In 2016 there were 1,153,501,331 websites on the internet. Not all of them commercial, but many of them are profit driven. All the commercial websites are for sale at the right price, but finding a good website to invest your money in is a complex and risk-prone task. Flippa makes this investment easier to find, evaluate and buy.
Investitin.com recently had the opportunity to speak with Chris Holle, one of Flippa’s marketing specialists. Chris breaks down the process of buying and selling online businesses, and why opportunities like these make for excellent investment ideas.
Can you tell us more about yourself and your role in Flippa?
I’m one of Flippa’s marketing specialists, with my primary focus on the websites and apps marketplace. My role at Flippa is to help match the right buyers and sellers together by promoting listings through social media and sending out newsletters.
Flippa has recently started to sell apps, what was the reception of the investors in this market?
We launched our apps marketplace back in 2014 and our feedback has been overwhelmingly positive. Our marketplace has been steadily growing in popularity, as many people are seeing the advantages of owning an app, being that they typically have a very passive business model and require little to no up keep to maintain.
Many of our app sellers are either self-employed or work for companies like Uber and Facebook, and create apps as fun side projects. More often than not, these sellers will make the transition to the new owner as seamless as possible by swapping out the ad ID’s before transferring over ownership. This means that the new owner starts earning money instantly upon buying the app.
Can you describe Flippa in figures?
We have running totals available on our home page for everyone to see. This week alone, we’ve helped facilitate the sale of over $512,000 worth of assets with 7,831 bids. In addition, you can see our running lifetime TTV, which is over $190 million.
Why is the Flippa market an efficient way to find the value and invest in an App, Domain or Website?
To put it simply, we are the largest marketplace for buying and selling websites, domains, and apps. We have over 1 million active users and help facilitate hundreds of sales each day. If you’re interested in finding the value of your own website, we do offer free, professional website valuations here: https://flippa.com/deal-flow/sell
Do you observe trends in the sales and purchases of Websites, Domains and Apps?
Each of these verticals have different pricing models. Domains are we consider to be ‘digital assets’ where the value lies with the name. Think of a domain as internet real estate. A single word dictionary URL, like Hotels.com, is going to sell for a much higher price than FindHotelsNearMe.com.
Websites are typically valued on a 1-4x annual net profit multiple, meaning that if a site was earning $10,000 of annual net profit, a 2x multiple would mean it sells for $20,000. Typically sites with stable or growing revenue and traffic will be in the 2-4x annual net profit range. To learn more about website valuations I recommend checking out this guide: How much is my website worth?
Apps have a somewhat less predictable multiple that can range from 1x to over 6x. Websites and apps are both considered to be digital businesses, where the value comes mainly from the financial side of things. That being said, having a high-volume of traffic, large emailing lists, or large social media pages will certainly drive the value of a website or app up.
To answer your question about geographic clusters, we are a global marketplace with users all over the world! The countries using Flippa the most tend to be the US, Canada, Australia, United Kingdom, and India, but we are seeing explosive growth in many other markets as well
What advice do you have for those building a website with the intention of selling it on Flippa?
If you are building a website, or own a website, the first thing I would recommend is installing Google Analytics. This is something absolutely every website should have running and is the industry standard for gauging a website’s traffic. Typically, this is one of the first things potential buyers will look at.
Of course going hand in hand with keeping good traffic data is keeping organized financials. As a responsible business owner this is something you should already be doing, and when it comes time to sell you will be a step ahead of the game. Business owners failing to keep accurate or organized financials will face an uphill battle when selling their businesses as buyers will typically be apprehensive to bid on these properties.
How can sellers market their website sale on Flippa?
The best way to market your website is to be as thorough as possible when building your listing. When people are searching for websites, the first two things they want to see is verified traffic through Google Analytics, and accurate financials. With these completed, your website will show up more prominently in our search results.
Additionally, there are a few paid upgrades such as homepage upgrades or newsletter upgrades, that will bring quite a bit more traffic to your listing and will likely help it sell for a higher price.
Lastly, if you have a website earning more than $1,000/mo I recommend starting off with a free professional website valuation from one of our experienced brokers. Our brokers have professional backgrounds in accounting, law, and mergers and acquisitions. If your website qualifies for a free valuation, it might also qualify for brokerage assistance meaning you would have a dedicated broker to handle every aspect of the sale for you.
How can users find out more about how to invest in websites and apps?