a problem. For the others.... I see a business model on the horizon: selling registered and phone verified Sitepoint accounts

SP doesn't seem to care about non-paying bidders anyway. If they acknowledge non-payment then they can't collect the 5% fee.

That's a good point.

There's a downside to SP running an escrow service: the temptation to make it compulsory to use their escrow and nobody else. Benefit? SP then has no excuse to charge sellers caught out in non-paying transactions. However, I don't believe SP is big enough to be an escrow. The business base wouldn't support them getting registered as an escrow even just in the State of California. There are huge deposits to be paid, annual fees, financial compliance burdens etc., they'd have to partner with one of the big boys.

Hi, we plan on hiking listing fees AND taking 5% of your auction price, but we aren't going to provide any more services to you for that money.

To be fair, they are providing some extra services in the new setup.

[tke71709]

Originally Posted by FruitMedley Post

tke71709, I should have mentioned - there is a cap on the 5%. It's 5% up to a maximum of $499.

OK, that's still a lot.

For a posting with a marginal cost of close to zero, that's ridiculous.

If Sitepoint sends you the invoice and you refuse to pay, I wonder what happens i.e. you become a non-payer just like the bidder. It's not worth taking you to court so they'll be left with the only option of closing your account. For the one-off sellers that's not a problem. For the others.... I see a business model on the horizon: selling registered and phone verified Sitepoint accounts

Exactly, this has no impact on the crappy sellers but potentially a huge one on the honest sellers.

There's a downside to SP running an escrow service: the temptation to make it compulsory to use their escrow and nobody else. Benefit? SP then has no excuse to charge sellers caught out in non-paying transactions. However, I don't believe SP is big enough to be an escrow. The business base wouldn't support them getting registered as an escrow even just in the State of California. There are huge deposits to be paid, annual fees, financial compliance burdens etc., they'd have to partner with one of the big boys.

There are lots of downsides to running an escrow service, but that is the only way they can determine if an auction is successful or not.

I've been dealing with a seller for some time now trying to put together a deal that worked for both of us. He decided instead to sell the site to another user for lets say 5k, fair enough.

He contacted me today saying the other buyer backed out and he wanted to talk to me further.

Should he have to pay $150 to SP for a sale that never happened on top of his listing fees?

What's to stop a SP competitor from logging in, BINning sites and then disappearing?

We all know that phone verification is no protection, anyone can get a throw-away phone number either through skype, another similar service or just by buying a pay as you go cell phone.

To be fair, they are providing some extra services in the new setup.

Not enough to justify those prices.

If I'm charging 5% for a decent priced site, then I'm also in charge of verifying stats (having google analytics put on and checked), backlinks explored, etc... Those are value added services. Letting you search for listings and create filters aren't value added services for sellers at this point.

I'd be tempted to find out how many "successful sales" are actually completed and how many the buyer disappears or uses a hacked paypal account (although you wouldn't sell a high-end site using PayPal hopefully).

[FruitMedley Post]

I'd be tempted to find out how many "successful sales" are actually completed and how many the buyer disappears

That would be an interesting study. I did a somewhat similar, unscientific, back of the envelope calculation in this thread.

Here's how the results pan out
(Premium Sites)
Sold: 5 (19%)
Zero bids: 15 (58%) Yes, over half of listed sites get no bids at all.


There were 79 listings in Established Sites

Sold: 24 (30%)
Zero bids: 30 (38%)
Those with bids pending sale: 25 (31%) On many of these bidding hasn't reached the reserve so it's likely they won't sell. If these 25 don't sell then the percentage of unsold sites in this section is roughly over two thirds at circa 70%. The corresponding figure in the Premium category would be 80% unsolds.

The success rate differs considerably from what Matt has claimed elsewhere but, of course, it would be good if it was out in the open and sellers could make an informed judgement. (Actually, it's not about publishing stats - it's about the length Sitepoint goes to conceal listings of sites that haven't sold. It's like they want you to see only the successes and are concerned that if they show both sold and unsold the percentage of unsold may scare sellers away. When I asked them about it they came up with a very unconvincing answer)

[tke71709]

Originally Posted by FruitMedley Post

That would be an interesting study. I did a somewhat similar, unscientific, back of the envelope calculation in this thread.

But does that take into account "successful" sales where the sale, for one reason or another never closed?

Before, you were just out your listing fee (unfair enough), now you're out your listing fee +5% of the mythical sales price.

I don't think the overall % that sells is a completely fair number to pin on SP. There are so many legitimate reasons for a site not to sell that are outside of SP's control.

For example the listing where the guy was claiming $1 million in revenue for an unfinished script. You can't hold SP responsible for his idiocy.

[tke71709]

Originally Posted by FruitMedley Post

When I asked them about it they came up with a very unconvincing answer)

The reason we decided upon this was to prevent PM bidding once those auctions have ended.

Huh? The person paid for a listing, no one bought in the 30 days, who cares if someone decides to put a PM bid in at that point?

[3Six]

I don't think the overall % that sells is a completely fair number to pin on SP.

So you manipulate the layout to give the impression that every site sells? How is that fair on sellers?

[benitez17]

Basically, it looks like they drastically increased the fees while ignoring the requests of the users and making the service (and I use that term very loosely) worse (if that is possible).

What do buyers get for these higher fees? What happens when a seller backs out of a deal or vanishes after making a successful bid? I assume SP is going to collect their "success fee" on a number of sites that were not sold successfully. They state that other site exchanges or brokers charge even more, but those places actually do work to complete the sale, not just provide a place to list sites and claim that sites are sold whenever the auction ends.

And for sellers, why remove conditional bids? It is protection for buyers who want to at least honor the spirit of SP's claim that these bids are binding by allowing buyers to state that the bid is subject to proof of all claims, using escrow, etc. Also, are they going to do anything about the fraudulent claims of buyers? I like the ability to screen sites by my own requirements, but if the sellers are listing sites with earnings of $5000 a month and 150,000 unique visitors a month, when that is actually what they see as the "potential earnings" and "potential traffic", then the screen is useless.

I predict that this is going to fail, since it will drive sellers of high end sites to an actual broker who cares about selling their site (because that is how they make money) instead of collecting fees, and it will drive low end sellers to other existing places where you can list your site for free or a minimal amount of money because these higher fees are going to eat up too much of their profit. Also, I have no confidence that they will be able to execute this successfully, because they haven't made any useful improvements to the current marketplace or added features that are requested by their customers. They seem to actually make changes that make it more difficult to buy a site here, and these moves seem to be yet another step in that direction.

[jemple]

I predict it will be a huge success and for those *****ing aout the fees - do you expect them to develop this stuff for free just so you can all benefit for nothing???

[AdamWB]

Wait wait wait WAIT WAIT!!

Are you telling me they will take the 5% fee EVEN IF THE BUYER IS FRAUDULENT or decides to back out???

So if I sell a site for $10k and the buyer backs out (this happens ALL THE TIME), I still owe sitepoint $500?

I'm sorry but that is boderline criminal. I was already upset about the extra fee they are charging with absolutely no additional services (escrow service? hello?), but now they want it regardless if the buyer really buys it or not.

Who in their right mind would EVERRRRRR sell their site on flippa with those rules. This is a complete joke.

[Matt Mickiewicz]

No "accept all bids from this buyer". Each bid to be approved manually (though there is contradictory information on this)"

I can confirm that this does exist.

"Feedback they seem to have forgotten or intentionally ignored:
- More transparency"

What would you like to see?

- listing for adult sites (#3 most popular request)"

As mentioned on the uservoice page, we have absolutely no intention of entering the market. It's not in line with who we want to be as a company at this point in time.

I predict it will be a huge success and for those *****ing aout the fees - do you expect them to develop this stuff for free just so you can all benefit for nothing???

Thanks for the kind words. This is just the very beginning, there's many more great features and improvements in the pipeline.

So if I sell a site for $10k and the buyer backs out (this happens ALL THE TIME), I still owe sitepoint $500?

A success fee is based on a successful sale i.e. you receiving $ from the winning bidder.

[AdamWB]

Originally Posted by Matt Mickiewicz

A success fee is based on a successful sale i.e. you receiving $ from the winning bidder.

Is there a way for sitepoint to verify that the winner received the money?

Also - Is there some process to go through to notify sitepoint that the sale was unsuccessful so there is no fee owed?

Thanks

[tke71709]

Originally Posted by 3Six

So you manipulate the layout to give the impression that every site sells? How is that fair on sellers?

I never said that 3Six.

I was making two points

1) even the sites that are "sold" are often not because the buyer backs out

2) you can't hold a marketplace responsible for stupid sellers.

[tke71709]

Originally Posted by jemple

I predict it will be a huge success and for those *****ing aout the fees - do you expect them to develop this stuff for free just so you can all benefit for nothing???

They have a listing fee, that is where they make money.

To take 5% of a listing sales price, even if the buyer backs out, is in my opinion theft at best.

[tke71709]

Originally Posted by Matt Mickiewicz

A success fee is based on a successful sale i.e. you receiving $ from the winning bidder.

How do you plan on verifying this?

What happens if someone gets the $ and a week later the payment is reversed due to fraud or a month later a charge back occurs?

[AdamWB]

Originally Posted by tke71709

How do you plan on verifying this?

What happens if someone gets the $ and a week later the payment is reversed due to fraud or a month later a charge back occurs?

There really is no way other than one persons word against anothers. At least I can't see any way of them verifying this, unless they have some type of inhouse payment system or escrow service - they don't have access to our personal paypal or bank accounts.

This issue really needs to be looked into. Either don't charge the 5% fee or find some way to reverse it if the buyer backs out. Like I said before - who in there right mind would list their site on Flippa with those rules?

[zipperz]

Sitepiont wants a percentage of selling fees when they are famous for fraudulent buyers?
Good luck with that..

Hmm.. outsource some ghost buyers for $10-$20 a week and make 5% of all sales. ?

Between the 5% of sales and paypal and no paying bidders that is a huge amount of profit in a market that is already down by 50% or so compared to a year or 2 ago.

Where is the next action site going to be? I see a wide open market for a new one..

[benitez17]

jemple, is SitePoint doing 10x the work or adding 10x the value if you sell a $10,000 site as compared to a $1,000 site so that they can justify charging 10x the price? Do you think people who are selling expensive sites are going to want to deal with all of the scam artists here when they have $600 on the line if someone backs out of a sale? Also, do you think someone selling a $500 site is going to want to pay upwards of $75 to sell it? Do you have any points to back up your claim that it will be a huge success, or are you just taking an alternate position to most people here just to keep the debate going?

Why do you think raising the fees is a good idea when they haven't addressed many of the known problems with the current system (whether they want to own up to them or not), and took a couple steps in the wrong direction in my opinion? I certainly don't have a problem with them making money, but this is even more of an incentive for them to hide the fact that most sites listed here don't sell, and many auctions where there is a winning bidder never actually change hands. If you have to list a $10000+ site 3 times to find a real buyer because the first 2 fall through (similar to what happened with this guy here http://marketplace.sitepoint.com/users/303950/profile), then you'll be paying over $1500 for the privilege of dealing with all the deadbeats here, plus all the escrow fees, and other costs not related to SitePoint. You really think that is going to go over well?

[3Six]

So you manipulate the layout to give the impression that every site sells? How is that fair on sellers?

I meant that Sitepoint manipulates the listings and removes all the unsold sites in the listings so it gives a false impression to people that all sites here sell. That's deceptive surely?

I was making two points

1) even the sites that are "sold" are often not because the buyer backs out

2) you can't hold a marketplace responsible for stupid sellers.

Your #1 surely actually makes Sitepiont look better than it deserves. Taking all the plusses and removing the minuses is sly and unfair.

Your #2 is something I don't understand. I'm not wanting to hold anyone responsible. I just want them to stop fiddling the figures. It looks like fraud to me.

Are you saying places like eBay don't have stupid sellers... or that people hold these marketplaces responsible for all the listings that were unsuccessful? Places like eBay don't feel any need to list succcessful sales and remove the ones that didn't sell. Maybe this is something that the Australian equivalent of Trading Standards should be investigating. It's clearly designed to mislead customers (and take their money on false pretences)

[FruitMedley Post]

@ Matt

(About transparency) What would you like to see?

What 3Six said. That's a big deal.

Also, some system of recording non-paying bidders. Feedback doesn't do the job especially as some transactions take longer than 30 days to effect - so one can't leave feedback (that's typical for the larger transactions I normally am part of). Non-payment can be either party's fault but it needs to be visible. Buyers who typically jump in without DD and then pull out later are just as risky to the seller as mischievious buyers who have no intention of paying.

I could come up with more useful suggestions for you but I don't know if it's worth it, I get the impression that you aren't really listening

[tke71709]

Originally Posted by 3Six

I meant that Sitepoint manipulates the listings and removes all the unsold sites in the listings so it gives a false impression to people that all sites here sell. That's deceptive surely?

3Six, you're getting no argument from me on that.

My points that were made had nothing to do with that but rather cautioning Fruit's use of sales made as a benchmark of success for auction sites.

[tke71709]

Originally Posted by FruitMedley Post

Buyers who typically jump in without DD and then pull out later are just as risky to the seller as mischievious buyers who have no intention of paying.

Using the site example that I was talking about earlier in this thread.

The seller got a 5k bid from a buyer (who eventually backed out). The buyer didn't even know how to transfer a domain name or how to get hosting.

You get a lot of clueless people here trying to get rich buying sites. Great for SP and sellers, but lousy if you have to pay a success fee for these non-successful sales.

[zipperz]

Originally Posted by tke71709

but lousy if you have to pay a success fee for these non-successful sales.

Seriously paying %5 for non-paying bidders on sitepiont.

They should rename it to “Sitepiont Casino” “Place your site here everyone’s a winner..”

Then with the name fillpa? Hasn’t the site flipping bubble already popped.?

Will they run articles on how to become rich with $35 MFA sites?
Buy a $35MFA site for $100 relist it 3 times on sitepiont for $130 never resell it.

Retire selling ebooks?
Buy a $40 ebook site for $2000 then try to resell it on sitepiont for 2 years at a cost of $1200 before you call it a loss.

Where will these suckers come from?

[3Six]

I predict that this is going to fail

Maybe Sitepoint is playing a different game: Get everyone all worked up about the 5% success fee, generate some buzz... then back down and claim the good guy mantle.

I agree, Flippa is a dumb name. And it's downmarket. They'd have done better to choose a name associated with "online businesses for sale" rather than "C'mon, guv, you can make a quick buck".