If you have ever tried to sell websites on Flippa (or apps or domains), you have no doubt come across the option to add a Buy it Now price to your listing. For those who don’t know, a Buy it Now price is a price that, when decided upon and implemented by a seller, any buyer can agree to pay in order to immediately end the auction and take the listing off the market. In this article I’ll discuss some Buy it Now tips and tricks as well as discuss a BIN strategy to help you sell websites on Flippa for the maximum price.
Don’t add a BIN too early!
Adding a Buy it Now price too early can be a costly mistake for two reasons. The first reason is that many buyers equate BIN with reserve. Of course, these are two completely different prices as a Buy it Now price is a tool that should be used to stretch buyers out further than they were planning on going; whereas, a reserve price is the minimum amount at which the seller would be willing to accept to part ways with underlying asset. The problem is, if your BIN is much higher than your reserve (as is often the case) and you set the BIN early on in the auction, this may cause buyers who would have otherwise placed a bid on your site to refrain from doing so – this means less exposure in the marketplace and fewer post-auction negotiation participants.
The second reason you want to avoid setting a BIN too early is that you might place the BIN too low. In these cases you run the risk of selling your listing for a price lower than you would have otherwise received had you let the auction run its course. This lesson was ingrained in my mind when I witnessed a website sell on Flippa via BIN for $150,000 a couple of hours after it was listed. Had the seller allowed the full two-week auction to run its course, the site would likely have sold for more than $300,000.
When is the best time to place a BIN?
In my experience the best time to set a BIN is during the final hour of the auction. By this time of the auction you should have a pretty good idea of how the market values your asset. This is also the timeframe when most interested buyers will have their eyes on your auction. More eyes on your auction means a higher chance of a bidding war developing and a higher chance that someone clicks your BIN to avoid one.
At what price should I set my BIN?
Generally speaking, a BIN should really only be used after the reserve price has been met. Otherwise, you run the risk we discussed earlier of scaring away potential bidders at a time when every bid counts. However, assuming your reserve has been met and you have about an hour left in your auction, you should probably set a BIN. Keeping in mind that most sites sell on Flippa for between 1x to 3x yearly net, I usually like to set the first BIN outside of the high-end of this range, because remember, we want to stretch buyers out further than they were planning on going. Say a website I’m selling has hit reserve and was sitting at a top bid of 2x yearly net, which we’ll say is $100. I might start with a BIN price that is 4x yearly net ($200).
Gradual drop in BIN
Once you have set your first BIN, you should begin dropping it in regular increments every 5 to 10 minutes. Going back to the example above, say we had placed an initial BIN of $200, the goal now would be to slowly drop the BIN in regular increments. So with 50 minutes left we might drop the BIN to $175, then with 40 minutes left we might drop the BIN to $150. Each time the BIN is reduced make sure to post a public comment letting everyone know. Remember your goal as a seller is to get the highest price possible for your asset. If, for example, the current top bid is $100, and the top price anyone is willing to pay is $105, you want to get a bidder to pay that price. So, as the auction winds down, creep closer and closer to the current bid price.
One thing to keep in mind: Flippa has an anti-sniping feature that automatically extends an auction an additional hour anytime a new leading bid is placed during the final hour. If this happens on your auction be prepared to modify your BIN accordingly.
ShipYourEnemiesGlitter.com auction: BIN Strategy Case Study
Most people probably remember the auction for the viral sensation ShipYourEnemiesGlitter.com, but what most people might not know is that with 5 minutes to go in that auction the highest bid was $70,000. Following the incremental BIN drop strategy, the seller reduced the BIN gradually from $150,000. With 2 minutes in the auction, the seller dropped the BIN to $85,000 and a buyer executed it seconds later.
Remember this is just one BIN strategy, and there are situations where this strategy might not be the best choice, for instance if a seller needs to sell their website quick. However, for the broad majority of website auctions this strategy should work well.
Do you have your own BIN strategy? Tell me about it in the comments below.
Today we caught up with Paul Wilkins who, along with his business partner Phillip Croy, purchased SeedAndGarden.com for $22,500 on Flippa. Paul tells us how he and Phil got their start buying websites and what their plans are for Seed And Garden moving forward.
Tell us about your background
My business partner Phil and I have been friends since we were in grade school. Phil has always been an entrepreneur. When most kids were playing hopscotch, Phil was selling bagged lunches and potato chips at a profit. His entrepreneurial spirit continued into high school where he made a bunch of money selling Pokemon cards online. It was probably these ventures that ultimately led to him becoming a CPA. On the other hand, I got more into entrepreneurialism as I started doing more and more residential property management. The fact that there was passive income available to people who were willing to think outside the box in terms of typical salaried jobs really inspired me.
What brought you to Flippa?
I had the capital and Phil had the online sales background and business sense so we decided to acquire a business together. Not long after, Phil’s cousin recommended that we check out Flippa, which he said had thousands of websites for sale. Right away we found a young website called CheapMagicSleeves.com, and it was honestly too good of a fit to pass. Phil and I grew up playing the “Magic” card game, so we had a pretty good understanding of the customer base for Cheap Magic Sleeves. We bought the site for $405, and a year later the revenue has grown substantially. While the site still has a long way to go it has been a great learning opportunity.
Tell us about SeedAndGarden.com
SeedAndGarden.com, an ecommerce site specializing in the sale of high-quality seed starting supplies and fresh seeds at reasonable prices, is our most recent acquisition. The site was founded in 2004 and came complete with detailed descriptions, high quality images, and a place for customer reviews to help home and professional gardeners make better purchase decisions. At $22,500 Seed And Garden was a much larger acquisition than Cheap Magic Sleeves, and it came with a new set of challenges.
What are your plans for Seed And Garden moving forward?
Right now we’re focused on improving the processes of the business such as those related to inventory control and customer support. We’re also trying to get a better understanding of our customers. Luckily, Phil’s wife is an amateur gardener herself with first-hand knowledge of many of the products we sell. She has been a huge help during the transition. Overall, we’re both very happy with the purchase and we’re looking forward to continuing to grow this top destination for gardening seeds and seed supplies. We’re also excited to continue building our web business portfolio.
Do you have any advice for other web entrepreneurs looking at websites for sale on Flippa?
For anyone considering purchasing a website my one piece of advice is: get ready to work. An online business is a business that comes with responsibilities just like any other. If you are looking for a get rich quick scheme, go buy a lottery ticket. There is an almost infinite number of opportunities to make money online, but you have to be willing to put in the work.
Today we sit down with Angelo Todesco, the new owner of online music service ZippyTune.com, which he purchased at auction on Flippa for $20,100 in February. Angelo tells us how Zippy Tune was started, what he plans to do with the site, and why he thought this web business had untapped potential!
Tell us about your background as web entrepreneur
I started working on websites at the age of 17. In college, I had the opportunity to work for several website development agencies which helped me continue to fine-tune my knowledge of this industry. After finishing college, I decided to start my own company, Gelsco Ltd, so that I could turn my passion of web development into a career. Since then I have written code for and managed a wide range of sites.
What brought you to Flippa?
I actually found Flippa by chance about 6 months ago after clicking an online ad that directed me to the site. After discovering that people on Flippa were buying and selling websites, domain names, and mobile apps I knew I wanted to participate. I started out by purchasing an established iOS app before moving to established website acquisitions. All in all, the Flippa platform is without a doubt the best in the business.
Tell us about ZippyTune.com what is the site about? How did it get started?
ZippyTune.com is an online music service in which people can listen to and share music. An Australian web developer created the site so he could share personal music with his friends. It spread really quickly from there, and as the service became more and more popular outside of his group of friends, it was eventually released worldwide.
What motivated you to place a bid?
I think the fact that there was plenty of room for improvement really motivated me to buy the site. By making a number of improvements I think I can easily increase the value. Other than that, I also really like the business model. The site is being monetized in several different ways including advertising and the sale of premium account subscriptions and these multiple untapped revenue streams will help fund our growth.
What are your plans for Zippy Tune moving forward?
We’ve already got a huge community of artists and music lovers who use the site, and I’m excited to continue to grow that community. To achieve that growth I’ll be putting into play a number of plans. First, I’ve been working on a brand new layout that I hope will improve the user experience. Next, I plan on turning Zippy Tune into a fully responsive website. Next, I’m going to introduce a “Rewards Store” where users will be able to convert download points into gifts. I’ll also be releasing a Zippy Tune app for iOS and Android devices. Finally, I’ll be ramping up the marketing efforts and advertising the site heavily via AdWords and Facebook. The short-term goal is to increase the number of active users from 175,000 to 200,000 in two months time. The long-term goal is to become the premiere online music community.
Any advice for other web entrepreneurs looking buy websites on Flippa?
My advice would be to have patience. It can take time to find a quality site that fits with what you’re seeking, but it is important to check regularly and wait for the right opportunity. The best place to look on Flippa is Editors’ Choice. Most of the high-quality sites end up being listed there. If you have access, you should also check out Deal Flow regularly.
Are you looking for a way to bring even more attention to your website auction on Flippa? Your regular visitors are the perfect buyers, because they already love your site. Now you can let them know your site is for sale by adding Flippa’s new promotion banner to your website.
The banner itself is easy to install, not intrusive, mobile friendly, and sits neatly at the top of the page. Ready to try it out? Just navigate to your listing page and you should see a number of options for promotion. Click on “Add a promotion banner.”
From here you will see that we’ve created a unique code snippet just for your site. All you need to do is copy this code and add it to the bottom of your website before the closing body tag.
If done properly you should now see the “For Sale” notice at the top of your page, just like the example below.
Have questions about installing the promotion banner? Contact our support team for assistance.
Fresh off his $30,100 winning bid on KeywordXP.com, I got the opportunity to sit down with Karthik Magapu for an interview. Karthik gives us the scoop on KeywordXP and how he has built a web acquisition company with a portfolio of over 30 websites.
Tell us about your background as web entrepreneur.
In 2011 I cofounded Hummingbird Web Solutions. Our strategy has been to take over and nurture existing web based businesses. Since founding we have successfully acquired over 30 web businesses on Flippa, and our company now consists of over 50 enthusiastic web developers, designers and marketers who help to run the businesses that we acquire. Our portfolio consists of web businesses related to WordPress, Joomla, E-Commerce, Social Media, Online Marketplaces, and more. However, we are typically on the hunt for Software Product or SAAS based web businesses, where the business has a proven track record of sales and a history of active customers.
When did you start using Flippa and what keeps you coming back?
I have been a Flippa user since it was founded in 2009 and I have enjoyed watching the platform grow into the thriving marketplace it is today. Given the sheer number of high-quality listings there really isn’t any other platform out there that can compete. While it is important to always do your due diligence, I have found the majority of sellers are honest and genuine, and me experience overall has been very positive.
For those who don’t already know, tell us about KeywordXP.com what is the site about?
KeywordXP is a unique Search Engine Optimization (SEO) tool launched in 2012. It operates as a desktop app for Mac and Windows that performs complex keyword research tasks quickly and efficiently. One of the key features of this tool is the ability to extract exact match keyword data directly from Google’s keyword planner. Users can then analyze valuable statistics, trends, and graphs surrounding the data and make better decisions about which keywords to use. We currently have over 7,000 active users, and most of these users have been able to dramatically boost their SEO results with KeywordXP.
From a business perspective, why did you ultimately decide to place a bid?
KeywordXP was a great acquisition for us because, while the business is not passive, it can be effectively run with a team. We like to find businesses where we can put a team of software professionals together to manage the product lifecycle, manage customer support, and market the product so it really was a great match. Aside from that, I very much liked the fact that the business was being sold by a reputed seller, Brad Gosse, and that the site had a proven track record in terms of sales and customers. I am convinced that SEO services and tools make up an evergreen market. The reason being that customers in the SEO industry are generally willing to pay for products and services that work, as the ROI achieved through the use of these products and services can be huge.
What are your plans for KeywordXP.com moving forward?
We have exciting plans for KeywordXP, and we’ll be carrying forward the great work that Brad and Paul (the previous owners) have already done. Some key things we’ll be doing over the next couple of weeks include:
- Actively promote the product to new users.
- Start offering SEO related services around the product.
- Relaunch the affiliate program, recruit new affiliates, and contact past affiliates.
- Improve the product to close the feature gap between other best in class tools in this niche.
- Bring customer support to a gold standard and continue to improve the customer experience.
I should also mention that we are continuing to work with one of the original owners, Paul Clifford, to chart out an exciting product roadmap. With the enhancements we are planning KeywordXP is set to be the leading SEO keyword research tool on the market.
Any advice for other web entrepreneurs looking buy websites on Flippa?
Having bought a lot of web businesses on Flippa I certainly have a few suggestions. First, do just as much due diligence on individual sellers as you do on the business itself. You can do this by looking up their Linkedin profiles, Goolging their names, and even setting up meetings on Skype. You need to determine if the person is (1) trustworthy, and (2) someone you would be comfortable doing business with. I usually wont even look at a business unless the seller is willing to share their full name and identity. My next recommendation is search for businesses that will allow you to add value. Unless you can add value in a business, you will probably see a negative return on your investment. Finally, to find the highest quality listings, you need to be actively searching. That means, visiting Flippa often and saving searches. I typically visit the site multiple times a day and I’ve got saved searches set up so that new listings launched with specific keywords are sent to my inbox. The more active you are, the more opportunities you’ll be able to evaluate before you find the perfect match.