Kevin Fink came back for a second interview and delved into a wide variety of topics. From shill bids, to brokerage, to escrow and more. We hope you enjoy the interview and feel free to ask questions in the comments.
We are sitting down again with Kevin Fink to talk all things Flippa. The first interview was very well received and Flippa has only watched its profile in domain-only sales grow.
1) What do the first and second quarters look like sales wise vs last year ?
q1 2014 = 203k
q2 2014 = 557k
q1+q2 2014 = 760k
q1 2015 = 1.47m
q2 2015 = 1.61m
q1+q2 2015 = 3.08m
We began focusing on Domains in January of 2014, and as such it took a few months of configuring to help ramp things up. As you see from the comparisons, 2015 has been an entirely different story.
This past January we kicked off our in-house brokerage efforts. Ali Zandi, our flagship broker (who has since moved on to sprout his own endeavor) helped us develop an entirely new audience of domain sellers.
We made improvements to the platform all around. We tested free auction relists for domains, which we have since made standard. We improved marketplace integrity, added in-house Escrow and increased our overall reach with high-end buyers and sellers alike.
We did $2.15m in sales in all of 2014, and have since blown right past that in just the first two quarters of 2015, alone.
The domains unit had its best month ever just this past May, with over $800k in sales. Now with Domain Holdings a part of the Flippa family, the sky is the limit.
2) There have been some discussions online, Namepros especially, with regards to shill bids, accounts getting suspended or closed. Some have even called Flippa dirty and not a good place to sell. What do you say to those negative on the platform?
There’s an unfortunate underbelly of scammy people (anywhere online), and despite our ramped-up efforts some still appear throughout our platform.
What I want to stress to those who are still negative on Flippa is that we’re committed to ridding the marketplace of these kinds of buyers and sellers, and have made incredible progress in doing so.
Shill bidding exists everywhere, and no one has found a proper solution to deal with it yet. That does not exonerate any marketplace from that kind of behavior going unchecked.
What’s harder is the dissection of bid patterns. For example: a bidder bids $20, then $300 and then $3200 — that seems suspicious. But sometimes it is simply the bidder testing the reserve price. This bidder knows s/he is below reserve, yet has the budget and wants to buy this domain — so following this example, $3200 is their max / proxy bid.
That said, we are now able to pinpoint much more reliably and easily than ever before when in fact it is a fraudulent bidder. As a result we are seeing this behavior reappear less and less, a clear testament to our top-notch Customer Success and Marketplace Integrity teams.
I’d also like to note that over the past year, the number of disputes have more than halved; this is further proof that the marketplace is now safer and more trustworthy than it’s ever been.
To continue this healthy trajectory, here are some other improvements we’ve recently put in place:
– We just implemented a bidder-authorization system that approve bidders using a credit card pre-authorization of $500. This not a debit or a charge, but rather a verification to ensure a buyer has sufficient funds, prior to their bid hitting.
– Most established websites brought to auction now have to go through an additional due diligence screening process performed by Flippa’s Marketplace Integrity Specialists. We have also implemented a verification process to ensure that ‘new’ bidders within our Editors’ Choice listings are vetted and will certainly be moving forward with these sales should they win.
– We’ve made some technical leaps and bounds to more easily detect duplicate accounts, or those accounts we suspect of rigging bids. We have complex systems in place that detect when a Flippa member may be logging in as “someone else” to place bids on their own auction. Alternatively, if a new member is bidding on multiple auctions in a small window of time, we now intercede to verify their actions.
– Namebio now reports our sales at the end of each business day (which I know you syndicate, Raymond). When I confirm our Just Sold results (for our weekly blog rundown), I’ve started marking those sales I’m not 100% confident in as “Confirmation Pending.” Many are marked simply as a formality (they haven’t hit Escrow yet, etc), and so far when I followup up with these initial batches, there have only been a few reversals — re-reported to both Namebio and your blog. I believe this kind of transparency is important.
It should go without saying that if you see something scammy, dodgy or questionable — reach out anytime to Help@Flippa.com with any questions or concerns.
3) How is PromisePay going so far ? Is it in compliance with the laws pertaining to escrow ?
PromisePay is a fantastic platform — growing rapidly and facilitating more and more Flippa transactions everyday. I’m noticing that they are responsible for a majority of domain transactions, and I only expect that to increase as awareness grows and new features continue to be added. Since they operate outside of my jurisdiction, the answer to your second question is straight from PromisePay COO, Ben Harberts:
“PromisePay operates compliantly under payment facilitator agreements with our banking partners, who sponsor PromisePay into the payments network. By holding all funds in custodian/holding accounts managed by our banking partners, consumer funds never actually touch PromisePay’s operating accounts apart from the service fees deducted. Our partner banks underwrite all transactions on our behalf. For this reason, PromisePay is not required to hold any licenses pertaining to online escrow services. In addition, PromisePay has paid over $1,000,000 in bonds to its banking partners in order to operate compliantly.
That being said, PromisePay recognises there is significant brand benefit in holding licenses, despite these not being required to operate. To this effect, PromisePay has submitted applications for a escrow license in California, and an Australian Financial Services License (AFSL) in Australia. We expect both of these to become active before the end of this quarter.”
4) I have had a few friends tell me they made a surprise sale off a catalog listing. What is going on with catalog and how should domain investors best use the feature ?
Glad you asked about the Flippa Catalog, as we recently announced its rebranding into the Flippa Portfolio section.
Domainers, investors, collectors have portfolios. We felt this should be reflected throughout the marketplace as well. We have altered our branding, the way we refer to this section of the marketplace, and how our customers interact with it.
Now you can upload one or one million (or more, be my guest) domains to your Flippa Portfolio. You have a dedicated, unique URL you can show buyers, whether perspective or active.
The tool itself is vastly improved, thanks to our visionary product and development teams. The flow is quicker, easier to update — including bulk methods for changing minimum offer or buy/now price, as well as adding and deleting inventory. On that note, sellers can submit large portfolios via CSV for automatic upload.
Sellers also now have access to the new Domain Sales Page, which redirects type-in visitors to your portfolio or live auction listings, for quicker, easier lead generation and sales completion.
The overall Flippa Portfolio section has just surpassed 1.5m domains. If you’re buying domain names, there’s never been a better time to browse our platform.
5) There has been a .io craze on Flippa, Have most of the auctions resulted in actual sales where you earned a success fee ?
Most have completed, yes.
.IOs have seen massive success on Flippa, including the recent sale of Cloud.io at $45k (which many say is the industry’s highest publicly reported .IO sale to date).
Prior to my weekly sales confirmation-checks began, we did have a few .IO sales fall through. If you’re curious about a particular sale (or list of such), I can retroactively check — transparency is our goal.
6) You recently acquired Domain Holdings, can you tell us how they will work with sellers on Flippa ?
In acquiring Domain Holdings, the opportunity arose to work with an absolute behemoth of a domain sales & brokerage team.
Here’s why that’s important for the domain investor, or even passive domain seller:
A general rule of thumb I try to instill in our customers is that active sellers — those individuals who promote their listings, reach out to end users, use social media effectively, redirect their domain’s URL to their Flippa auction or portfolio link, etc — get the best results.
Once these tactics are put into place and you’ve made contact with perspective buyers, the auction is a very effective tool to say “Look: here it is, but there are others interested as well as a finite amount of time with which we can communicate and negotiate a sale.”
Not every seller is active — so brokers fill this need: brokers know — or find — the right buyers, and then they negotiate with those buyers.
Flippa charges a flat 10% commission; Domain Holdings brokerage tends to be pretty static at 15%.
On the hunt for a particular asset? Our Domains Team is always here to assist. That includes setting you up with a Buy Agent at Domain Holdings, should you be seeking Premium Investments. Email DomainsHelp@Flippa.com — someone from the Domains Team will be in touch promptly.
7) If someone backs out of a purchase or sale, what legal avenues are available to the other party ?
We do take this behavior extremely seriously, and by signing our ToS, both parties are expected and required to complete the sale.
As far as legal avenues, Flippa does not get involved in this side of the coin, nor should I profess to tell one party what to do — please do not digest this as legal advice.
If you’re a buyer, communication before the transaction commences is greatly important to get a good read on who you are doing business with.
For sellers, I’d recommend vetting all bidders *during* the open auction/listing process, before the transaction stage has begun. Signing a sales agreement is a surefire way to protect yourself.
If the sale is reversed, upon a dispute being decided in favor of the seller, we’ll happily assist with a relist, as well as re-apply upgrades at no cost. We’re also establishing better systems to be able to quickly offer the asset to the next highest bidder(s), to salvage the initial sale. Reach out to our Marketplace Integrity Team anytime for assistance.
8) Not to be spending your money, but some have found the top levels of promotion cost prohibitive, and to that point some have told me they gave up on Flippa, because they felt a standard listing had no chance of getting views. What do you say to those people ?
It’s definitely an issue that we’re not only entirely aware of, but are actively working to address.
A great problem to have is that last year at this time, there were less than 20,000 total domain names on the platform; now we have over 1.5m.
We used to have 500 live domain auctions; now we are over 5,000.
We’re constantly working to improve our curation efforts, as well as shore up our on-site search processes.
Expect in a couple months’ time our site-wide redesign. This will help address these issues more thoroughly.
Many find success with paid upgrades, but many also list domains and sit back, waiting.
In addition to being an active seller, here is what I would tell your readers, and anyone who’s either sold with us, had a lackluster experience, or those hesitant to start:
I recommend anyone — whether just starting out, or seasoned professionals looking at selling/buying domains — write to the domains team.
My colleague Devoir and I work with every single person who reaches out to us. In fact, we recommend speaking to someone before proceeding, as we can assist with best practices, listing and upgrade subsidies and even fine-tune a strategy that works for that particular domain owner / seller.
We’re honest with someone if we feel the domain won’t perform as well at auction, and would perhaps be better suited to be listed in a seller’s Flippa portfolio.
Talk to us first. We have a great team working with our sellers to set a strategy in place.
We would break inventory into three tiers:
First, it might be a great fit for Domain Holdings brokerage; generally, one-word, investment grade domains (shorter words, fewer characters), category-killing assets — and primarily .COMs in the mid-five-figure range and up — are considered.
Second, if not a good fit for brokerage, then we’ll craft a strategy to help you launch auctions, and get your auction in front of the right buyers.
Third, if we do not deem your inventory something we think has legs at auction, we’ll direct you to upload it to your Flippa Portfolio.
All in all, reach out and tell us what you’re seeking to sell, and please set proper pricing expectations upon messaging us. Provided your inventory is strong and pricing expectations are realistic, always keep in mind what is required to be an active seller (mentioned above) and really strive to participate in helping the platform work for you.
9) Can employees still bid on auctions ?
Yes, but most aren’t interested nor have the time.
To clarify what a former manager once discussed publicly: employees are encouraged to be involved in learning more about the marketplace, the flow of buying and selling, setting up listings, how communication works between buyers and sellers, etc. This helps us all do a better job at understanding our customers.
Contrary to a popular online rumor, Flippa employees do not sit around all day randomly lobbing bids as part of some immense bid-building operation.
10) Is there any thought being given to bidder ids ?
Yes, I’m personally all for it. That said, it’s a system-wide fix that would take some time to implement. Nonetheless, it’s on our radar.
11) Please share anything else you would like to share
We aim to continually improve and want to hear from you: what do you want your perfect domain marketplace and/or auction house to look like? Feel free to write as much as I did! For more personal responses, you can always reach out to DomainsHelp@Flippa.com to reach out to our team anytime.