Is Flippa The Best Online Business Valuation Tool?

Note that this isn’t a Flippa review. Rather, it’s a review of its “Valuation tool”. If you’ve got a business to buy or sell, Flippa offers a 100% free, instant valuation feature. It’s this feature I’m discussing here.

If you’ve got any online project you wish to sell, Flippa is arguably the best bet, or so they claim. I’ll try to discuss the pros and cons involved and get you a verdict you can act on.

Let’s see how much credit any of these Flippa claims hold then?

What is Flippa?
What is the free Flippa business valuation tool?
How is the valuation calculated?
Confidential listings
How much does Flippa charge?
Reviewd, verified brokers
Final verdict

What Is Flippa?

“It’s the marketplace that Mark Zuckerburg used to sell his website- Facemash.com.”

Imagine you’ve a web-based business (which I’m sure you do). It can be a :

A Domain,
an app,
or a complete website (eCommerce/blogs/ affiliate sites and everything else)

Flippa is the tool that will tell you exactly how much your business is worth. Then, it’ll help you connect with buyers and sell the website.

In other words, Flippa is an online marketplace for web-based businesses. It connects buyers and sellers.

Can Flippa be the best online business valuation tool?

Well, I don’t believe in “claims”. So, let’s talk numbers.

Flippa was launched in 2009. 13 years of existence is a testimonial by itself!
It has sold 100,000+ businesses so far!
Over $400 million have been generated in sales.
Flippa sees over 30,000+ new “buyers” sign up every month.

These numbers just prove that the company has probably the largest pool of e-biz buyers & sellers on the planet.

Let’s talk of its valuation tool then?

What is the free Flippa business valuation tool?

It’s a 100% feature that Flippa provides.

You don’t even need to sign up to use the feature.

It basically is an automated chat bot. It asks you a few questions, based on your answers it gives you the valuation of the site.

The total time required to get you your valuation is generally less than 4-5 minutes.

Simply go to the Flippa Valuation tool and talk to the chatbot. It’s that simple!

In most cases you don’t even need to type! You can choose from one of the displayed options. Even when you do type, you simply enter a year, or maybe your domain.

Point being, it’s not mentally or physically taxing, at all.

Once you answer the questions, Flippa will give you an idea of what to expect in terms of money when selling your business.

How is the valuation calculated?

Flippa Valuation is primarily calculated based on the answers you provide for its questions.

In its 10+ years, it has sold millions of sites. That data is compared against your project on various fronts to come up with a price at which similar sites have sold in the past.

The questions primarily revolve around-

Website Age:

This is, without doubt, one of the biggest valuation metrics, isn’t it? Even Google pays a lot of attention to a website’s age when it comes to SEO!

Older businesses generally tend to have an established traffic base and business model.

This often leads to them being sold at higher prices.

Broad Business model:

The “business model” is obviously important when you’re buying/selling a business, isn’t it?

So, Flippa asks you what your business model is. You can choose from:

Content/Advertising
eCommerce
SaaS
Service/Agency
Social
App
And Marketplace

Specific business model:

Once you choose one of the above options, Flippa asks for more specific.

E.g. if I select “Content/advertising”, it then asks if it’s a blog/article site, review site, directory etc.

If it’s a “Service/Agency”, I get to choose an exact niche, such as health, hobbies, electronics, internet, travel etc.

Monetization method

Next Flippa asks for your monetization method. You can choose from:

Adsense
Affiliate networks
Direct advertising
Or a few other options based on your business model.

Industry

After you’ve chosen your monetization method, Flippa asks for your industry. It’s basically like a broad “niche”.

Some options includes health, internet, automotive, sports & outdoor and so on. (Doesn’t really need rocket-science, does it?).

Revenue & trend

Arguably one of the most important aspect when buying/selling a business, isn’t it?

Flippa will ask you for your revenue for the last 12 months. This is a major factor that is calculated when determining the value of your site.

You also need to choose a general trend for your business. Meaning, Flippa asks if your most recent revenue month was a decrease, increase or remained stable as compared to other months.

Expenses

Me making $10,000 with an expense of $11,000 isn’t exactly desirable, is it? This is why Flippa asks for the expenses incurred for the business in the past 12 months.

Traffic & source

How much traffic you receive is something your buyers would want to know, wouldn’t they? This also has major impacts on the amount of money you make and the expenses incurred by you.

Flippa also lets you choose your exact traffic source. It can be direct, social, Adwords, organic etc.

The company does pay a lot of attention to “details”. This is why the % of organic traffic needs to be mentioned as well.

You’re almost done. Give it a few seconds or a minute at best. You’ll get a link to your valuation right away.

This is what you should see next:

P.s: Techcrunch. com is obviously not owned by me. I only used it as an example. Also, I entered random data (revenue/age/traffic etc.)

Flippa not only gives you a valuation, but also prepares a for-sale listing right away! Of course, this isn’t public yet. It’s just how it’ll look if and when you do decide to list your project on Flippa.

Note: Few metrics and questions may differ based on your exact project type.

Confidential Listings

This is a major feature that makes Flippa one of the best business valuation tool as well as buying/selling marketplace.

When listing your project, you can choose to make it “confidential”.

This will hide almost everything from the listing, except :

Asking Price
Age
Monthly profits
Profit margin
Pageviews
And Multiple

Basically, the URL, Semrush data or anything else which can be used to identify the site is hidden,.

In order to access those, buyers must sign a legally binding NDA!

As a seller, Flippa offers a pre-designed NDA template I can work with. Or, it also lets me upload my own PDF documents for the NDA.

Listings

As I just said, Flippa prepares your listing.

These listings are just like ads. They’re shown to potential buyers on Flippa.

The listing functions like an “auction”. Buyers will bid for your project and the higher bidder gets the sale.

This ensures you get the highest possible profit margins on the marketplace.

Now, I love the fact that Flippa brings in Semrush (my all-time favorite SEO tool) to verify and display a site’s metrics.

Semrush will display:

The Authority score
No. of backlinks
Total keywords
Referring domains etc.

This makes sure you can verify a site’s potential and current state without having to believe the seller blindly.

Note: The Semrush data is only for “websites”. If you’re selling something else, similar data may be shown from other relevant sources.

How much does Flippa charge?

How much does it cost?

“Flippa Valuation tool is 100% free”.

You can use the valuation tool as many times as you want, without paying a penny. Access to the report too is completely free.

Flippa is obviously not completely free. It charges for listings and sales!

Now, Flippa’s fee primarily depends on:

Asking price
The listing package you go with.
Broker vs. Flippa sales (only for high-ticket sales, I’ll explain).

Asking price: you pay a percentage of the total transaction depending on your asking price.

If your asking price is between $1.00-$49,999, your success fee would be 10%.
For sales worth $50,000-$99,999., you pay 7.5%.
For $100K-$2M sales- 5% success fee if you don’t use a broker. 15% if you use a broker. (Scroll down for details).

Then, there’s the listing fee. These start at $29.00 and go up to $399.00. The primary features some of these listings offer (or lack) are:

Exposure: Your listing is visible to more buyers on the more expensive plans.
Escrow price: Flippa obviously uses an escrow for all payments. The fee you pay to the Escrow depends on your listing package.
Cross-platform targeting: Flippa targets those who visited your listing across Facebook and other sites (ah, the wonders of technology!).
Promotions: Depending on your plan, you may get social media promotions, newsletter features, custom blog posts/interviews, custom videos etc.

Price match guarantee

This is a major reason why I say Flippa is the best business valuation tool out there.

You’re selling something you’ve built over the years. It’s not just hardwork and brain, but a lot of emotions you’re putting up for sale, is it not?

Flippa makes sure you get the cheapest success fee (fee on each sale) in the industry. It has this thing called “price match guarantee”

If you find a similar and comparable platform somewhere else, letting you sell cheaper, Flippa not only matches the price, but reduces its success fee 1% below whatever fee you found on the other platform!

Reviewed, Verified Brokers

This is what puts Flippa in a different league than most other “website auction” sites out there.

Flippa has partnered up with over 50 different brokers. These are some of the biggest names in the industry.

When you’re selling high ticket products, these brokers help you manage your listing, audit buyers, take care of your paperwork and basically everything else.

Sure, the fee is a bit higher than the conventional Flippa fee when you use a broker. But, these brokers also in most cases result in higher sale prices than you normally would’ve got.