Effective today (Dec 13th), we are making the following changes to our fees:
- Website auction listing fees will now be $19 for starter sites and $29 for established sites
- Success fees will now be 15% across all verticals (discounted to 12% when Flippa Escrow is used)
Later this week we will also introduce a $9 listing fee on website classifieds. We expect this to go live on Thursday, Dec 15th.
We aim to provide the best possible outcomes and experience for our users, and we’re confident that introducing these changes will allow us to release even more exciting new features in the coming months.
If you have any questions or feedback about these changes to our fees, please contact our support team by emailing [email protected]. We’re here to help.
Note: These changes only apply to new listings, the previous fees will apply to any listings that are already live.
I recently caught up with Riad Bekhit, owner and self-proclaimed Chief Potato Officer at PotatoParcel.com, after he appeared on ABC’s Shark Tank and secured a $50,000 investment for his spud-powered enterprise. Bekhit acquired Potato Parcel on Flippa in 2015, and he’s since rapidly grown the business, which now generates $25,000+ in monthly sales of…potatoes. See the exclusive interview below for an inside look at Bekhit’s Shark Tank experience and his growing online sensation!
You bought the site on Flippa last year. What motivated you to buy, and why PotatoParcel?
Before acquiring Potato Parcel, I had recently quit my job in software sales. I had several eCommerce projects on the side, but without a 9-5, I also had more free time to began plotting my next big move. When I came across Potato Parcel, I saw great potential, and I knew right away that I wanted to get involved. I was able to negotiate a great deal to acquire the business, so I pulled the trigger at $42,000 and never looked back.
Can you give us any insight into how the business has faired since the acquisition?
The business is doing extremely well. It was instantly profitable and I recouped my investment quickly. We’ve continued to grow sales month over month, despite the many critics who said the site would never succeed. In the 13 months following the Flippa acquisition, we did $215,000 in sales, and things are continuing to accelerate with no signs of slowing down. Needless to say, it’s a great time to be an entrepreneur in the potato industry.
What was the process like applying to get onto Shark Tank?
It was actually quite lengthy. We first applied online and did not hear back from the producers for a few months. When we finally did hear back they asked us to send in an audition tape. Another few months went by after that, and then finally they asked us to come to LA to film the show. After filming, we were on edge because we weren’t guaranteed to air on TV, even though we pitched in front of the sharks. We were really hoping to air and were ecstatic when we heard we finally made it!
Once you were accepted, how did you prepare and come up with your your pitch?
We wanted to make our pitch fun, just like our product and company. So we decided to walk into the tank with potato costumes, sun glasses, and whip out potatoes from our back pocket. We also gave the sharks some funny potatoes too.
Riad (left) and PotatoParcel founder Alex Craig (right) pitching the business on Shark Tank
Did you go into it with any specific Sharks you wanted to do a deal with?
To be honest, we went into this not really knowing if we would even get an offer from any of the sharks. It can be a bit of a crapshoot sometimes with Potato Parcel, some people really get the business and love the idea, and others just think it’s a joke. That said, I did think Kevin (AKA Mr. Wonderful) would be interested, because of our high profit margins and the fact that he has invested in companies that sell customized products in the past.
What was it like pitching live to the sharks, and how did you deal with the nerves?
It was a lot of build up and preparation. Going through our pitch over and over again. Studying our numbers. Thinking of anything that sharks might ask us and having a solid answer for that. We were nervous for sure. A lot of heavy breathing. But once we started talking about our business it became more like a natural conversation with the sharks and the nerves subsided. That’s not to say it wasn’t intense, but the amount of preparation we put in really did pay off in the end.
Alex negotiated a royalty prior to selling you the business, can you tell us about that?
Alex sold 100% of the business to me on Flippa. However, as part of the sale we agreed that if the business was able to get on Shark Tank he would receive $1 from every potato sold for sixty days following the air date. Why did I agree? I owe Alex great credit for getting the initial traction in the early days of the business, and I also knew Shark Tank would provide a great platform to get the business in front of more people. Because of his contributions and the potential upside of the deal, the royalty was a no-brainer, and in the end Alex’s influence definitely helped us land a spot on the show.
You ended up with two sharks fighting over you, why did you go with Kevin over Robert?
It really just came down to their offers. When the other sharks backed out, Kevin O’Leary’s final offer was $50,000 for a 10% stake and a $1 royalty fee for up to $150,000. Robert Herjavec’s final offer was $50,000 for a 17.5% stake. In the long run, I though Kevin’s deal was the ultimately going to be the better deal (after the royalty gets paid off.) He is also a funny guy who really loved our quirky idea, and I think that because of his passion, he’ll be incentivized to continue to help us grow.
“The Queen of QVC” Lori Greiner (Left) and digital security mogul Robert Herjavec (Right) enjoying the sample products
What’s it been like working with Mr Wonderful since the show aired?
As of late, I have mostly been dealing with his PR and social media team. That’s one of the benefits of doing a deal with a shark like Kevin, he’s got a mountain of resources behind him and a lot to offer beyond the dollar signs. I’ve also had several calls with him since the show aired, and I’m excited to continue to grow the business with him moving forward.
What’s in store for Potato Parcel, and how can people follow what you’re up to?
We want to come up with new products, have more international ambassadors join our team, and possibly expand into a business including many quirky and funny gifts. But for now, we remain focused on our core offering, selling potatoes with customized messages inscribed on them. If people want to check in on the company, the best place is our official twitter. As for me, I currently work full-time on Potato Parcel and I see myself doing this for as long as possible! I’d prefer to always work for myself, and I prefer to do that selling…potatoes.
App Reskins – What does it mean?
As the largest marketplace for buying and selling both iOS and Android apps, we’ve noticed a lot of inquiries generated around the topic of app reskins. In this post, we’ll answer your questions like “What is an app reskin?” and “Are reskinned apps safe to buy?”
What is an App Reskin?
An app reskin is taking an app and making an identical copy of the source code to make it look different from the original. The source code of both apps remain 100% identical, with the change only being in that of the logo and designs.
For example, if you owned the source code to the popular app Angry Birds, you could create a reskin copy called Crazy Cats, where you launched kittens out of a slingshot to hurt mice. While the game would look differently, the source code would remain completely the same, with the only change being to the graphics of the game.
The reason we require all mobile app sellers to clarify if they are selling a reskinned app is to let buyers know if there might be another app that is near identical to theirs.
It’s important to note that buying a reskinned app isn’t necessarily bad. There are many reskinned apps on the marketplace that do very well. That being said, if you buy a reskinned app, there is nothing stopping the owner of the source code from turning around and making 20 apps that are nearly identical to yours.
Looking to Buy a Reskinned App?
Now that you know what an app reskin is, as well as the potential pitfalls, it’s important to understand what you can do to mitigate any risk on your part.
The first thing is to check to make sure the seller has the right to sell the source code. If the source code was licensed, there is a good chance that they do not have the right to sell the source code. If you’re unsure if the seller is allowed to be selling an app, and they cannot provide you with proof, please report the seller and we will investigate the issue further.
As mentioned earlier, one of the big drawbacks of a reskinned app is there can be a near identical copy of your app out there on the marketplace. This can create a competitive nightmare for you in the future, as the seller may also be selling different versions of your reskinned app. To combat this, you may want to discuss with the seller to gauge the impact of the reskinned app competition. Things to look out for include: The number of reskinned apps, and how that may impact your app’s future performance and revenue. One suggestion is to utilize certain contracts, such as a non-compete, to limit the level of competition from the seller.
So, Are Reskinned Apps Safe to Buy?
Simple answer, yes! As long as you are aware of the potential pitfalls of a reskinned app, these operate the same way (and are not any less safe) than a non-reskinned app. Reskinned apps require a lot more due diligence for the buyer, but they can also be found for a fraction of the price compared to a uniquely coded, non-reskinned app. If you don’t have much money to spend, reskinned apps can provide a great introduction into the apps marketplace.
Regardless of if an app is reskinned or not, it is always recommended to perform your due diligence and research on if an app is right for you. Buying an app is an investment. Apps can provide tremendous revenue and can be a great source of alternative income.
For a more detailed guide on app due diligence, look out for our Apps Due Diligence Guide, which is coming soon to the Flippa blog.
Today we sit down with app entrepreneur Michael Patzer, who has completed 9 successful Flippa sales with a 100% positive feedback rating. In this interview Michael gives us the inside scoop on his latest sale, a $10,000 app portfolio, while also sharing insightful tips and strategies others can use to achieve success selling apps on Flippa.
What lead you to become an iOS App Developer?
I studied Finance at the University of Southern Indiana and graduated in 2009. In 2010, I started learning how to develop iOS apps. It didn’t take long before I was hooked, and I decided to make a career out of it. Since then, I have built and sold more than a dozen apps, and I’m currently employed full-time as an iOS Engineer at an e-mail marketing company.
What are some of the apps you’ve sold on Flippa?
I have always enjoyed building both useful and fun apps, and the apps I sell typically follow this trend. For example, I built and sold County Finder, a location app which allows users to quickly and easily look up counties via search or maps. I have also built and sold game apps, such as Word Frenzy, a fun word building game. In addition to games, I also enjoy building functional utility apps such as a text language translator app that I sold for $800, as well as an audio recording and playback app that I sold for $600.
Tell us about your recent $10,000 app portfolio sale
The portfolio was composed of 4 adventure and lifestyle apps: Alti, Ella, Zen Habits, and Life Hacks. Alti is an altimeter and compass, while Ella tracks elevation changes over time (e.g. for hiking & road trips). Zen Habits displays up to date content from the famous Zen Habits blog in a minimalist style, and Life Hacks gives users a feed of thousands of different life tips and tricks for different categories. During the auction the portfolio received more than 60 bids on top of nearly 100 watchers, and it was ultimately closed out via Buy It Now (BIN) for $10,000.
What prompted you to sell your app portfolio?
I developed the apps in the portfolio with a business partner of mine who is a mobile app designer. These apps reflect our shared interests and hobbies, and we built them for other likeminded people to enjoy. For us, it wasn’t so much about the money as it was about providing a good user experience. As our real-world careers took off, however, it became more and more difficult to find time for the apps. Rather than earning passive income while they became less relevant, we felt it would be best to find a buyer who would keep the apps updated and continue to improve them.
Why do you use Flippa to sell your apps?
Flippa makes it really easy to create a listing and get instant exposure. There are a ton of people buying apps on the platform (a lot of the website & domain buying audience seem to be interested in apps now too), and Flippa has the lowest commission in the industry by far. All in all, I’ve used Flippa for 9 transactions totaling over $14,000 in sales. As a result, I’ve gained a solid understanding of app valuations and the types of apps buyers are interested in acquiring.
Any advice for other entrepreneurs looking to sell their apps?
One piece of advice would be around iCloud. The main challenge in selling the portfolio was that all apps in it had previously used iCloud, and Apple would not allow them to be transferred. Even removing iCloud didn’t solve the issue. In this case, you will have to sell the entire app developer account along with the apps, and you need to explain this in the listing description. Another piece of advice is to be realistic about app valuations. It’s easy to overvalue something you’ve built, but buyers want an asset that can give them a return on their investment (usually in 1-2 years).
Enjoy reading Michael’s story? Continue reading more Flippa case studies now.
We launched the Flippa Apps marketplace in 2013, and since then thousands of successful App sales have been completed through the Flippa platform, helping us become the largest Apps marketplace in the world.
To date, it has always been free to list an App, and while we remain committed to ensuring that Flippa is an open and easy to use platform for all entrepreneurs, we’ve also received your feedback on the drawbacks to our current pricing model.
This is why we are introducing a $9 App listing fee. We expect that introducing this change will help push low-quality listings away from the marketplace, and increase the exposure received by top quality offerings, providing a better experience for both Buyers and Sellers.
During the coming months, we plan to unveil many new exciting features in the Apps marketplace, and we hope this change will allow us to release even more features as we continue to grow and evolve.
If you have any questions or feedback about this pricing change, please contact our support team by emailing [email protected] – we’re here to help.