INTERVIEW WITH MARKETING AND OPERATIONS MANAGER AT FLIPPA, ANDREW KNIBBE

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1 ACCELERATED FLIPPING PROFITS INTERVIEW WITH MARKETING AND OPERATIONS MANAGER AT FLIPPA, KNIBBE Hi all, welcome to this interview, this is Jonathan Heusman, I want to thank you for picking it up to listen to it, hopefully you'll get a lot of great information. I am here with Andrew Knibbe from FLIPPA. He is the marketing and operations manager, so he oversees a lot of the stuff there, and he was kind enough to take some time out of his day, and answer a few questions for me, so thanks for coming on this call Andrew. No problem. Awesome. Maybe you'd like to do a real quick introduction of what it is you do at FLIPPA, and we'll just start with that. Yeah sure, the main focus is marketing for FLIPPA, and with that is covering the blog, and social media, as well as some of the product enhancements you work on, but also the support guys, so I get a pretty good view of what happens across buyers and sellers and across all sorts of auctions and listings so, it's broad. Awesome. That's good, it'll be great to get your insight on what some of the successful and unsuccessful flippers do! So to jump right into it, first of all, when you see people doing their auctions, what are some of the biggest do s and don'ts that you see people doing when they're trying to sell their websites? Yeah, the biggest one I see is people probably not pitching their site, like in the description, and the title of their auction, so buyers really love things like revenue, and traffic, and site age and that sort of stuff. They re not really interested in how long it took you to develop a logo, or the plug ins you use for Wordpress and so forth, so people really need to understand what they're pitching, and call it out in the description, and also in the title. Also it's good to verify as much information as you can, so we provide plug-ins for analytics and Adsense as well, so if you get any revenue from those guys, it's good to verify them because it gives the buyers a lot of confidence too, which is good for the bidding. And the third one is the pricing, some buyers kind of get pretty ambitious with pricing, based on they spent three years building a site and they want to price that into what the bidding is, and it doesn't always work, so the more time you can spend looking at auctions and see what kind of prices similar sites go for, it's a kind of good way to kick in from there. And

2 outside of that, just be responsive. So when I see sellers who have some kind of chink in the armor, like some people have a weak backlink profile for example, and people try to ask them about that. And they kind of shut down the conversations, it tends to kind of create problems in terms of it scares people off, whereas if they'd just kind of addressed it up front they probably would have sold a few more people and gotten a good bit more business which is also a good thing, so, yeah, being open is probably the main thing to be concerned about once you get your listing going live. 3:47 Excellent points. That's something I talk about in my guide is just, your headline is really important, because you've gotta grab those people and get them to come read the rest of your auctions. The headline follows you everywhere right, whereas the description doesn't. Exactly. So those are some really good views, before I move to the next part with pricing, most people I see will start at like $1, and others will start at a level more where they think their site is worth and start at like a ballpark figure somewhere in there, what do you see that usually gets better results? I think $1 is too low. You kind of end up cheapening your site. If your site is worth $100, a dollar might be ok, but if your site is worth $5,000, a dollar is going to be too low. A lot of people do it, even high end guys do it, it's fine, the bigger problem is they will set the opening bid too high. So if your site is worth $5,000 and they set the opening bid to $4,500, and if it's not worth $5,000, they'll get no bids, and by the end of the listing they've kind of sunk their listing fee and they've gotten nothing out of it, whereas if they set the reserve for $5,000 and they set the starting bidding at $500, and the bidding got up to $1,500, at least they kind of know what the market value of the site is even if they end up not selling, which is something to walk away with in terms of value, so that opening bid is an important one not to get too ambitious on... admittedly it is a bad look if you set it for a dollar and it gets no bids, then it s a time for some introspection, I guess. What are some big don'ts that you've seen people do? Trying to hide stuff. If they get comments and they just delete them without trying to take them on board, and if someone is trolling your listing and you delete them, just report that to Flippa and we'll remove that comment from your listing altogether. If someone comes along and asks a legitimate question and if you shut them down it's just going to upset them, and they are going to either keep posting

3 comments on your listing or they are going to complain to Flippa and it s just gonna cause a bit of pain. So just address the comments sincerely. It might not actually help pitch your site as being awesome but if you at least respond to them, I think that is a really good way to be looking. I also see some sellers who just delete all these comments, people who think it's not really that important, but a lot of buyers really care about the comments so if you start deleting too many, they get a little bit suspicious and start looking elsewhere. Yeah that's a big no-no. Ok, so once people get their listings up, then of course they've gotta try to bring people in to see their listing. So you've seen a lot of auctions there, what are some things you have seen people do outside of just making their posting to actually promote their auction? If people have a listing coming along and they've done all they can in that regard, I've seen a lot of people approach bloggers and get them write a story about the fact that they're selling. That works well in the kind of higher-end. So we had PinReach.com sell I think a week or two ago, and he really went hard talking to the big tech blogs, no doubt about it, which ended up getting him a buyer. He had more bidding intensity, which ended up getting him a better price which is a good thing. I've also seen people write up on their own blogs, there's a guy who's got a few sites, and he's got his own blog and when he goes to sell a site he writes a post about that. So he gets more traffic there as well, and people know who he is so it's about knowing the seller, to a certain degree. There are also niche forums. So if you've got a really awesome niche affiliate marketing site, it's worth jumping into the affiliate marketing forums and letting everyone know that your site is for sale. That s because they are really qualified buyers and that means that it will really rollover for them and they will be willing to pay a premium for this site that you're selling. Just to get it as part of their portfolio. Another one is social media, with your followers, and whoever else on Facebook and Twitter, and Google+ if you use that. Post that your selling and it s not going to be a bad thing for your site. The more eyeballs, especially when qualified, the better. Those are really good tips. With bloggers trying to get them to blog about your sale, do people typically offer a commission to the blogger who creates the sale? There's some models like that where people pay a finder's fee, for example, I haven't really seen it play out in real life in terms of getting a sale from it, but I bet the bloggers at the top end at least wouldn t be so comfortable with that. But maybe on the bottom end you might get some guys that would jump on and help out. It can be hard too, because you've gotta make sure the blogger is happy to write about it.

4 Exactly, that's the tricky part. This one was writing about Pinterest and everything is sort of about Pinterest right now, so that's pretty easy, right? So basically you want to contact bloggers who are at least in the same niche as whatever site you're selling? Spot on. They'll probably appreciate what you're selling a little bit more as well. Well let's talk about Flippa and maybe you can share some interesting stuff with us. I guess first of all, you can kind of give us a little elevator pitch here, why should people use Flippa instead of other sites to buy and sell their websites? Mainly cause I work there, but yeah I guess the biggest thing always is goint to be, for someone who wants to sell you want to get your website in front of the biggest possible buyer audience, and there's nobody who can beat that in terms of Flippa, because we've got the biggest buyer audience, they're pretty well qualified, and the whole end to end experience is really around buying and selling websites. You don't get asked for delivery and that kind of stuff. It s not relevant to websites and the whole listing process is kind of focused on that. That is kind of the biggest pitch and I think it attracts our buyers and sellers which kind of maintains our position. You've got anywhere between 3,000 and 5,000 users online at any one time, so as soon as you list people are hitting that just posted page over and over, so as soon as you list you are getting eyeballs pretty much instantaneously looking at your listing and trying to see if they want to bid it up. No one else can beat that. And outside of that, all our team, myself, all the tech guys, all the support guys, everyone is really just about buying and selling websites, so nothing else distracts us. That s all we are looking at and we're looking at building up the product and the assistance all around websites, and that's why I think we're number one and that s why we ll stay number one as far as I m concerned. Not that were resting on our laurels, we're also looking to do cool stuff with the site. It's an exciting place. Just out of curiosity, how large of a company is Flippa now? When we started, we were about 6. I think we are about 12 now, 3 in support, 4 or 5 devs in a given day, and then 3 looking at things like marketing, so, lot of people, lot of focus, it's good.

5 Oh wow I was actually thinking it's a little bigger, just because of the professionalism and the site just looks like it'd have a big company behind it. Yeah, we are part of the big Sitepoint group-family to a certain degree. 99designs are downstairs, we ve got a new start-up, tweaky.com next door to us. It s kind of its own little incubator to a certain degree, so we are always bouncing ideas off of each other which is pretty good. So yeah, we are probably talking 50, 60, 70 staff outside of that. So yeah, it s good. Very Cool. So what kind of cool resources are built in to flippa to help people build their auctions and get the best price? Yeah, in terms of building the auction, we do a lot in terms of trying to pick up third party information. So as soon as you start listing, enter your url and hit go, we'll go and grab screenshots, we'll go and grab page rank, backlink counts, alexa rank and it's all in the background, so you don t need to go fill it out yourself. So it's happening and it's believable, it's not provided by the seller which also helps kind of get the confidence rolling. So that is probably one of the bigger things. So things like having an open bid and reserve price and letting the sellers accept or reject bidders also helps to ensure they have control of the auction, which invariably ends up with a better sell price which is a good thing. And recently we put the proxy bidding in place, which is very much like ebay, so if a site is at $100 and you think it's worth $2,000, you can place a bid for $2,000 and we'll put a bid in at $110 for you and keep bidding up to $2,000 to keep you in the lead, but at the lowest price possible. But as soon as you get there, you get notified you need to up the ante. Which kind of gets the bidding intensity rolling faster, so you gotta get more time to kind of work out what the bidding needs to be at rather than just discovering a listing where you sort of have to manually up the bidding yourself, which keeps the engagement going with the buyers and sellers. That's a nice addition yeah it's worked pretty well, it's got really great feedback. When you get towards the end of the auction, I know it used to be when someone would bid in the last four hours, the clock would reset to four hours. It's different now correct?

6 We've left that in place. We did a poll recently to see if we needed to reduce that because a lot of people like, it's kind of confusing to some people. Some people love it and some people hate it. We'll probably end up reducing that at some point. The main thing that will do is stop sniping when someone places a bid at the last second, and they win the auction even though someone else might have bid higher, so we'll probably reduce that window to 30 minutes or a quarter hour to make it easier than this kind of four-hour slog. NOTE: Flippa has since changed it to reset to 1 hour when a new bid is received in the last hour. One problem I experienced with that is my auction went into the wee hours of the morning, and certain bidders fell asleep at the keyboard or something, so. So that may be changing to a shorter time in the future. I was hoping I could get some cool stats out of you. I actually have a list of questions, such as what would the best niche be to flip a site in, or niches if you've seen multiple? Yeah, I think it depends on your price range. We did like an infographic on revenue about eight months ago now, we looked at different niches and how they compare, or niches is how it is in America, in terms of yield and what people pay in terms of multiple on the revenue and so forth, sport and health seem to be really good performers in that regard, they're pretty competitive, so if you can get a site that works and makes money in those spaces, you'll probably get a higher multiple on the sale price. Things like tech are probably in the middle, and things like affiliate marketing are probably at the bottom of the market in terms of the multiples. I think because the long term revenue on those guys are not as high. But then there are sort of things that sort of appear out of the blue like we ve had some Youtube stuff just kind of appear and people selling like Youtube download services or something and more recently it s been like social media followers where they sell followers and sell likes and all this kind of stuff. I think you know give it another month and they ll disappear and be replaced with something else. If you're looking at more long term it's gonna be more sport and health. Lifestyle tends to work pretty well as well, the kind of variance between those sites is really high. You get some guys that sell really well, others don t work out so great. Some that are really focused and are really narrow and nail a niche tend to get pretty good sales, since people like those in their portfolio. As far as monetization, I know Adsense has been around forever and people still flip a lot of Adsense sites. Are there other monetization models that you've seen have had really good success?

7 I'd say it s the most popular model we have. The second one tends to be like Clickbank type monetization, or affiliate arrangements of some sort like say ebay or using Amazon or something like that. Those guys, I think because it is a good way to monetize a site, tend to get good multiples as well. So for Clickbank not actually selling something from your site as the creator, but as an affiliate? Yeah that's probably the second biggest. And then the third one would be things like ecommerce, so either drop shipping or having your own inventory, and outside of that it's probably subscription style models. So you've got a forum and you pay ten bucks a month to be part of that forum and you sell it to somebody else and they've gotta account for that as part of the revenue opportunity. What have you seen is the best length of an auction that people have had the best results from? It tends to vary. If someone has a brand new site and they've had it for like a month and they decide to sell it and there's no traffic or revenue, I've seen people try to sell it for like 14 days or 7 days, where most of the attention comes in the last 2 days or 1 day, so they could've just gone with a three day auction and it wouldn't have mattered. If you bring in any traffic you want to wait longer. If you ve got a bit of age behind your site and content, 7 days to 14 days is good. If you ve got any revenue, like $1,000 a month, you probably want to go the full 30 days. That gets you in front of as many buyers as possible and it also gives them a chance to do some due diligence on your site and how it works, which means you are in a good position to bid at the end. So you definitely see the bulk of bidding happens in the last 48 hours of an auction, so having a longer auction doesn't necessarily mean you're going to get better or more bids as such. So yeah, it does tend to vary. That makes sense to give more time if you're flipping a site that has a lot of revenue because you do want to get as many eyes on there as possible. What day is the best day to have your auction end on? Because I know a lot of times there might be a certain day of the week that Flippa gets more traffic. As long as the buyers have seen it, they will be watching a listing and bid it, so where it ends doesn't matter quite as much, so as long as you've got qualified buyers they will be there making sure their bids are on top or they ve bid to the max. Peak tends to be that Tuesday/Wednesday, but it tends to vary depending on the sorts of

8 listings we've got going on that time, as well. It becomes a tricky one, because I ve seen people sort of try to plan it to end on a Saturday night and then the extensions kick in and it takes them through to like Sunday morning for example. So it can be kind of hard to plan for. The bulk of the users are in the US, so it s worth maybe kind of framing around that if that's your thing. So as far as what time an auction ends, maybe try to end it what time? Maybe early evening, like say People tend to go by eastern standard time. Right, use that one. People stay up when they decide they want to buy. Without fail. Ok, that is kind of a common time, early evenings with communications with customers online in general. So this is a little more of a general question - what are some good resources you think all website flippers should know about? Definitely check out our blog, we definitely spend a bit of time trying to get good guest posts and some good thinking on buying and selling websites and we've put some of that into the buyer and seller guides which you can get from the deals page on our site as well. Outside of that, there are some good forums out there, especially the ones that teach some things like affiliate marketing and domaining, that covers good chunks so you can kind of see where the industry is heading to a certain degree. And the third one is events. There are a bunch of events out there that touch on great things that people who own websites should know about. Affiliate Summit East has some awesome looking speakers on there. Pubcon is another good one that a lot of people like. If you're in the forums and affiliate marketing forums, you can't miss them because they will be talked about. Are there any specific forums to site flipping, that just specialize in site flipping? Warrior Forum has volume in that regard, so we definitely have a lot of our guys in there trying to help out when people raise questions. Black Hat Forum tends to mention it a bit as well, so we jump in. There are the guys who are buying and selling a lot of volume.

9 In terms of the site flipping industry as a whole, have you noticed a growth right now or decline or kind of level, what have you seen in that regard? It changes a whole lot, definitely the types of buyers and sellers we're seeing before I started seems to have kind of moved a bit and the sorts of sites that are changing hands a lot. We tend to focus on wherever the market is going. We are definitely seeing more interest in more established sites. But there is still a market for the newer sites, but not as big originally. Definitely the guys that can show a site with a lot of backlinks, and social media followers, and a lot of keyword rankings, tend to get much higher multiples than the brand new sites do now, which I think is different from what it was two years ago. Who knows where it will go from here, maybe it will be mobile apps and Youtube channels, I'm not sure. But it keeps moving and it is always very exciting. Interesting you mention YouTube Channels. I don't know if that's technically allowed by Google's or YouTube's terms of service but it would be interesting to see where that goes... Especially with mobile apps, as that industry matures I think it will become a bit more common place. Will keep it interesting, so that is good. So when people are actually looking for sites to purchase, what kinds of things should they be looking for? It's gonna be different for different buyers, but at the end of the day you want to make sure you get a good fit for who you are and a good value for what you are buying. In terms of fit, that is things like making sure that it fits your experience, if you're familiar with WordPress, you want look at some Wordpress sites rather than take on some Ruby on Rails kind of project. Get a good fit in terms of where you wanna head with goals and your skill sets there. And also on value, just make sure you're buying stuff that fits with value to who you are, value to me is things you can't really replicate yourself at a low cost. That s why things like revenue and traffic, site age, backlinks and content, stuff you can't just flip a switch to make happen by itself. They re the things you want to focus on with what to buy. That makes a lot of sense, you wouldn t want to pick up a site built with some complex php script if you don t know how to work it.

10 And with monetization if you are kind of used to ad-based websites and you try to switch to E-commerce based sites it won t be completely unsolvable, but it will be different, so you gotta allow time for when you are making that kind of purchase. I've actually heard some stats that some very large percentage of websites now are built on Wordpress, I don't know the exact number, but a pretty big number. Do you actualy see a good chunk of sites being flipped on the Wordpress platform? Absolutely, I think it probably accounts for 70% of our listings, maybe even 80%, but yeah I think wordpress is by far the most dominant one that we have. Ok, great. If you had just one piece of advice to someone that's wanting to get in to flipping sites, what would it be? If I had to pick one, it'd be do your research, just go in and sign up for a few Flippa and setup a few saved searches, see what kind of sites are being listed, see what they're selling for, see how auctions kind of pan out and play out over time, it's good fun but the more experience or exposure you can get to that before you leap in, the better position you are to understand things like value and pricing and how auctions work, and how to get the most for your money and your investment. So really be familiar with it and do a little bit of research. It is definitely well worth it and is also good fun. There are a lot of interesting things happening in the space. And actually you mentioned earlier that Flippa has a couple of guides? Yeah, that's for the people who are willing to see the lay of the land first, we put up a pro buyer guide, which kind of shows how to look at listings, how to setup searches and how to do a bit of due diligence on your site, and then also a seller's guide which tells you how to get the most out of your listing, and kind of make sure you get the most possible value out of your auction. And those are both free on the website? Yep, just go to the deals page, you'll see both of the guides on there. They're pretty popular. They have gotten some pretty good feedback.

11 Awesome, so that's a good thing to check out as well if you're just getting started. (saying goodbyes)

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