2020 Market Trends with Flippa CEO Blake Hutchison

Online market trends with Blake Hutchison and matt and liz raad

Are there NEW opportunities in the buy and sell websites marketplace due to Corona Lockdown? In this article…

  1. Get valuable insights into future growth niches on the internet
  2. What are the biggest profitable money making trends online for 2020?
  3. Where are the easy wins online that the buying and selling website market can now show us due to the Corona virus effects?

Perhaps one of the biggest online trends in 2020 is due to the Covid 19 lock-down dramatically increasing the number of people looking for ways to earn money online. With the uncertainties around people’s jobs, and everyone basically forced to work from home, buy and sell website marketplaces like Flippa.com are seeing an increase in people looking to buy websites that let them earn money at home online.

We recently interviewed Blake Hutchison, CEO of Flippa.com, to give us a market update on what is currently happening in the buying and selling website space and to see if there are there any new opportunities due to the Corona virus situation.

Flippa.com is one of the biggest marketplaces for online businesses, and as a result have really insightful data on where money is currently being spent for website purchases.

Blake shared with us some really interesting online niche trends that he is seeing right now based on the vast data that Flippa has from people looking to buy or sell websites.

There are some real gems in here, so pay special attention – particularly if you’re looking to buy established websites for profit or build websites to sell at a later date, or if you are just looking to for ideas on the best 2020 lucrative online niches to be in.

CLICK ON THE VIDEO BELOW to learn what are some profitable 2020 niches on Flippa right now

Liz Raad:          Welcome everyone. Today we have a very special guest, Blake Hutchison from Flippa.com. Wow Blake, this is a really interesting time in the website buying marketplace.

Blake Hutchison:         Yes, very interesting times. You are both obviously working from home. I’m doing the same thing. We’ve had both of our Austin and Melbourne offices working from home for some time now. We’re all in it together and it’s been an interesting time for us as a digital asset marketplace.

2020 – A changing environment where more people are looking to work from home online

Matt Raad:      Yes, and that’s what we wanted to talk to you about today. We wanted to have a look at some of the online trends you’re noticing in this new Corona environment. When we’ve been speaking with you prior to this interview, and also with our private group of clients, you shared some really interesting trends that you’re currently seeing at Flippa. It would be great to hear some of the data you’ve seen now that we’re living in a time where everyone is obviously getting online.

Are we able to ask you some direct questions and see what the data is that you’re seeing there at Flippa?

Blake:              Absolutely. It’s been really interesting for us because we are very much a customer (and data) driven organization.

“We speak to a lot of sellers and buyers to understand what their appetite is right now – both for buying and selling websites” – Blake Hutchison, Flippa

We’re also able to interrogate the data to see what people are doing on the platform. That provides a great amount of insight, which is interesting and it’s also important to us as a company that brokers website sales. But what’s also important is that customers can act on that insight.

Liz:                   Yes, and even at the most fundamental level, you’ve actually seen huge growth in the last few months?

Flippa data shows an increase in number of people wanting to buy an established website

Blake:              That’s right. What’s super interesting is that whilst we haven’t necessarily seen a huge incremental increase in the number of digital assets being listed; what we’ve seen is a huge increase in the number of buyers registering.

So, we’re obviously a two-sided marketplace, predominantly a peer to peer marketplace. We absolutely have the supply-and-demand side.

People Wanting To Sell Websites…

For supply, we mean people who are listing a website for sale; i.e. a money making website, an online store or any other digital property.

People Wanting To Buy Websites…

And then you’ve got the buying community. This buying community is there to do one of 3 things. Either:

  1. Buy a website to supplement their income (let’s call it a side hustle).
  2. Replace their income in full with a money making website (i.e. its income producing and you can run with it).
  3. And then you’ve got website investors. So those people who have been buying and selling websites for some time and they’re looking to acquire even more assets to add to a portfolio approach.

And what has been super interesting is just the huge growth in people interested in buying websites.

For the month of April 2020, website buyer registration was up 32%.

That took us to just over 24,000 new registered users who had set preferences. This preference setting piece is important because that talks a lot to:

  • The categories that people are interested in,
  • The budgets that people are allocating for the acquisition of a digital assets,
  • The geographic areas of interest.

And so for that amount of interest in April 2020, we think is most likely a leading indicator for future months. In addition to that, it’s indicative of the overall economy to some extent; and this fast-tracked movement towards the digital economy.

The marketplace for Buying and Selling Websites to create a home based business is becoming more popular

Liz:                   That is really interesting. And so, now we’re seeing a lot more website buyers coming into this marketplace, which is great because it means this marketplace is becoming more well-known. You could say it’s becoming more “legitimized”.

I think for a long-time people have looked at online businesses and thought, “Ah no, that’s not real.” So, we’re really excited that marketplaces like Flippa are really gaining a lot more traction. A lot more people are realizing that these websites are real assets and is something you can use to replace a job and work from home online.

What do you think that’s going to do for website valuations going forward? We’ve got a lot more buyers now, but we’ve also got some interesting times coming up in terms of economically. Do you have any kind of inklings yourself what you think might happen there?

An increase in eCommerce websites for sale as more people spend more time working from home

Blake:              There was a report that shows for the US in particular, eCommerce was up 49% for the prior month. That’s clearly coming off a large base, and the US isn’t a small economy to begin with. So, I think what that means is clearly the big boys are up, the Amazons, the eBays, etc.

“People are spending more time at home and working from home, and therefore consuming more from home”. – Blake Hutchison

But in addition, the small business ecosystem (which is moving online) is going to benefit too. Now hopefully what that means is that you see a faster maturation of these digital assets. So small business owners are getting bigger, faster and they are getting to a point where they can recognize the value in what they’ve created a little bit faster also.

So hopefully what it means at least (as it relates to eCommerce), is that a lot of these digital asset owners get to that point where they’re able to sell and realize a fair valuation for their ecommerce businesses. So hopefully long-term what it does mean is more digital assets available for these buyers.

Look for website buying opportunities across some harder-hit niches

In regard to categories – clearly some categories have really struggled. So, I think that you’re likely to see valuations decrease for a certain group of assets within those niches where they’ve been hard hit.

Maybe those website owners need money right now. They can’t hold on, or they can’t wait, so they need to sell now. This creates an opportunity – particularly for a certain group of buyers who are interested in those particular industries where there could be some macro-environmental challenges. Maybe they can pick up a better priced asset.

Liz:                   So, there might be some good opportunities coming up to buy profitable websites. Did you have any niches in mind when you were talking about that?

Blake:              If it’s helpful, I can give you guys a sense of the difference between January and April from a search standpoint.

Liz:                   That’ would be great! This is real data, live from the CEO of Flippa about what’s happening in the marketplace right now.

Blake:              And it’s fun to talk about this stuff! I guess it’s also indicative of the macro environment and certain challenges that certain categories are having while other online categories are having their time in the sun right now.

Changes in search trends on Flippa for people purchasing website assets

So firstly, let me just set the scene a little bit…..

This data comes from buyers using Flippa’s search experience. So, the top of the Flippa homepage and across our category pages, there’s a search box there. That search box is no different to what you see in other marketplace environments and similar to what you see obviously in a Google search environment.

Where to buy a profitable website on Flippa homepage

And what people are doing is they’re either searching by a:

  • Keyword or
  • Type of digital asset they want to buy.

And it’s important to realize because when I read these out, you will see that some people are searching by the online business model and some people are searching by category.

Our customers generate just over 10 million searches each month, so this data is statistically significant.

The Top Searched types of websites to buy on Flippa.com…

So, let’s go back to January when the world was what we might have considered “normal”. Now in January 2020, here are the top 3 searched terms in Flippa:

  1. The Number 1 searched type of website to buy on Flippa was a Travel site. That could be a content website, or it could be an eCommerce retailer of travel etc.
  2. Number 2 was Amazon.
  3. Number 3 was CBD, being cannabis and cannabis-related product.
  4. Number 4 was Blog. So, people were looking for blogs to acquire. They were less interested in searching by category. They may have narrowed down that search a little bit further on their buying process, but their top-level search was blog.
  5. And then number 5 was AdSense.

So that’s your top five in January 2020.

If we look at last month April 2020, there are some that are still in the top five, so let’s have a look:

  1. Number 1 is AdSense. So, AdSense went from a 5 to 1.
  2. Number 2 is blogs. So, that rose from 4 to 2. And of course, a lot of blogs are backed by AdSense revenue.
  3. Number 3 is Amazon. So that’s gone down from 2 to 3.
  4. Number 4 is Fitness. This is interesting, because back in January, fitness was only just in the top 20. So that’s a big change to move to number 4.
  5. At number 5 is Education.

Websites monetized by AdSense make great passive websites for sale

Liz:                   So that’s interesting. We always say that AdSense is a very blue-chip monetization. We’ve been in this game for over a decade and AdSense has always been one of the highest valued content sites.

Matt:               Yes, when we have students building their portfolio of websites, we always advise them to make sure they own one or two AdSense sites. Isn’t it interesting now it’s the number 1 searched site on Flippa out of 10 million searches? They’re popular websites to purchase.

Blake:              And as you’ve pointed out Matt, there’s some maturity in that business model, so people tend to understand it. And (of course), AdSense revenue is indicative of a good content website.

Online website buying trends for people wanting to be educated and staying fit

Liz:                   It’s interesting to see the increase in people looking for websites to buy in the fitness niche.

Blake:              Correct. And that’s because the buyers are recognizing that there is a burst of energy for fitness-related product and information. Therefore, if they can find an asset which is currently for sale, it’s a real opportunity to quickly optimize for revenue generation.

Liz:                   And the increase for the education niche makes sense too. Online education. Essentially, people are being at home, getting educated and keeping fit.

Blake:              Education is obviously a very big category, particularly with the passion economy continuing to take off and be an area of interest for lots of people. The passion economy is defined as me being passionate about something that I can build an online community around. My community feels equally as passionate about it. So much so that they’re willing to pay me for my insight and online education does cover the passion economy as much as it does the traditional education niche.

Liz:                   Yes, that makes a lot of sense.

Consider the change in market trends when looking for website buying opportunities

Matt:               So, there’s some really interesting opportunities here for our eBusiness Institute community. What else have you noticed that changed over the recent months?

Another up and coming online niche to pay attention to:

Blake:              Well, number 8 on my list (and I can’t quite get my head around it!) is dating. People are searching for dating-orientated websites on Flippa to purchase. In January 2020 it was number 19, and now it’s number 8, so that’s a very significant move.

Liz:                   That’s something to take note of…

“Our situation at the moment in the world isn’t going to go away in the next month or two. I think there are fundamental shifts in the way we’re doing things” – Liz Raad

And so, in terms of assets, this is really good data. Whether you have your own digital assets or if you’re looking at buying digital assets, this shows you some of the niches where there is going to be growth and confidence.

That’s another thing that you always consider when you’re buying a website. What are the growth markets? If you can have a website that is in a market where a lot of other people are interested in a buying, they are always going to be more valuable, and more likely to sell at a higher price because there’s more buyers.

Blake:              That’s right. I think that what you’re recognizing in this keyword data here is that there’s clearly a large growth in the number of potential website buyers who are looking to buy websites so they can earn income online from home. So, I want a website that I can optimize today and get instant revenue recognition for my efforts.

But then you’ve got some other people (and maybe dating is indicative of this), where some people are saying, “Well actually, whilst I accept the current face-to-face contact limitations, dating has fallen off a cliff. But that doesn’t mean it’s going to be like that forever.”

And what we know is that all over the world there are governments relaxing some of their Covid-19 requirements and maybe there is a burst of energy for some online niches coming out the other side in three to six months’ time.

“Now what better time to go and buy something that might be on a downward curve, optimize and get ready for the new generation.” – Blake Hutchison

2020 Online Trends: Big opportunities for profitable websites under $10,000

Matt:               Well, talking about other opportunities in buying and selling websites…the eBusiness Institute community has a wide interest in buying, building and selling websites for profit.

Now that we’ve got this massive interest in buying websites on the other side, what are the sites that you’re seeing currently, and what price range are the ones selling the best?

Blake:              That’s a really great question. I think time will tell how difficult Covid-19 has been for all manner of small businesses. On Flippa, what we know is that over the last month and a bit, the number of sites sold over the $10,000 mark up to literally $1 million dollars, has dried up a little bit. And that is clear function of those people who have money, recognizing that there is some risk to that and that they may want to save that for a rainy day.

But what we’ve seen is a huge increase in the number of websites sold under $10,000.

And so, what’s happening is, you’ve got more website buyers entering the space for the first time. Our recommendation is that you always start small and you always place what we might call “a safe bet”. And so that’s probably indicative of why you’ve seen a spike of interest of website purchases below the $10,000 mark.

Matt:               There’s some fantastic opportunities there for everyone. If you’re building smaller sites and you want to get a good price, or you want a really quick sale, you just heard off Blake, (CEO of Flippa himself), telling you there is a lot of demand at the moment for websites under $10,000 and that’s fantastic.

Liz:                   And if you’re looking for those higher-level website investment deals, there’s probably a good opportunity there if you’re a website buyer to be negotiating at the moment.

Blake:              100%. I think that it does depend a little bit on the niche and the business model. So Amazon associates websites right now are under a little bit of pressure because Amazon has obviously reduced their commission pay outs.

I think that given the importance of cashflow to a lot of people right now, if you’re a website investor lucky enough to have between $10,000 to $50,000 to spend, I do think you can negotiate and I do think you can get some good value in the marketplace right now.

Liz:                   That’s fantastic Blake. You’ve given us some really amazing insights into what’s happening in the marketplace right now, some of the opportunities out there, interesting niches, and interesting trends that are happening.

Thanks so much for being with us. We look forward to catching up again soon and seeing how this marketplace develops over time.

Blake:              Absolutely, thank you Matt and Liz. Always a nice opportunity to catch up.

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About The Author

Liz Raad

Liz Raad is a website investor, Angel Investor and leading educator on Digital Investments, and is recognised as the Australian expert in buying, renovating and selling profitable websites and businesses. Connect with Liz on Facebook, or LinkedIn.

2 Comments

  • Raymond Hackney

    May 24, 2020

    Thanks for the insight Liz it’s nice to have Blake spend a solid 20 minutes on the current state on the business. I thought it was interesting to see CBD drop out of the top 5 and Fitness move into the top 5.

  • Liz Raad

    May 25, 2020

    Hi Raymond – thanks, you’re right – it’s very interesting to see the trends from this unique angle. Perhaps there are still enough restrictions around CBD (like advertising and social media restrictions) that make fitness based websites a more sought-after asset than CBD ones.