Flippa
Flippa – I’ve Spent $35,700 on Flippa, What did I learn? Avoid my mistakes. Learn from my experiences on Flippa by watching the video below or reading the article that outlines the lessons:
Pre-Flippa: My 9 to 5 Background
I’m going to start by giving you my background from the first business I started to feeling trapped in my first 9 to 5 job to spending $35K on sites from Flippa to where I am now. I’ll take you through my experience with Flippa and what I learned form each purchase so you can learn from my mistakes and successes and get a feel for what’s possible buying websites on the Flippa platform.
I remember when I was really young, in elementary school and high school, and I would see my dad and other adults go off to work each day and come home each night, and I always assumed they were all so happy and having so much fun each day at their work!
I never thought about my own work or future at that point or even looked forward to it and I never wanted it to come faster, I just assumed when I got there it would be great and that I would absolutely love each day. I never even considered the possibility they were only doing it for money or what each day really entailed. I think I assumed because they were adults and knew everything and had everything under control that they were choosing to go to a fun place each day to something they loved to do, it never even crossed my mind there was any other possibility. I never thought about salary or salary caps or freedom or anything, I didn’t even really realize people got different amounts of money for different types of work – it wasn’t something I ever thought about.
Even in college, I never connected my major to the job I would eventually have. I didn’t even think about choosing a major connected to my future job, it never really crossed my mind, which looking back doesn’t seem very bright, but I wouldn’t go back and change a thing.
I graduated from Boston College and found out later that my dad had wanted my sister and I to apply to the Carroll School of Management, aka the business school at BC so we would have better paying job prospects, but my mom told him we should be able to follow our hearts and choose the majors we were most interested in.
It’s funny because I love business and my first job was even in marketing, but it never crossed my mind to major in ‘business’ because I clearly was not thinking in any type of long-term way since at this point as I still assumed everyone got a job they loved and went away each day to a fun retreat type setting or something – honestly I never gave it much thought.
So I majored in psychology in the school of arts and sciences at BC because I loved psych classes, and I knew from the start I never wanted to be a psychologist or go to any more years of school – that never interested me. I was able to get a job running google ads for an ecommerce marketing agency, mostly because I’d already run google ads in an unpaid internship the past summer, not because of my psychology degree. However having a college degree definitely helped me get the job, and I don’t think that company or most companies will hire you without some type of college degree.
I was so excited to get my first job offer and to finally be a true adult and going to the special adult work club each day. I actually loved my first three months at my new job and thought it was such an exciting, fun and new experience.
Once I settled in I realized how constricting it was. My boss actually sat me down and said, “ I noticed you have been eating lunch away from your desk each day, for over half an hour?” I said,”yes, I like to go get lunch and eat it outside and stretch my legs, it’s nice to have that time to myself” he said “that’s not how we do things around here. You should try to start packing lunch and eat at your desk for no longer than 15 minutes each day.” I remember being flabbergasted that he would even say that.
In his mind, and most company’s mind, they are paying for you like some type of ‘workhorse’ and they want you to be seated at your desk for 8 to 9 or in some cases more hours each day, and that is how they measure your productivity and dedication to your job. They don’t care about your results as long as your results are mediocre or better. If you only worked 4 hours each day but had insanely good results they would definitely fire you which doesn’t make any sense at all but that’s how it is because of the way companies look at owning you and your time.
The funny part is sitting all day is unhealthy, and honestly even worse for productivity because you need to get up and move in the middle of each day for blood flow and to think more clearly.
I know now every time I take my midday run, it completely resets me mentally and physically and I’m able to start working again after it with an incredibly clear mind and start working as effectively as I was at the beginning of the day again as opposed to petering off mentally with tiredness and anxiety as I used to after the half way point each day at my 9 to 5 when I was stuck sitting in the same position the entire day.
Companies including my 9 to 5 roles also don’t pay you based on results, with the exception of commission in a handful of sales roles, so no matter how long you sit there each day and no matter what results and revenue you bring in to the company, your pay stays the same or goes up very slightly. Effort and results aren’t tied to pay in a normal company setting.
For me, even worse than the pay caps and no match between effort results and salary, was the lack of freedom, and the relentless sitting each day, and that started to wear on me mentally. The fact someone else owned me, and my time, and that even a simple vacation request had to be submitted and could be denied, which actually happened to me at my first job, and vacation limited to a small number of days each year, and that I needed to sit in a chair for 8 or 9 hours each day plus two hours of driving each day, meant I had only a handful of hours truly to myself each day, and only a handful of hours I could do anything but sit forced and trapped staring at a computer screen each day.
I remember my face would get really inflamed and red from anxiety of feeling forced to be sitting at my desk for the 8 hours each day. The company wasn’t paying for results, they were paying to have me chained to my desk each day. Every company does. I guess it’s an easy way for them to measure your perceived effort even if it doesn’t help them maximize their own results.
Anyway, I realized a few months in that I would really rather have control over my own time each day, and I would really rather see a correlation between my effort, results and salary as opposed to some type of artificial cap where I could never really make over a certain amount.
I kept working there and learned a ton about paid ads and SEO and ecommerce marketing so it was a great learning experience, and I was able to learn even more online marketing skills that have helped me tremendously to get a website investing ROI and still help me to this day.
Flippa Mistakes: My First Flippa Purchases
At my third 9 to 5, working in the marketing department at a financial technology type company, I started reading even more financial freedom and how to make money online blogs and for the first time I started seriously implementing what I was reading.
This is the time I read a Niche Pursuits blog guest post article where I learned about Flippa, a website buying and selling platform, and I had more disposable income than I’d ever had before at this time due to a multi five figure salary raise I’d gotten when I’d switched from my second to third job. This was when I took the leap to purchase a website on Flippa while I was still at my 9 to 5.
I remember scrolling through hundreds of pages of both live and expired listings, poring over each one and trying to figure out which to buy. I was really desperate at this time in my life in the sense I felt I needed to be making more so I could stop feeling anxious and trapped all the time. My desperation put me in a poor place to be making any type of buying decision, but I didn’t realize that at the time.
I ended up rushing into buying a small website that educated people on technology and iPad case coverings monetized with amazon affiliates. I paid $1,300 for the site which the owner claimed was making $350 profit a month, so I thought oh this is an incredible deal I’ll be able to make back what I paid for the site in less than 4 months, this is great! He even showed me revenue screenshots from his amazon account that showed over $300 each month in affiliate commission, and I had Google analytics access to the site before buying it.
I remember my gut telling me there was a red flag. When I looked at the amazon affiliate screenshots, the majority of the purchases were not technology related, they were bible or other related, and the thing about amazon is they pay affiliate commission on all purchases someone makes after clicking your link, not just the direct purchase of the item you inspired them to purchase.
This means logically there could have been a lot of other non-related commissions being received. But I had a feeling there was something off, but I ignored it out of desperation to buy a site that was making money. And I told myself, worst case scenario it has to be making something.
At this point I’d never evaluated a site to determine how much it is currently making and what its potential is via google analytics so I saw it had around thousand visits a month from only 30 or so visits a day and thought maybe it just had a very high conversion rate etc, I wasn’t diving deep to verify things and I was way too trusting.
Another red flag was he was selling it for a 4X monthly profit valuation and I knew that the going rate for sites at this point in time was 20X monthly profit valuation, another “too good to be true” signal.
I put in my offer and bought the site and transferred it into my hosting account. I remember getting the first affiliate commission from it for a few dollars and how excited I was. It really is a great feeling to make your first few dollars from something online, if you’ve done this already you’ll know what I’m talking about. And then there were crickets.
I realized pretty quickly he had lied about the site profit and revenue and that I’d fallen for a Flippa scam.
The site was only making around $20 a month, and the previous owner had said it was making $350. Turns out I had paid a 65X monthly profit valuation multiple when I thought I was paying a 4X multiple, and had been lied to about site revenue.
I reached out to the seller and he never responded of course, and to Flippa to report his account, and they were able to take action and deactivate his account, but I had been lied to and had fallen for one of the many Flippa scammers who try to lie about revenue to sell sites for a lot more than they’re worth.
Looking back it ended up being a great first lesson for me because I’d only lost a small amount of money, $1,300, to learn such an important lesson that has likely saved me from losing tens of thousands I could have lost if I’d made that mistake on a bigger site purchase.
Imagine if my first $1,300 site purchase had been an honest good purchase, and then I’d lost way more on my next bigger site purchase that was a scam. I definitely got lucky that I only fell for a scam on my first very small purchase because the main takeaway I got was a lesson to never fall for any similar scam again.
You have to remember that no platform has time to really dig through everything which is why you as an individual, always have to verify everything and dig through everything before you make a purchase, before we make any investment before you buy stock, you need to look at all the financial statements and dig through it to make sure it’s a solid company. Similarly, you have to do the same thing before you buy real estate before and before you buy any investment. For example, you have to go and inspect a house before buying it and make sure it checks out as well as look at historical rental rates in the area and other numbers to determine if it is a good investment.
Even though my first purchase didn’t end up having a positive ROI,=it also got me hooked on Flippa and buying websites in general, because it was making a little bit of money when I first bought it. I remember seeing that money go into my Amazon affiliate account.
It was just a few dollars and I thought so happy because I realized what was possible with owning a website and buying websites that you could actually make money online, it really opened my mind I never even realized websites could make money. The first site purchase ended up being a blessing overall because it encouraged me to keep going.
Lesson 1: Dive Deep into Verification
The lesson I took away from that experience is that if you’re buying any type of investment, including a website, you need to go deep to verify revenue and stats and make sure the seller is honest and telling the truth. You also need to use the common sense test to look at all the website traffic and industry average RPMs and do your own calculations in addition to getting revenue verification screenshots, looking at video earning reports, and diving into analytics to check not only traffic numbers but traffic sources, location, language and more.
Lesson 2: Don’t Ignore your Gut or Red Flags
You also need to listen to your gut if it’s telling you there’s a mismatch, like in my example where a technology site was getting its main revenue source from bible affiliate products and when a site is only getting 28 visitors a day but the owner tells you it’s making $350 a month Which doesn’t past any type of gut or common sense test or even logical test if you site down and work the numbers out and truly think about it.
What you need to realize is there will always be people trying to lie to get more money, yes on Flippa, and yes even when you’re buying a house or buying any type of business or even product. People lie if they can get away with it.
So you need to assume nothing is valid up front and go deep to verify everything on your own before making a purchase to avoid falling for any type of scam.
Lesson 3: Only make investments with a clear, calm mind
The other lesson I took away from this site purchase is to only buy a site when you are calm and have a clear, non-desperate mindset. It’s similar to making a decision when you’re angry, or texting someone when you’re drunk or angry. None of those actions will end well. You should only make a big decision or purchase when you’re in a good, clear state of mind.
It’s also important to listen to your gut even after verifying everything with logic. If something feels off, it probably is, and your gut is a lot smarter than you give it credit for, so if everything checks out on the verification end but you still feel something is off, then my advice would be to not buy the website.
In this specific example, even though I was a website buying newbie and had no idea even how to verify revenue or what a site getting 28 visitors a day in the tech affiliate niche should be making, if I had listened to my intuition that was screaming red flags I wouldn’t have made the purchase.
However, only listening to your gut can only get you so far, you need to have a handle on revenue verification if you’re buying a website, no matter how good your intuition is.
Lesson 4: Weed out sites early on using Flippa’s Verification Features
This website also wasn’t using any of Flippa’s verification features which include google analytics verification and google adsense revenue verification, and I now only even consider sites on the platform that have these two features enabled, so I can weed out fake sites sooner to only dive deep into ones that already have basic traffic and ad revenue verification enabled.
Lesson 5: Buy sites with long-term potential, not fad or trendy
The final lesson from my first site purchase is the content was based around the current iPhone and iPad models, which meant every time a new model came out you’d need to update the content. I now look for evergreen content when buying now so I can focus more on stable growth and long-term revenue producing content, so the cyclical content nature of the site would have been another red flag for me since I buy sites for long term revenue potential that don’t require constant content updates.
My Second Flippa Mistake – Site Purchase #2
I was still at my 9 to 5 at this point when I decided to buy another website, this time for a much larger investment, $10,000. I applied my revenue verification lesson and was 100% certain of the site’s amazing traffic and revenue before I bought it. I also knew I could switch ad networks right away and 2X or more the revenue, so I knew it was a great purchase.
Again, my desperation this time combined with over-confidence lead me to make the purchase.
I was right that the traffic was great and I was right about quickly doubling the revenue, so at first I thought I’d made an amazing purchase.
The issue was the website was based on a trendy app’s popularity, and a few months after I bought it the traffic tanked and so did its revenue.
I did make over $5K back from that purchase from first few months of great performance, but I ended up losing a bit on the total purchase price.
This time I lost money not because of a dishonest seller and definitely not because of Flippa itself, but because I had made a bet on something trendy and short term, not thinking about a long-term content play.
Main Lesson: Focus on sites that are long-term investments, not short term money plays
I was still at my 9 to 5 at this point, and had lost $4K or so my previous two website purchases combined, but I had also learned a lot from the mistakes I’d made.
I knew there was an opportunity to buy a website that could help me achieve my goal of financial independence and I knew I now had the knowledge and skillset to make a good purchase.
I took the lessons I’d learned from my previous two purchases and I was very careful to verify traffic and revenue and to buy a site that had evergreen content and long-term potential, and one that I knew I could quickly increase revenue on in several ways.
How to Have Success with a Flippa Purchase
I bought my third site while still at my 9 to 5 and it was my first success and is what gave me my foundation for financial independence.
On my third website purchase I was able to quickly double the revenue again like I had with my second Flippa site purchase. So in other words, I was able to see how a site could actually make money and how a successful purchase on Flippa works.
With this purchase, I made back all the money I bought from other sites plus more plus profit. This site ended up having aI really good return on investment, and I was able to see how successful website runs and works and how a good purchase on Flippa works.
You have to remember that there are tons of good listings on Flippa, you just have to know what you’re doing and understand the space to make a good purchase.
My fourth Flippa purchase is the one that really knocked it out of the park and enabled me to fully support myself on my own and move out of my rent free living at my grandma’s in the Chicago suburbs.
The site was in a great niche I was able to expand using SEO and consistent content publishing over time.
Flippa Success Lessons
- Lesson 1: Use what you’ve learned from previous sites, investments and purchases to improve your decision making
- Lesson 2: Implement quick wins such as quick SEO wins, ad network changes & placement changes to quickly increase revenue
- Lesson 3: Look for long-term value in sites
- Lesson 4: Use long-term SEO and content adding to grow sites over time
The takeaway is that Flippa is a great place to find undervalued assets is amazing if you look closely enough, and you put in the time to grow them consistently each day.
Flippa assets, and website assets in general, tend to be undervalued as compared to any other type of asset, real estate, you’re lucky if you make your investment back in five or six years in my two successful website investing cases.
My two successful Flippa site purchases I made back my purchase price within 10 months. I increased revenue off the bat and long term for these purchases.
One thing to keep in mind is that website multiples are continuing to go up so you have to make sure you are finding a good deal and a good timeframe that you can actually make it back end websites are a great area to invest in right now they’re a great asset. You can also plan on improving and then selling the site as the multiples keep going up.
Of course there are risks involved, and you can make mistakes. As I mentioned earlier, Flippa has a great selection of sites and is my favorite website broker because it doesn’t vet sites so you have to take on the vetting yourself, and that means you can actually find better deals.
When a broker vets sites they hike up the commission, and this includes broker sites like Empire Flippers that hike site prices so they can take a large cut, making the deal less good for the buyer. I like other website brokers too but Flippa is actually my favorite and I have bought most of my websites from Flippa and had a great overall experience with them.
You guys can let me know if you have you bought a website from Flippa in the comments.