Talk with the Experts:
Buying & Selling Websites & Domains – Transcript

Sarah Hawk
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Today I had the pleasure of hosting Flippa’s Luke McCormack in our Talk with the Experts chatroom. We were discussing the ins and outs of buying and selling websites, domains and (now that Apple have changed their T&Cs to make it possible) iOS apps. Luke offered up a number of tips including how to use Flippa to get an idea of the value of your own site.

A few useful resources came out of the session, and to save you having to filter through the transcript, I’ve distilled them into a list here:

Centurica will put together a report on your site including a high level valuation.
Website Outlook will give you an estimated value
Impossibility and Lean Domain Search are both great places to find available domains.
Flippa’s Selling Guide
And their Buying Guide
How are Websites Making Money? An interesting slide show (with stats) from Flippa

If you missed the session today because you didn’t know about it, you can check out the upcoming schedule and sign up for email reminders here. Next up is PHP at 2:30pm PDT on Wed 15 Oct.

And lastly, here is a full transcript from this morning for those of you that are interested in what went down. Happy reading!

[21:57] <info337> are we set to go
[21:57] <HAWK> We sure are
[21:57] <HAWK> Do you have a question?
[21:57] <steve> I’m a domain name hoarder. Wondering if I can make it a profitable disease.
[21:58] <HAWK> Welcome to those of you that have just joined. We’re just kicking off now.
[21:58] <LukeMcCormack> Hi steve, you sure can. We’ve sold a bunch of really great domains on Flippa
[21:58] <LukeMcCormack> Recently we sold StockPhoto.com for $250k
[21:58] <Jerry> Sounds like it could be an expensive hobby if you aren’t actually selling them, Steve
[21:59] <HAWK> Welcome Kevin – we’re just starting with a question from Steve: I’m a domain name hoarder. Wondering if I can make it a profitable disease.
[21:59] <HAWK> What would be the best approach in Steve’s case, LukeMcCormack?
[22:00] <LukeMcCormack> My advice to Steve would be to have a look through his current portfolio and pick a few quality domains to start with.
[22:00] <HAWK> What qualifies as a quality domain?
[22:01] <Jerry> What type of demand do you foresee for domain names in the new TLDs that are already taken in .com, etc and not subject to preemption by trademark holders, etc?
[22:01] <hiddenpearls> My first question is how I can know the real values of my domain like my domain is imblog.info
[22:01] <LukeMcCormack> Start with a dot com – the fewer words/letters the better.
[22:02] <LukeMcCormack> For example one word domains are in super high demand at the moment.
[22:02] <Jerry> supercalifragilisticexpialidocious.com
[22:02] <HAWK> heh
[22:02] <steve> Thanks, guys. Rationality is a novel approach.
[22:03] <HAWK> On what basis do you choose domains to buy, steve?
[22:03] <LukeMcCormack> Jerry interesting question – re the new TLDS; they’re obviously going to flood the market a bit.
[22:03] <LukeMcCormack> But if you can grab a few decent quality ones early they’re bound to increase in price in the future.
[22:04] <steve> HAWK, generally compound words with some notion of product potential
[22:04] <LukeMcCormack> There’s always going to be demand for aged, one word domains which will certainly outlast the new TLDs
[22:04] <hiddenpearls> What do you guys think about the values of .JOBS domains ?
[22:04] <steve> e.g. “crawlforit.com” as a pub crawl planner and documenter
[22:05] <HAWK> Ha, love it.
[22:05] <LukeMcCormack> hiddenpearls picking the value of a domain is always hard. My advice would be list on Flippa with a reserve that you would be comfortable selling at and then see how the marketplace values it.
[22:05] <HAWK> Welcome to those of you that have just joined. We’re currently talking about how to assign a value to a domain
[22:05] <LukeMcCormack> Ideally set a low opening bid price – which will give you a good idea of market value based on where bidding stops.
[22:06] <HAWK> But can you do that if you don’t actually want to sell, LukeMcCormack?
[22:06] <hiddenpearls> LukeMcCormack, ok
[22:07] <LukeMcCormack> HAWK if you don’t want to sell then I probably wouldn’t worry about listing on Flippa.
[22:07] <Franz> hi everyone
[22:07] <Jerry> Hawk – why bother if you don’t want to sell?
[22:07] <hiddenpearls> just to get the value, Jerry
[22:07] <Jerry> Hi Franz
[22:08] <hiddenpearls> if we get some good price … then its better to sale :)
[22:08] <HAWK> Jerry – if you wanted to know the approx value of your site but weren’t nec ready to sell it
[22:08] <HAWK> Hi Franz – welcome. Jump in with a question at any time (if you have one). I’ll queue them for Luke if necessary.
[22:08] <LukeMcCormack> hiddenpearls Centurica http://centurica.com/ can put together a report for you which will outline a few details of your site. They can also give you a high-level valuation if you’re interested.
[22:08] <Franz> I just joined. Maybe the question is already answered. How Can I evaluate a site?
[22:09] <hiddenpearls> LukeMcCormack Thanks
[22:09] <HAWK> That’s what we’re currently discussing Franz Centurica http://centurica.com/ can put together a report for you which will outline a few details of your site. They can also give you a high-level valuation if you’re interested.
[22:09] <LukeMcCormack> hiddenpearls coming back to the value of .JOBS – again really difficult to pick how the market will value any given asset.
[22:10] <LukeMcCormack> Another little trick on valuations is to use the advanced search on Flippa.
[22:10] <kaybee> Wouldn’t buying and selling domain names only be for those really in that game? Can’t see the sense in picking up a few domains just ‘in case’ I could sell them off later on?
[22:10] <LukeMcCormack> Have a look for similar domains/sites to what you’re keen to sell and then make a call based on that data
[22:10] <hiddenpearls> LukeMcCormack, I think .JOBS will be valuable for outsource sites like elance,freelancer etc
[22:11] <HAWK> Good tip
[22:11] <LukeMcCormack> hiddenpearls agree with you there. Certainly a market for those type of sites.
[22:12] <LukeMcCormack> kaybee I tend to agree with you. Generally if you’re just starting out a great place to start is with a few established sites that are making a few dollars and build them up from there.
[22:12] <HAWK> kaybee – perhaps we could ask steve why he does it?
[22:12] <LukeMcCormack> kaybee the one-word dot com domain game is certainly a hard one to get into now without a lot of cash.
[22:12] <kelman> http://www.websiteoutlook.com will give you an estimated value
[22:12] <steve> I was just going to say “i do it all the time” lol
[22:13] <steve> I’m a dreamer.
[22:13] <HAWK> Thanks kelman
[22:13] <Tim> Do you think it’s better to build a site under a domain, so it builds some Google equity, or would it be better to have the domain free of any previous associations (i.e. website) to it?
[22:13] <kaybee> I’ve been building sites for a number of years now but buying and selling domain names I wouldn’t even consider – it’s not my core business – I would only contemplate doing so if I had a separate business for that purpose.
[22:14] <HAWK> Have you had any success so far steve?
[22:15] <LukeMcCormack> Tim building a site on a quality domain will give you some good Google juice and also means you have a decent asset to fall back on. However if you build a quality, online business it generally doesn’t matter what the domain is.
[22:15] <kaybee> Steve, so is the buying and seliling of domains a major component of your business?
[22:15] <LukeMcCormack> Tim for example talking about our high-end of the marketplace, it’s all about the numbers there rather than the domain itself. Just as it would be with any quality, established business.
[22:15] <steve> kaybee. I buy, I don’t sell. Unfortunately, every domain I buy has a product idea behind it. So I get attached to potential.
[22:16] <HAWK> LukeMcCormack when you say a quality domain, do you mean one that has previously been used, or a new one?
[22:16] <kaybee> LukeMcCormack – agreed – new clients always think they can just buy that domain, not true any more!
[22:16] <kaybee> steve – ah – understood!
[22:16] <LukeMcCormack> HAWK when I say ‘quality domain’ I’m talking about a one/two word dot com domain. Like remix.com for example: https://flippa.com/2977014-remix-com-ultra-premium-domain-brand-for-music-video-social-tech-rare
[22:17] <HAWK> I’m seeing a lot of .io domains popping up in our industry (web dev). Any idea why they are suddenly taking off?
[22:17] <HAWK> Right, so whether it has been previously used for another site is of no relevance?
[22:18] <brandon> Hello
[22:18] <LukeMcCormack> HAWK I don’t have a huge amount of insight there – but it’s probably a case of popularity. Once a trend gets going, it can often become the norm.
[22:18] <kaybee> So are we all talking here about buying domains then attaching websites to them based on a particular product/service?
[22:18] <HAWK> Hi brandon – welcome
[22:18] <steve> There’s an awful lot of marketing BS on that remix.com description for a “sure thing” domain name
[22:18] <HAWK> If you have questions, jump in at any time
[22:19] <LukeMcCormack> HAWK no that does matter. It’s always important to have a look at what a site was previously before investing in it.
[22:19] <LukeMcCormack> For example if it’s just been parked for 10 years vs if it was some kind of site for that period of time.
[22:19] <LukeMcCormack> Depending on what you’re looking to do with it – both have different values
[22:19] <steve> does flippa automatically generate the marketing copy, or is that up to the seller?
[22:20] <LukeMcCormack> steve no – that’s the seller. Just like on ebay.
[22:20] <LukeMcCormack> We give the sellers a blank page and they go from there.
[22:20] <steve> Thanks, LukeMcCormack
[22:21] <kaybee> So I’m now thinking…. dream up a product/service….. create a base themed website…… find a domain to suit……buy that……package it all together under my reseller hosting and voila!!! mmmmm…….
[22:21] <LukeMcCormack> We’ve just redesigned our header to bring a bit more attention to our domains. We now have a dedicated ‘Domains’ tab/list. Here’s the link: https://flippa.com/buy?type=domain
[22:21] <LukeMcCormack> kaybee sounds good to me. My advice would be do all that, then run the business for a min of 6-12 months.
[22:22] <LukeMcCormack> Build up a good base of revenue, users and traffic and you’ll have something decent to sell.
[22:22] <kaybee> Something I could do in my ‘free time’ !
[22:22] <steve> Oh…. only $9k for iheartu2.com… hoarding trigger
[22:22] <LukeMcCormack> Quality business are always in high demand on Flippa
[22:22] <LukeMcCormack> steve :)
[22:23] <HAWK> steve – I hate domains that you have to spell out to people
[22:23] <kaybee> I’m liking this idea….. sites could be simple but ready for clients to just input their material….. would save me having to custom build websites all the time!
[22:23] <brandon> Luke, know of anyone who has sold iOS web apps on flippa?
[22:23] <steve> like r8ti8r.com
[22:24] <LukeMcCormack> brandon absolutely! We’ve just launched our iOS section of the marketplace and we’re seeing some great results so far
[22:24] <brandon> What about an app with no revenue?
[22:24] <LukeMcCormack> brandon if you use our ‘Advanced Search’ functionality you can drill down into the detail on all the sold iOS apps. Give me a min and I’ll grab you a link
[22:24] <kaybee> LukeMcCormack – some great names in there!
[22:25] <LukeMcCormack> brandon here’s a quick list – a few decent sales; $7k, $5k etc: https://flippa.com/buy/search?q=&format=all&status=won&age_min=&age_max=&revenue_min=&revenue_max=&profit_min=&profit_max=&type=app&price_min=&price_max=&hits_min=&hits_max=&uniques_min=&uniques_max=&googlelinks_min=&googlelinks_max=&pagerank=&alexa=&downloads_min=&downloads_max=&tld=&sort_col=relevance&sort_dir=asc&search=Search+Listings
[22:26] <steve> LukeMcCormack why are some listings in light yellow, and some in white?
[22:26] <LukeMcCormack> steve those are different upgrades we offer
[22:26] <LukeMcCormack> The light yellow, large screenshots, etc can all draw more attention to your listing
[22:27] <LukeMcCormack> I always recommend a screenshot
[22:27] <islander1988> Hello. Just remembered the chat had started. :)
[22:27] <HAWK> No probs. I’ll post up a transcript later so you can see what you’ve missed.
[22:28] <LukeMcCormack> steve we package those upgrades in a few different ways
[22:28] <hiddenpearls> buyer gets the source code of iOS App ??
[22:29] <LukeMcCormack> hiddenpearls yep it’s usually everything associated with the site/business/app which is sold.
[22:29] <LukeMcCormack> But always ask just in case :)
[22:29] <steve> is there a way to sort by domain name length, LukeMcCormack?
[22:30] <LukeMcCormack> steve unfortunately not by length. But you can certainly filter by .com etc
[22:30] <dimilow> on selling websites, what are the reasons these owners want to sell their sites?
[22:31] <brandon> LukeMcCormack, So I made an app its a “Smoking Game” using a lot of elements of popular drinking games. As far as I know its a completely original concept for a game. But of course apple rejected it… So I have released it as a free web app/android app. Not really sure what the best route from here is. Any thoughts? You can view it here www.hitorquit.co
[22:32] <LukeMcCormack> dimilow it varies. Often it’s a case of owners/creators/founders not have the time or resources required to keep the business running.
[22:32] <LukeMcCormack> Some want cash for other startups/investments
[22:32] <LukeMcCormack> Others are just tired of running the site/business and are looking for a change.
[22:32] <brandon> Its a quality game with a HUGE potential niche market with no competitors. Just having a hard time bringing it to them. Especially with the recent change in laws for WA and CO
[22:32] <LukeMcCormack> I guess it’s similar to any business sale.
[22:33] <LukeMcCormack> brandon the big challenge for you is getting it past Apple.
[22:33] <steve> brandon, smoking what? 
[22:33] <HAWK> That’s because they’re all asleep brandon ;)
[22:33] <brandon> Anything really 
[22:33] <LukeMcCormack> My advice on that would be continue making the required changes to get it into the iOS app store and then your chance of selling it will greatly increase.
[22:33] <steve> I like “anything,” brandon. Very flexible.
[22:33] <brandon> the game doesnt specify anything. Its a really clean modest design
[22:34] <brandon> no weed leafs or tacky design
[22:34] <brandon> apple is a brick wall. they basically just said no and didnt give me any possible route to getting it in the store
[22:34] <HAWK> I’m not sure you’d ever get it past Apple though, would you?
[22:35] <brandon> this is ALL they would state as a reason
[22:35] <brandon> Apps that encourage excessive consumption of alcohol or illegal substances, or encourage minors to consume alcohol or smoke cigarettes, will be rejected
[22:35] <LukeMcCormack> brandon that’s tough then. Without getting it into the Apple app store there’s not a clear avenue to market for a new owner.
[22:35] <LukeMcCormack> That’s if we’re only talking iOS apps of course :)
[22:35] <LukeMcCormack> HAWK brandon it’s hard to get apps past Apple at the best of times.
[22:35] <brandon> https://itunes.apple.com/us/app/drinking-games/id490079741?mt=8
[22:36] <brandon> this is just one of many “drinking game” games in the store
[22:36] <steve> brandon, the difference is that drinking is good for you
[22:36] <HAWK> LukeMcCormack – how important do you think it is to own the .com these days? For instance, if I was launching a startup and the .com wasn’t available, do you think it’s worth revisiting the name?
[22:36] <brandon> steve, haha funny….
[22:37] <brandon> Good question HAWK
[22:37] <LukeMcCormack> brandon just to finish that question – our marketplace takes data from the iOS app store as part of the listing. So you wouldn’t be able to sell it via Flippa as an iOS app.
[22:37] <LukeMcCormack> But you might be able to sell it as a project/site
[22:38] <LukeMcCormack> It all depends on how much interest you could generate
[22:38] <brandon> Yea, hoping to maybe have some better luck in a few months
[22:38] <steve> yeah, brandon, could you pivot that into a subscription web app?
[22:38] <LukeMcCormack> HAWK the best startup advice is always to try to grab a .com – helps a lot with SEO, etc. But it’s certainly not essential
[22:38] <LukeMcCormack> There’s a lot of great business that don’t have a .com domain
[22:39] <HAWK> Helps with SEO in what way? Do people actually type in domain names any more?
[22:39] <brandon> I tried that Steve but its hard enough getting people to download the app
[22:39] <steve> aye. good luck, brandon
[22:39] <LukeMcCormack> HAWK if the .com wasn’t available – I would probably revisit the name
[22:39] <steve> LukeMcCormak, are hyphens still verboten? This 2-year old article warns against them http://blog.silktide.com/2011/06/how-one-tiny-hyphen-destroyed-our-seo-efforts/
[22:40] <LukeMcCormack> HAWK here’s a couple of great places to start to look for available domain names: http://impossibility.org/
[22:40] <LukeMcCormack> http://www.leandomainsearch.com/
[22:40] <HAWK> Thanks
[22:41] <LukeMcCormack> I really like leandomainsearch.com because it gives you a really clear list of options, rather than trying to sell you hosting, other domains, etc
[22:41] <HAWK> I’m still interested in the SEO comment that you made. How does a .com help with SEO these days?
[22:42] <LukeMcCormack> steve SEO is such a hard game – Google moves the goal post every few weeks at best.
[22:43] <steve> good point, LukeMcCormack. Focus on content
[22:44] <LukeMcCormack> HAWK I’m no SEO guru – but for some reason Google gives .com more love than other domains. Obviously they’ll serve up the best possible results but if a .com and another domain are equally weighted in terms of relevance (from what I understand) the .com will rank higher.
[22:44] <HAWK> Ok, thanks. :)
[22:45] <LukeMcCormack> The other thing to think about from an SEO perspective is if you’re logged into your Google account you’ll see different results in comparison to other users.
[22:45] <HAWK> And the majority of people are logged in these days I would have thought
[22:45] <LukeMcCormack> I’d say so yep
[22:46] <LukeMcCormack> I know I’m always logged into Google, Facebook, Twitter, etc. which means I get served up results based on all that activity.
[22:46] <HAWK> I think we have a gap in questions, so now is the perfect time to jump in if you’re sitting on one.
[22:47] <LukeMcCormack> If you’re new to ‘Selling’ on Flippa here’s a great PDF resource we’ve created: https://flippa.com/documents/sellers-guide.pdf
[22:47] <LukeMcCormack> And if you’re new to ‘Buying’ here’s our guide on that: https://flippa.com/pro-guide-to-buying-websites.pdf
[22:48] <LukeMcCormack> Free ebooks right there! :)
[22:49] <hiddenpearls> :)
[22:50] <LukeMcCormack> Here’s a few interesting stats we put together early this year on different niches, site types, number, etc: http://www.slideshare.net/Flippadotcom/how-do-websites-make-money-16613130
[22:51] <LukeMcCormack> In terms of buying – always make sure you do a heap of research and due diligence, just as you would with any investment.
[22:52] <LukeMcCormack> On each listing page we offer a dedicated ‘due diligence’ page with a bit of data on each listing
[22:52] <LukeMcCormack> You’ll see that in the middle of the screen on any listing, just under the ‘Backlinks’ heading
[22:53] <dimilow> Are there people or companies build websites for selling them off later?
[22:53] <LukeMcCormack> dimilow certainly do.
[22:54] <LukeMcCormack> We have a few sellers who build and sell on a regular basis.
[22:55] <dimilow> what is the right time to sell? base on visit hits? monthly income?
[22:55] <LukeMcCormack> dimilow the best time to sell is often based on age of the site.
[22:55] <LukeMcCormack> For example we have a lot of buyers who won’t consider buying anything that’s less than 6 months old
[22:56] <LukeMcCormack> The reason for that is often is difficult to prove the market on any business without a good 6 months worth of sales data.
[22:56] <HAWK> We only have a few minutes left in the session people. If you have any questions, make sure you get them in now.
[22:57] <LukeMcCormack> dimilow in terms of a valuation – we generally see quality businesses sell on Flippa for around 12-18 x monthly profit.
[22:57] <steve> LukeMcCormack, what percentage of sold domains generate exclusively ad revenue, as opposed to products or services?
[22:57] <LukeMcCormack> steve we see a lot of businesses which are monetised via advertising.
[22:58] <steve> Most?
[22:58] <LukeMcCormack> steve probably not most, but it’s a good percentage.
[22:59] <steve> ok. Thanks, LukeMcCormack. (I’m only creative enough to maybe generate traffic, not products or services :)
[22:59] <LukeMcCormack> In terms of a ranking – Ad revenue is probably the strongest, followed by ecomm type sites (products/services)
[23:00] <LukeMcCormack> steve it’s actually not a bad strategy – if you can generate traffic, others will see value where they can add the product/services component of the business.
[23:00] <HAWK> And… that’s a wrap, unless anyone has anything urgent. :)
[23:00] <LukeMcCormack> The good news is where you can add value, someone else will be able to add additional/different value.
[23:00] <LukeMcCormack> Thanks everyone for you time!
[23:00] <HAWK> Thanks so much for your time this morning Luke. Much appreciated.
[23:00] <LukeMcCormack> Much appreciated.
[23:00] <hiddenpearls> Thanks guys
[23:00] <HAWK> I’ll post a transcript up later today on SitePoint
[23:00] <LukeMcCormack> Hit me up on twitter if you have any other questions: @lukemccormack
[23:01] <LukeMcCormack> Always happy to have a chat

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