Did Lynn Terry Really Get Maximum Dollar For This Great Auction?

Recently I touched base with Lynn Terry from ClickNewz about her recent and quite public auction on Flippa for her great product, 5000 Backlinks. Without beating around the bush, the auction ended up finishing with a very low bid when compared with the amount of revenue that the site has generated, so in a nutshell, I couldn’t not do a write up about why I think that this auction went for less than it actually did.

Before I go too far, I am not setting out to belittle Lynn’s work, this is done with her blessings, and with the goal to educate others about selling websites. Ready for my thoughts? Lets get into this…

First off, check out the auction for 5000 backlinks, then read below.

The first thing that struck me when looking at this auction was the headline. The headline told me that this website was an SEO product that had affiliates, plus sold a great deal in pre launch. Now, the thing here is that there are a ton of auctions on Flippa that make the same claim, so the key here would be (especially when selling a site of such high value) would be to research what similar titles are selling for. When people search for an auction on Flippa, it is the headline that brings them in, so in this case, in order for people to find out that it was an auction by Lynn Terry, that it was for a well known link building package that has a very powerful name attached to it, people had to first click on that title.

The other thing, and this is just me being really picky is that a total amount (such as selling over 30k in pre launch) doesn’t sell me. I expect that this is the same for some people as well (not all though), as to buy a site, I would like that kind of income to be recurring. If the site has been up for some 6 months, then you could assume that the total averaged amount would be some $5000 per month. I would have used that instead, rather than telling the potential buyer what it has made. There is always a difference in what a site has made, compared to what is will make. This is however more of a psychological take on things, so you can take that as you will. Years of working on the sales floor has that effect on people!

In my opinion, I would have front loaded the domain, and used some kind of persuasive language in the title. For example, “www.5000backlinks.com – This Product Makes 5K Per Month Through CB”. Again, this title was done in a rush, and there are ample different variations. The idea is to get the searchers attention, and to bring them in to that auction compared to the other auctions on the same page.

My second observation is in the income reporting. In large part, if someone is going to sell a site for a large amount, then figures need to match up as close as humanly possible. It is easy for someone to fork out $297 for a site on Flippa, but when it comes to figures not matching up, especially for sites that are selling for upwards of the $2000 threshold, trust needs to be established, and figures need to be absolutely 100% consistent, or as clear to the untrained eye as possible.

In the title, it is claimed that the site sold over 30k in pre launch, however, if we look in the body, we can see that the total amount sold through Lynn’s list is $21,110, and the total ClickBank payments are $3176. This is far under the 30k as stated in the headline, however, when looking at ClickBank sales, with that product offering a 50% cut to affiliates, we can be sure that the total amount sold would come up around the $27k mark, adding on top of that the ClickBank fees would push it slightly over the claimed amount.

So, the problem here is not in the fact that the figures do not seem to be valid, it is that they are not 100% clear to the untrained eye. Even for someone like me, I had to sit down for about 5 minutes to figure out the figures and see how they work out. In this case, they certainly do, but for the average person looking to buy a website, this can in most cases be a deterrent as people are much quicker to lack trust in people than they are to earn it, especially online.

The other thing that I do have to question is exactly how well that income will continue on when a new owner takes over the site. As the majority of the sales that were made were of the $67 special price for the product, which was marketed by Lynn through Twitter and her lists, what happens when someone purchases the site and product, without her name attached to it, with potentially a much smaller and less qualified list. I think that the buyer that would most succeed with this site is someone who has an established list of qualified buyers, much in the same fashion as Lynn does. Unfortunately, this eliminates a lot of potential buyers, as this would mean that just from ClickBank sales, they would be looking at earning around $500 per month from the site. Still, better than a poke in the eye with a stick, but certainly not worth the $10,000 opening bid that the site started with.

Next, I would like to look at how the auction started. The auction started with a $10,000 opening bid, and was also tweeted by @flippa. Now, one of the most important things about any auctions is in getting as much activity as possible on that auction. This is why starting with an opening bid of $1 is something that I recommend regardless of the value of your site. If you feel uneasy about this, then set a high reserve to start with. The key is to get as many bidders as possible on that auction so that you can gauge what the market is willing to pay for your auction.

As you get more activity as well, your site will very quickly rise up to the top of the most active auctions page, which for those who have been there, such as myself several times, the amount of attention that you get when you are at the top of that page is just insane.

My best advice is this. Start out low, gauge the response, then act accordingly. As long as you have that reserve in place, you will keep yourself safe.

Lastly, I want to talk about the site stats. Pulling the domain up in Market Samurai, the site has very little backlinks to the site, which for a product site says one of a few things. It is probably not ranking for any of its main keywords (buying phrases), and it is probably not being marketed that well by the affiliates that are on board.

Now, I know for a fact that the sales copy converts very well for the site, as I am an affiliate myself, and it is the highest selling product that I promote. But compared to the amount that has been taken in on ClckBank for the product over the time that it has been available, what I have earned from the product is actually quite a large chunk of that amount in comparison to a lot of other products that I market (You can shout me a Latte next time your in Melbourne for that Lynn by the way! ). What this says to me is that there are very little active and good affiliates marketing that product, which is not really a huge selling point.

The other thing to consider as well is that most ClickBank products cant be transferred to other accounts whilst retaining the current set of affiliates. Most of the time, the product needs to be created again, and affiliates need to be earned again. With the loss of the marketing that Lynn does from her list, plus the ClickBank affiliates, this does not mean good news for a potential buyer. That is of course, unless the account itself is going to be transferred, which I know a lot of sellers do not do.

So, at the end of all of this, what is my advice?

I would tweak the headline so that it converts more people who are searching for the auction. I would be more clear on the “take home” amounts when it comes to earnings. I would definitely start with a $1 opening bid, with a fairly average reserve that I could be somewhat happy with (website flipping is and always has been a bit of a gamble with a high risk of loss). I would have also focused on a bit more SEO, and created some kind of backend content that helps rank the sales copy for a handful of good buying phrases that bring in people looking to buy one way backlinks.

I would have also provided the monthly earnings in the headline, as I believe that recurring earnings are more lucrative. You can dissect that one however you like, some will agree some may not. I would also have been much more clear on earnings, and would have represented them in a way that absolutely anyone can understand and figure out. Rather than make claims of how much it has sold, I would have claimed the take home earnings, and would have used some persuasive language to emphasize that too.

As a side note, I would also have looked into installing a back end affiliate management system, similar to iDevaffiliate. In this case, that would mean that when the website sells, all of the affiliates come with it. What this means is that the new owner can literally install the site, and monetize it straight away. However, this is an extreme option to take, but undoubtedly would add a large amount of value to the site.

Would I settle for $3100, considering that it is below reserve? No way. The site can sell for much more, permitting that the value that the site currently has can be transferred to the new owner. As it stands, the site loses quite a bit of it, but based on the amount that it would seem likely the new owner would earn from taking over this site, I would expect that around the $6000 mark would be an acceptable price for it, as it is right now.

Now, there is a ton more that I could offer, but this is going to end up being the largest blog post that I have ever done, so I will leave it there for the moment. If anyone has any questions, or any more feedback that they would like to offer, feel free to use the comments below, or even better, shoot me a response.

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