Flippa announced in a recent blog post that they remove the sale of premium upgrades from their domain platform (this change comes into effect as of December 1st) until they build a better system where premium upgrades have a real positive effect on the auction. What are the statistics form the last months? Read below.
Selling domains on Flippa is not that easy as you think, at least if you do it for profit. The following options are available:
- basic listing, reserve
There is a very little chance to sell your domain. One of the most popular filter is the “reserve met” on Flippa, so most of the buyers will not see your listing. Also, without premium upgrades, your listing will be buried anyway. If you valuate some domains on Flippa, you can get a free credit for a basic domain listing. This way it will cost nothing but most probably (chances are over 90%) you will not sell anything. If you are so lucky that the right buyer finds your listing and does not hesitate buying it, you only have to pay a 10% success fee.
- basic listing, no reserve
If you don’t upgrade your listing, there will be very few views on it (except if it is an Editors’ choice). So this is a method, how to sell your domain for the possible lowest amount, because without reserve, chances are high that someone will find your domain and will bid $1 on it if it is not that bad. Without upgrade, chances are minimized to have many bidders and bidding war on the domain.
- premium listing, reserve
It is an effective and often used method to pay $250 or $350 for not selling your domain. I am not brave enough to collect statistics what is the percentage of premium listings with reserve that is sold but it is extremely low. Again, with a reserve price, the number of listing views is drastically lowered. Of course I understand that great names are too risky to be listed without reserve but paying $350 for nothing is not much better.
- premium listing, no reserve
This is the way to maximize everything. I mean maximize your profit or maximize your loss. You have to pay for upgrades in advance and success fee at the end, so the minimum cost of your listing is about $400. If you sell for less, you have to pay money to Flippa to give the domain to someone else. Another risk factor is that your great domain will be sold for a low amount and of course it is a probable scenario.
However, at the same time, this is the only possible way to maximize the sale price (except for some exceptional names that goes viral even with reserve). Thus, premium listing with no reserve is a logical combination.
I have collected the results of 50 sold premium upgraded domain listings on Flippa. I consider them as no reserve listings, maybe some of them had a low reserve that does not really matter. Only single domain listings were analyzed and Domain Holdings brokered domains were not taken into account. Check the results below.
|domain name||sale price||upgrade cost||success fee + bank costs||net result||sum listing fee in %|
A shocking fact: 60% of the sold listings cost more than the sale price. Blogster.io made the highest loss, the sale price is $31 and it was a $350 listing so made a total loss of $323. Or better to say at least $323, since it is possible that a domain is also promoted elsewhere (Domaining, Namebio, etc) for additional cost or it is possible to buy upgrades more than once. It is a clear indication that premium listings on not premium domains are not advisable. Maybe I should contact these sellers before they list the name to give their domains to me for free and we will both win on this transaction even if the seller does not believe it. These are the names on the list that I would happily take for free: shellproof.com, gnuj.com, fipj.com, rvxj.com and musichit.com.
Additionally, we should stop burying our head in the sand: sellers did not get these domains for free. So even when the sale price is higher than costs, it can be a massive loss anyway. Since I have no data about the purchase price of these domains, I cannot draw exact conclusions about profits. I have to mention that most of the positive balance sales are also not that great names. Oppositely, there are only very few real premium names here. It means that the best premium names are listed with reserve and almost never sold.
Flippa is proud of the low, 10% success fee and promote themselves to have lower fees than GoDaddy or Sedo. If we calculate the real listing fees that include the prices of premium upgrades, this 10% is not that true anymore. There is only one listing, orderfoodonline.com which is under 20% altogether. Auctions with a sale price above $2000 have a fee between 20-30%. Relative fee is rapidly increasing below $1000 and it is more than 50% and for listings making a loss it is of course over 100% – see the following histogram (highest losses are not shown).
Conclusion? I use two listing methods on Flippa.
- basic listing with reserve. I have a very high chance here that the domain will go unsold anyway but I don’t risk anything at the same time.
- premium listing without reserve. Only for the very best names that I still can afford to lose (I know that it is an oxymoron). Very risky strategy but as you can see from these statistics, it will make a profit in about 20% of the cases. We will see how this strategy will work when the new Premium system starts at Flippa.
Are you ready? Calculate your profit/loss in a Flippa domain auction
Use our calculator and check for how much the domain should be sold to make profit. The default numbers are set to a hand-registration which is not renewed yet and is sold for $500. This is pretty hard to achieve! Upgrades are only recommended for premium domains.