Blake Hutchison is the CEO at Flippa. If you’re not familiar with Flippa, it’s the top platform to buy and sell digital and online businesses such as websites and apps. Originally an offshoot of Sitepoint, Flippa offers services such as FlippaFinder to help first time buyers acquire a business. They have partnered with select brokers to help those tight on time or need help figuring out where to start. While very well known for the platform of selling developed, money generating websites, Flippa is also a platform for selling domain names.
Mike: Flippa really created the space for selling websites and online businesses. How have you been able to maintain that hold as the leader in the industry?
Blake: Thanks Mike. We are lucky actually. We have an outstanding community that continues to use the platform and rely on it as a place to successfully buy and sell. This community is the #1 reason why we are the dominant player in this space, and we are growing!
Flippa has made it simple. Asset owners, investors and acquirers are mostly comfortable engaging with each other and so what we have focused on is connection. Flippa connects asset and business owners with buyers around the world. The community is powered by creators, makers, entrepreneurs and business owners who are either looking to buy or sell.
Mike: Can you share some stats such as number of users, sales volume, etc?
Blake: In 2019, we sold 16,771 assets. We have over 1.5m users but in 2019, 45,000 new buyers joined and created specific preferences. We learned a lot about what buyers want from this new group and we’re making some significant product enhancements over the coming months to satisfy this demand.
Incredibly there’s about $20bn in registered buyer intent on Flippa.
Mike: How do you verify seller claims as far as revenue and business operation from sellers? Is there any form of protection for buyers?
Blake: Absolutely. There are a few things. Firstly, users can connect Google Analytics, Google Ad Sense and Quickbooks data. This data is coming straight from the source and helps buyers to assess businesses through that initial discovery phase. We’ll be adding additional sources shortly.
Revenue and expense verification are critical. We understand that. It’s critical that buyers recognize that regardless of where you buy it is the buyer’s responsibility to conduct due diligence. We’ll make that super easy over time, but responsibility will still rest with the buyer.
Flippa also has an Escrow integration. This is the best protection there is. There’s an inspection period before payment release. Like any high value purchase, buyers should absolutely ensure that they have received what they have paid for.
Mike: What improvements can we expect from the site tools? Any planed enhancements to your search feature for example?
Blake: Yes. Search is being worked on now. There are big changes and improvements to come. We see 10.4m search queries monthly. It’s insane. We know we have neglected this, and we’re excited to see what the community thinks of our improvements.
We are committed to building features that enable sellers to list assets without friction and features that connect buyers with the right assets. Central to this is quality.
Mike: Just as some folks are masters at listing on eBay, are there any secrets or obvious techniques that sellers use to improve the likelihood of selling or getting views on Flippa?
Blake: Some sellers know all the tricks.
First there’s the obvious stuff. Assets need to be priced reasonably, listings need objective level detail – facts and figures vs projections (and sweeping statements) and responsiveness is key. Don’t ignore interested buyers.
Then, there’s the platform quirks. You should comment on your own listing. When you do the community is notified. And, you should list as an auction. The Flippa Saved Search feature is used by thousands of buyers and many have set their search preferences to cover auctions only.
Mike: While the initial focus has been on selling websites, there was an increase in attention on domain name listings beginning in 2015. Has that focus shifted back away from domains?
Blake: We still support domainers but to some extent the market has shifted. We used to own a domain brokerage. We owned a website brokerage also but have divested away from both. As a marketplace, Flippa goes where the community goes and while we still see lots of domains listed and we still have a big buyer base, we see more demand for and value in other digital asset sales.
Mike: As a platform for selling domain names, I’ll be honest, the $10 to $65 seems hard to swallow when there are other, popular free services. Are there any statistics on the success rate of selling names on Flippa vs other platforms?
Blake: We understand. A free listing service really impacts quality. Our new search functionality will see the best rise to the top, so we’ll assess how that goes before playing with pricing again.
As far as statistics go, I can’t speak to other platforms, but you may find this interesting (and somewhat obvious) –
a) Domains with a character length of 4-9 characters sell for 3-4x what others do.
b) Age implies value. The value doesn’t change much from 0-10 years but after that they really take off. They sell for 5-25x the value. This is expected given the quality of domain names available 10+ years ago.
c) Dot Coms are the most value but most surprising is that .io is far more valuable than the rest. After that it goes .org, .net and then a long way off the pace is .co.
Mike: In your experience, is there value to developing a domain name prior to selling? Even if there is no revenue generation?
Blake: Absolutely. We wouldn’t recommend you just sit on a bunch of parked domains. Instead invest in the domain. Domains will increase in value as it receives more viewers and it is referred to.
Mike: With the evolution of the internet, any predictions on the future?
Blake: I think there’s a few things. Americans and increasingly the rest of the world are obsessed by entrepreneurialism. In a recent, UBS Investor Watch report it was noted that half of wealthy investors believe owning a business is one of the most prestigious careers to pursue. This is changing the shape of the economy, small business and wealth creation. It won’t stop.
The next thing I’d comment on is platforms. It’s never been easier to start a business. Half of all sales on Amazon come from third-party sellers and there are over 3,000 new sellers listing daily. There are over 1m active Shopify sites, there are over 2m Adsense sites and over 65% of all bloggers have a product or service for sale. The game has changed. We are not near maturity. This trend is on a rocket ship trajectory and this means that there will be more digital asset / digital small business owners every day. It’s exciting.