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Thomas Smale, Professional Website Broker, Explains How To Value Your Website, How To Find A Buyer And Everything You Need To Know About Website Flipping

By Yaro Starak
20 Comments

 

Thomas Smale Thomas Smale is a website broker, who founded Flipping Enterprises. He helps connects buyers and sellers of websites and has been involved in more than $5 million in deals last year alone.

Before starting out in brokering, Thomas bought and sold websites himself, which is how he first created an online income stream. He still buys and sells for his own site portfolio today.

Download MP3 | Transcript | iTunes | Soundcloud | Raw RSS ]

In this interview you will hear how Thomas got his start flipping websites for spare cash, which then grew into a system for flipping that he taught via an information product.

After the quick background story, we then dive into pretty much everything you ever wanted to know about how to sell a website, including -

If you have any plans to sell your website or blog, or you are thinking website flipping is a possible online income strategy for you, this is an interview you cannot miss.

Resources Mentioned

Where to Find Thomas Online

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Download MP3 | Transcript | iTunes | Soundcloud | Raw RSS ]

Text Version

Click Here To Read The Transcript

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20 Comments

  • Great interview and I’m glad you touched on the topic of valuations as it’s a hot subject right now.

    I think part of the discrepancy between the valuations of smaller internet businesses (< $250K value), larger ones (above $250K), and offline businesses comes down to history and risk.

    Offline businesses have been bought and sold for hundreds of years, so if we want to know how to price a … hairdressers with $400K turnover it's fairly simple – look at historical sales of similar businesses in the same area and you've got a fairly solid base multiplier backed up by years of data.

    To do the same for an online business though is difficult, as we've only got data going back 15 years or so. Apart from the fact that the first few years were widely wrong (dot com bubble), the industry is constantly evolving, and most sales are private so overall we've got little data to base decisions on and even less data for the smaller sites (< $250K value).

    Factor in the added risk, especially when most smaller sites rely on Google for traffic (which is like relying on a drunk coach driver to deliver customers to a theme park), and you've got a likely reason for the huge difference in off and online valuations.

    It's not all bad though. The fact that things are a little Wild West right now is the perfect opportunity to make a relatively large return if you've a stomach for the extra risk. I've got more in a presentation I did here

    http://www.slideshare.net/JustinGilchrist1/valuations-in-buying-selling-export

    At some point in the not so distant future it will all even out, but until then I guess it's a case of 'making hay while the sun shines'!

  • Luke Farrington

    Great podcast, some very interesting views and I would definitely like to discuss this further with you! Coming from an offline background, you have certainly helped me understand a less-traditional way of valuing businesses. I appreciate your honesty and I admire your entrepreneurial spirit. Definitely would like to speak in person.

  • Richard Picard

    I appreciate this interview Yaro! I’m running a small blog myself that I started a year ago with help from your training materials. Maybe one day I’ll be able to sell it for a nice sum and I’m glad to know Thomas is there to help if needed.

    Keep up the good content!

  • This was a timely find for me. I have a few older websites- some with content on, that I havent done a lot with for some time- apart from renewing domain names and I have come across flipping before, but didnt really have the confidence to go down that route. The pdf transcript was useful information and I am going to have a go at it now. Great content on this site as well.
    Thanks

  • This was awesome interview. I like the whole discussion. There were some very important points.

    Thanks

  • hey Yaro and Thomas,

    awesome interview!

    I find the section of when not to use Flippa and other alternatives to consider when finding buyers very inspiring and helpful… I thought Flippa is the only or best way to go about it, thank you for an eye opener!

    Site flipping is something I’ll look more into for 2013 and beyond… do you see any specific trends in the market for this year?

    • Hi John,

      Being such a new market, the website buying/selling industry is constantly evolving.

      Some trends (both emerging and predicted) I would expect to see in 2013:

      - Buyers/sellers being more creative when structuring deals. As banks aren’t lending money, sellers are beginning to be more opening to financing deals themselves through earn-outs or other structures.

      - Apps. Apps haven’t hit mainstream marketplaces like Flippa yet, and I would expect the market for these to grow. Sites that are mobile optimised/have an app will be more desirable than those who don’t to buyers, so something to think about in advance, especially if you have an established site with a lot of mobile traffic.

      - Less desire for sites with organic traffic. Google updates wiped a number of sites of the map last year, so buyers are becoming more cautious of sites relying heavily on organic search traffic (especially sites lacking history). As such, buyers are becoming more accepting of new traffic sources that were previously seen as risky.

      As with all industry trends, the early adopters will be the ones who get ahead. With marketplaces like Flippa being extremely transparent, it’s very easy for people to copy ideas which makes many methods obsolete after a few months.

      Thomas

  • Jesus, Yaro, how can you do such long podcasts?!? this is insane! regards!

  • Great Podcast Yaro – very interesting. Hope to sell mine one day!

  • Yaro – I Got introduced to your blog by an ex colleague, I’m a follower now :)
    Flipping websites – unless it’s a good site, not worth the time. Great content though, cheeers.

    • Dario,

      Thanks for stopping by. Wouldn’t you say that “unless it’s good” applies to everything in business? Selling poor quality sites won’t work with site flipping (sustainably, at least), just the same as selling poor quality products (in any business) wouldn’t build you a good business in the long run.

      There’s no reason why you couldn’t sell quality sites (without income or traffic) if you had an excellent system in place. Sellers who turn this into a sustainable business will have excellent post-sale support and a series of upsell increasing their revenue by customer. It’s not always about the front-end sale, especially when selling sites.

      Cheers
      Thomas

  • Thanks for the share . Its always difficult to estimate the worth of the site that would sell .

  • An outstanding share! I’ve just forwarded this onto a colleague who had been doing a little research on this.
    And he in fact bought me breakfast because I discovered it for him…
    lol. So allow me to reword this…. Thank YOU for
    the meal!! But yeah, thanx for spending time to talk about this subject here on your website.

  • Rahail Salamat

    Hello, I just want to warn you guys. Thomas smale stole my money when I bought watchprem.com back in 2009. He is not trustworthy at all.

    He and the person who sold me watchprem.com convinced me to spend $2000 for a consulting service. Guess who was the consultant… Thomas smale and when I paid him, he never got back to me. He ran away with the money. So what can you say about a person whose past is full of frauds and debauchery? I think it is unfair for someone like Yaro starak to promote a fraudster like Thomas Smale?

    • Hi Rahail,

      This is the first I have ever heard of anything like this regarding Thomas. Have you got some evidence to back up your claim?

      Yaro

      • Rahail Salamat

        Yes. I have email conversations with thomas smale. I can forward them to you. Please mention your email and I will forward all the conversations I had with thomas smale.

        I know you are brutally honest and a good entrepreneur. I know you love to help people and I have known you since 2006. So I was surprised when you promoted Smale who is a known fraudster from U.K

        Thanks a lot for replying to my email. You’re an internet celebrity and yet you replied to my comment. This shows your concern. Kudos to you!

        • When you say he is a well known fraudster – can you direct me to any publications online that verify this? I would rather see public proof than personal emails since I can’t really know whether emails are legitimate.

          I’ve asked Thomas to come and reply to you here as well, so we shall see what he says.

          Yaro

          • Rahail Salamat

            I never said he is a “well known” fraudster! I said he committed a fraud by taking my money and never providing the services he was paid for. Please don’t twist my words.

            No, I don’t have any online publications that will prove him fraud. My email are legitimate. I dont think you can create emails and forward it to someone else. The email thomas smale used at that time is in those emails.

            I only have emails. I can show you those whenever you want. I have no online proofs. How can someone has online proofs that declares him fraud? I don’t understand your logic!

          • You wrote in your previous comment Rahail – “So I was surprised when you promoted Smale who is a known fraudster from U.K”. I’m asking for evidence online that he is a “known fraudster from the U.K”, as you stated.

            I’d be very careful writing something like that online publicly. I think this sort of issue should be sorted out privately, otherwise things can get out of hand. I don’t appreciate my blog being a place for accusing people of things that are more complicated than they seem.

            Thomas has explained his side of the story to me and is going to reply here as well. Hopefully you two can sort it out between yourselves.

            Yaro

  • Thomas Smale

    Hi Rahail,

    I have sold a lot of sites over the years and I remember that particular site. I do not have any emails from you, I am afraid.

    I do not remember anything to do with consulting, though. Perhaps you dealt with my partner at the time, Lewis (who often pretended to be me)? He ended up stealing a lot of money from our business at the time, me personally and clients.

    Nevertheless, I would like to make things right with you as it wasn’t your fault. Yaro passed on your email address, I will be in touch to see what I can do as I can assure you I am no fraudster.

    Thanks,
    Thomas

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