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
I think the problem is that there is no real competition and they know it.
They know they offer such a popular platform we can’t really go anywhere else.
And not going anywhere else because they are not popular enough, will keep the alternatives small. A vicious cycle where the only one who wins is Flippa.
Indeed, I was wondering the same. and what do we as a seller get back for that?
I mean, I still have to do my own promotion after listing my domain names and when I make a sale than Flippa takes the whole 15% out of the sale!!
Flippa, don’t help with any promotion for your listing, other than selling
ridiculous high upgrades.
They should cap the success fee, let’s say 15% for everything sold up to $750 or so and than 10% for everything over $750.
Maybe it’s time to look around for other alternatives.
This time they are not even trying to make it look good. They have just raised the prices $10 and the success fee from 10% is now 15%.
Luckily we get a lot of good new things back for this…..right?
Of course not….
$10k is way too much considering they are not doing anything beyond adding the listing. $10k would not even get your website on the home page. That is the crazy part of it all. Imagine paying $10,000 in fees and your website was not even listed in bold!
Wow those fee percentages make up for a HUGE difference. I can see this making them a ton since they’ve already done $100 million in sales. It’s almost like the free to pay model… except just increasing their rates, which they can do because they really are the only solution in town. However, I won’t be listing a $100,000 site to pay a $10k fee any time soon.
I think a lot of people will. They are doing little to justify the fees.
This is ridiculous, I’ll be on the lookout for an alternative as well.
Agreed. Even though I have sold a few big websites there, I never felt like they did enough to justify their fee. I paid extra before for their premium website listing in the past. All I received was an email from a staff member who sounded like he had never even owned a website before. And in his email he said “Yeah your copy is looking great….you should get some bids”. Geeze…thanks for that!!!
It would be a different story if they were doing more for website sellers. I got around 25 page views for a domain listing in December. 25 views for $29. Can you believe that! I would have gotten more views with a free post at Digital Point – I probably would have gotten more bids too. I made a comment about it on Twitter and I got the standard shrug of the shoulders from Flippa. They have passed the point of even giving the impression that they care.
So for them to increasing their fees so much is ridiculous. What are they doing to justify this extra money? Imagine what it must feel like for high traffic websites. Say WP Squared sold for $250,000 (you never know!!). Under the old system, you would have paid $3,029. Under the new system, you would pay $25,019. And these figures assume that you never purchased any listing upgrades. The costs would probably be higher as Flippa listings that don’t get upgraded are rarely seen.
I was active for years on the SitePoint Marketplace and then active on Flippa. But to me, Flippa is now a last restort. I really hope someone with a good marketing budget launches a good alternative that offers fairer prices.
If anything they should have only raised fees for those looking to sell brand new websites & reduced the fees for those selling established sites to encourage better websites onto their marketplace.
The standard of websites for sale have been dropping for years, and to me encouraging those selling great websites to use their marketplace should have been number one priority.
Website brokers with large customer bases will definitely benefit from this change.