A year ago I criticised Flippa about how expensive and ineffective their listing upgrades are. I have never been alone on this matter. Over the years, many active Flippa traders have criticised them for charging abhorrent fees for listings.
My last listing there was a domain listing in December 2013. It worked out that the listing view cost me more than $1 per page view. That’s ridiculous!
Around two weeks ago Flippa gave the standard promotional speech about “listening to their customers” and lowered listing fees. You can read about it fully in their announcement post “You Talked, We Listened: Lower Listing Fees Now on Flippa“.
- Established Websites – Was $29, Now $19
- Domains – Was $29, Now $9
- Apps – Was $29, Now $19
We should all be happy about Flippa addressing their overpriced listing fees. Shouldn’t we?
Unfortunately, their recent announcement post left out two very important details. Firstly, they have doubled their 5% success fee to 10%. Secondly, they have completely removed the $3,000 success fee cap that was there previously.
It does not take a genius to realise that this “Price Reduction” is actually going to cost website and domain traders thousands of dollars.
The listing fee is an important barrier as it keeps lower-end websites that you see for sale elsewhere, off Flippa. It creates an ecosystem of serious buyers and sellers.
You’ll get everything you paid for previously — just at a lower price! That includes our industry leading product, an established and unique marketplace system, awesome customer support and a diverse community buyers all looking to purchase great websites, domains and app.
My last big sale on Flippa was in 2012. I sold my old WordPress blog WPMods.com for $80,000. Under the old pricing system, my total fees to Flippa were $3,029. Under the new system, my total fees would have been $8,019. An extra $5,000 in fees does not seem like a lower price to me. When you add the fees for Escrow and currency exchange losses, a seller would be lucky to get around $68,000 on a website sale of $80,000.
It is not just expensive websites that are going to get hurt by this. Take a small website at $250. Under the old system, the total fees would be $41.50. The fees for such a website would now be $44.00.
Essentially, anyone selling a website for under $200 will save a couple of dollars in listing fees (literally a couple of dollars!). Anyone selling a website for over $200 will be giving Flippa an additional 5% of their sale price under this new pricing scheme.
That is absolutely ridiculous. Flippa are doing nothing to justify this. At those prices, it is much better to simply hire a broker and give them a percentage of the sale. A broker does a lot of work to justify their fee. What is Flippa doing?
I have over $200,000 sales on Flippa, however after this announcement, I do not see me ever selling a large website through them again. It simply is not worth it. Standard listings get next to no views unless you pay their overpriced listing upgrade fees and if you do get a sale, you will have to hand over a whopping 10% of your profits.
Mark 14 January 2014 on your calendar. That is the date that Flippa decided to target the junk website market. Over the next few months, you will probably see an increase in poor websites with no profits and traffic. You will also notice an absence of high quality websites.
Sorry Flippa. You messed up on this one. Big time. It is bad enough that you doubled your fees (more for high quality websites), but to then publish an announcement post that fails to even notify members of this increase is disgusting.
Did you honestly think that website owners would rejoice the fact that the listing fee was going down by $10 when the total fees were increasing by thousands of dollars? Come on – give us a bit more credit than that!
Kevin
