Flippa Guide - How to buy an undervalued website on Flippa
Summary
TLDRThis video script offers a detailed guide on purchasing profitable online businesses through the platform Flippa. It covers essential steps, including evaluating business legitimacy, assessing SEO ranking, traffic, competition, and financials. The speaker shares personal strategies for identifying potential passive income sources and ensuring the business is not a scam, providing a bonus checklist for due diligence and emphasizing the importance of verifying financial data with the seller.
Takeaways
- 🛍️ Buying online businesses can be done affordably, sometimes for as low as $50, and offers an opportunity for passive income or financial freedom.
- 📈 The website Flippa is highlighted as a platform where one can browse and evaluate different types of online businesses for purchase.
- 🔍 Due diligence is crucial when purchasing a business online, which includes understanding the business type, website appearance, target demographic, and legitimacy.
- 💰 Key financial aspects to consider are the company's SEO ranking, traffic, marketing, competition, workloads, and overall financial health.
- 🚫 The video mentions avoiding businesses that appear to be scams and provides a bonus tip on how to ensure the legitimacy of a company being purchased.
- 🔑 The importance of checking the monetization method of the business, whether it's through ads, affiliate sales, or a mix of both, is emphasized.
- 🌐 Analyzing the website's traffic and user engagement through tools like Google Analytics and SimilarWeb can provide insights into the business's performance.
- 💬 Communicating with the seller to ask for more information, such as revenue breakdown and access to analytics, is recommended to verify the business's financials.
- 📊 The script discusses the significance of the business's revenue multiple and how it can indicate the potential return on investment.
- 🏆 The potential for a quick return on investment is highlighted, with examples given where the purchase price could be recouped within a year or less.
- ✅ The necessity of verifying the provided numbers and having a meeting with the seller to review the business's operations is stressed for a successful purchase.
Q & A
What is the purpose of the video script?
-The purpose of the video script is to guide viewers on how to buy profitable online businesses, particularly through the website Flippa, and to provide tips on evaluating each deal to ensure a good investment.
What is the minimum price mentioned for starting to look for an online business on Flippa?
-The script mentions starting to look for online businesses listed on Flippa for as little as $50.
What are the key factors to consider when evaluating a business listing on Flippa according to the script?
-The key factors include understanding the type of business, assessing the legitimacy of the listing, checking SEO ranking, website traffic, marketing competition, workload, and the financials of the company.
What is the role of the website 'stethoscope.ninja' as described in the script?
-The 'stethoscope.ninja' is an affiliate sales company in the health and beauty industry, making money through Amazon affiliate commissions.
What does the term 'revenue multiple' refer to in the context of buying a business on Flippa?
-The 'revenue multiple' refers to the ratio of the listing price of the website to its average monthly income or net profit, indicating how many months of profit the buyer would get based on the purchase price.
Why is it important to verify the numbers provided by the seller of an online business?
-Verifying the numbers is crucial to ensure the legitimacy of the business and to confirm that the financial information provided by the seller is accurate and reliable.
What is the strategy for contacting the seller of a listed business on Flippa as suggested in the script?
-The strategy involves messaging the seller to ask for more detailed financial information, requesting access to tools like Google Analytics, and potentially setting up a meeting via Zoom to discuss the business further.
What is the significance of the website's traffic source as mentioned in the script?
-The significance of the website's traffic source is that organic search traffic indicates good SEO, which is beneficial for the website's visibility and potential for passive income.
What is the potential downside of a website with a downward trajectory in page views as indicated in the script?
-A downward trajectory in page views suggests that the website's performance is declining, which could negatively impact its revenue and value.
How does the script suggest assessing the competition for a listed business?
-The script suggests checking the competition by looking at similar businesses and analyzing their strategies, which can provide insights into how to add value to the business being considered for purchase.
What is the recommended approach for bidding on a business listed on Flippa as described in the script?
-The recommended approach is to determine the maximum amount one is willing to pay based on the analysis of the business's value, and then bid an amount that is higher than the current highest bid but less than the determined maximum.
Outlines
🛒 Buying Online Businesses on Flippa
The speaker introduces the concept of purchasing profitable online businesses for as low as $50 on a platform called Flippa. They offer to guide viewers on evaluating business deals to ensure smart investments. The goal is to generate extra income, work independently, or achieve financial freedom through owning an online business. The video promises to cover the essentials of what to look for in a business listing, including type of business, website appearance, target demographic, SEO ranking, traffic, marketing, competition, and financials. A bonus tip on avoiding scams is also teased for the end of the video.
🔍 Evaluating and Analyzing Online Businesses
The speaker dives into the process of evaluating online businesses on Flippa, focusing on filtering criteria such as revenue generation, website and app types, industries, and specific metrics like monthly users, page views, downloads, profit, and price range. They demonstrate how to perform a search on Flippa and provide an example of analyzing a health and beauty affiliate sales company. Key points include assessing the legitimacy of the listing, the business model, website design, target audience, and monetization methods. Financials are scrutinized, including profit fluctuations, expenses, and the potential for passive income. The importance of checking Google Analytics for legitimacy and understanding traffic sources is emphasized.
🤔 In-Depth Analysis and Seller Communication
Continuing the analysis, the speaker examines the financials of a potential business purchase, including revenue sources and the importance of understanding the mix between affiliate sales and ad revenue. They suggest creating a list of questions for the seller, such as the breakdown of income and access to Google Analytics. The video script includes an example of messaging a seller to request more information and a meeting. The speaker also discusses the importance of the seller's feedback and the reason for selling, hinting at the need for due diligence on the seller's history and motivations.
🏡 Exploring High-Quality Online Businesses
The speaker shifts focus to searching for higher-quality online businesses with a minimum monthly profit of $3,000. They find a blog about tiny houses and analyze its performance, traffic, and revenue model. The blog's SEO optimization, content strategy, and use of affiliate links are discussed, along with the potential for passive income. The video script outlines the financial attractiveness of the blog, its low costs, and the possibility of recouping the investment within a year. The importance of verifying the business's numbers and having a rapport with the seller is highlighted, along with a strategy for bidding on the business.
📋 Bonus Checklist for Business Evaluation
In the concluding part of the script, the speaker provides a bonus checklist for evaluating a company's financials when considering an online business purchase. The checklist includes the listing price, average monthly income and expenses, net profit over the last 12 months, additional income sources, and the multiple of net profit that the business is listed for. The speaker emphasizes the importance of verifying the numbers provided by sellers through meetings and analyzing the seller's background and the competition. The goal is to determine the company's worth and decide on a bidding strategy that considers the potential for passive income and the required weekly workload.
Mindmap
Keywords
💡Online Business
💡Profitable
💡Flippa
💡Due Diligence
💡SEO Ranking
💡Affiliate Sales
💡Passive Income
💡Revenue Multiple
💡Google Analytics
💡Selling Reason
Highlights
The speaker discusses buying profitable online businesses for as little as $50 and shares a website that lists various businesses for sale.
Provides a method to evaluate deals to ensure the purchase of the right company for personal financial goals.
Introduces 'Flippa' as a platform for buying already set-up online businesses.
Outlines steps to avoid scams when buying an online business, including checking the legitimacy of the listing.
Details the importance of understanding the type of business, its website, and target demographic.
Advises on checking SEO ranking, website traffic, marketing, competition, and financials of the company.
Mentions a bonus tip on ensuring the company being purchased is not a scam.
Demonstrates how to use Flippa to search for businesses, including filtering by revenue, type, and industry.
Analyzes a specific business listing, 'stethoscope.ninja', discussing its potential and business model.
Suggests improvements for the 'stethoscope.ninja' website, such as updating the template for better SEO.
Discusses the financial aspects of the 'stethoscope.ninja' business, noting its low expenses and potential for passive income.
Recommends using Google Analytics and SimilarWeb for verifying a business's traffic and legitimacy.
Advocates for direct communication with sellers to ask for more information and verify revenue sources.
Stresses the importance of understanding why a seller is looking to sell their business.
Shares a second example of a business, a blog about tiny houses, and its potential for high profit.
Analyzes the blog's traffic and SEO performance, noting the high engagement and organic search traffic.
Provides a bonus checklist for evaluating a company's financials before making a purchase.
Encourages meeting with sellers and verifying the business's numbers through tools like Google Analytics and PayPal.
Concludes with advice on making an informed decision on whether to invest in a business based on potential passive income and low workload.
Transcripts
hey what's up i've been buying
profitable businesses online for as
little as 50 and you can do the same i
will show you a website that lists
different types of businesses and i will
show you how to evaluate each deal to
make sure that you're buying the right
company for you you want to make some
extra income or work on your own terms
or run a business that provides you some
financial freedom you can buy an already
set up online business on a website
called flippa in this video i will show
you what to look out for when buying a
business and then i will walk you
through each step of how i search for
business and how i make the decision if
it's worth the investment let's get
right to it buying your first online
business can be scary yes but to lower
your chances of getting scammed i will
also show you how you can find a
business that you can buy to make
passive income there are multiple ways
that you need to check when buying a
business first you want to understand
what kind of business it is for example
uh what type of store is it how does the
website look like what is the targeted
demographic etc from that you need to
make an estimation of how legitimate
this listing looks check the seo ranking
traffic of the website marketing
competition workloads and lastly
what are the financials of the company
stick around until the end for a bonus
tip of how i make sure that the company
i'm buying is actually not a scam if
you're interested in each of the above
mentioned things that i do when i do my
diligence on each company let me know in
the comments and i will make a separate
video on that too but until then let's
dive right in all right so we want to
open flippa
to look for a company i usually just
click browse and select website all
websites
now you can enter some key terms right
here so i want to filter it by revenue
generating yes definitely yes
website and online businesses but i'm
also interested in amazon stores and
ios apps
the others not so much no
website types i'm open for all websites
so i'm going to leave that blank
industries all industries are good with
me for now and here you here's something
that you need to watch out for you can
type in your monthly users if you're
looking for a website you can type in
monthly page views if you're looking for
again for a website
uh monthly downloads if you're looking
for apps and monthly profit and the
price range so usually i just look for
these two so i definitely want to look
for a profitable company so let's do at
least five dollars per month and then
price range let's start with something
uh 300
look for something cheap i click and
enter
the age uh the multiple this is
something we'll get into in a bit
and uh time left this is for auctions
let's look for sales type auction and
classified so now we did the search and
we already have a company showing right
here uh
superability.it it looks like this
company is about travel but it's in
italy and i don't know too much about
the italian market so i'm gonna skip
that i usually don't look at the
sponsored ads
here we have a stethoscope.ninja this is
in the industry of health and beauty and
it's an affiliate sales company
so they have a net profit of 140 dollars
and they only cost 230 so let's check it
out that looks interesting
all right so it looks like their revenue
fluctuates their page views fluctuates
let's look it out it says no reserve
underperforming 2016 amazon affiliate
sales site so pretty much from this
first view i can see that this company
is likely to
put up links on their websites and then
redirects people to amazon and then gets
the 10
affiliate link from from amazon
um so why is this interesting so june it
looks like they're really tampering off
with their profit so maybe they think
it's not profitable anymore the way they
do it
uh what does a business do they list uh
links kind of just what i just said
this is a wordpress website so it's
probably gonna be easy to
manage because wordsight is fairly
simple
uh with a target audience at med
students and health related
professionals so this is also something
good it's in a niche
that uh probably not too many people
cover already so the competition
so it's easy to check out their
competition and see what they're doing
so the company makes money through
amazon affiliate commissions and the
amazon affiliate relationships
ultrascope
um
what are we selling
all right so this looks already like an
interesting business from the business
model and it looks like a legit website
so next thing i do is i open their
website and see what it looks like
all right we have a general logo
it looks very generic it's not loading
right now it says it's not secure so
that could be improved to
increase the seo so that's a good thing
um they have a bunch of articles here
and it looks very generic this is a good
thing for us because we want to buy this
website right so
we always want to think about how can we
add value to this and in this case i
would completely reuse their content
with a new template or maybe
just change the way the website looks
because right now if i was a med student
i would not want to click on any of
these
but it looks like they have content
right like see here
you can read more on each of these
articles so you can rank on seo or on
google if anyone looks for
what's a personalized stethoscope
and then it links me to this
so if i was a med student i read this
and think okay this is interesting and
now i read the list of the reviews and
then i'm let's say i'm interested in it
i would click on it
and once i click on it i get to to the
website and it looks like i probably get
an affiliate link from this
so this is actually really interesting
uh let's look into next thing i want to
look at is into their financials
so monetization method is ads and
affiliate sales so what i would do next
as i create a list of things that i want
to ask the seller and in this case i
would want to ask the seller like what
is the breakdown of money that you make
is it all from affiliate sales is it all
from ads is it a mixture and if if it's
a mixture is it 50 50 or how does it
look like so here we see that the um
here it looks like the the revenue is
fluctuating so that depends on how they
rank on google probably and how many
people go on their website and use the
affiliate links looks like they barely
have any expenses which is a very good
thing so that means that you can run
this business and make passive income
um
last year's annual profit was a thousand
seven hundred dollars and if we look at
the current bid price or auction price
it's 230 dollars so you would make your
money back in less than a month or two
months
so keep in mind this is also an auction
so this is not the final price but you
could purchase this website for 1799
right now so
uh that's actually a good thing because
if you look at their profit
the yearly profit is 1 700
so you could make your money back in
just a year
next thing you check out google
analytics this symbol here means that
it's linked to the google analytics
which means it's legit
and
you see the number of page views 4 000
page views is actually really good for a
website that only cost
230 dollars
or let's say a thousand seven hundred
dollars if we were to buy it now but uh
keep in mind that this is an auction you
can always bid a certain amount and
potentially get it for much less than
it's listed at
so uh looking here uh coming back
down to the numbers that looks good
pages per sessions is fairly low so you
usually want that to be higher but
that's something you can improve with
website design so if you can just change
the theme of the website you can make
this into a nice looking website and
have an increase the page duration and
the average session duration
it also looks like most of the users
come from organic search which is a
really good thing because you do want
most of the people to just find this by
looking at for an article on
stethoscopes
[Music]
and then most of the users are also
united stage which is which is good for
me because i live in the states and this
is a market that i know
um you can ask for more access by just
messaging them and this this is
something that flippa provides you
in-depth traffic analysis you can buy
the full report but i usually never do
that
so another thing i do is sometimes i
look for
[Music]
similarweb.com
and i look for exactly the company that
we just looked at so i look for
that's not the one
so i want to see if that matches up with
a third party and if they have about the
same amount of traffic so i just type in
the the
the website
and i see that the total visits is about
15 000 bounce rate is fifty percent
uh this might be different than what
they list but that's something to look
into and then pages per visit is also
pretty high so that's actually a good
thing it looks like they're downward
trajectory because their rank side is
going up which is a bad sign
but again this is something that you can
change with your website design all
right let's go back to this so next
thing i would do is
ask a few more questions so
now i identify this is a very
interesting website i'm going to put it
on my watch list i click on watch and i
would probably contact the seller
so now i would say hey this is very
interesting could you share some more
information about the revenues how much
money do you make from affiliates versus
google ads could you share the google
analytics with me please
and how can i verify the revenues would
you be open to
meeting with me on zoom thank you
looking forward to meeting with you best
regards mo
then i will send this out
and wait for a response
looking at the seller it looks like they
have only 50 positive feedback so that
could be one good transaction one bad
transaction but he has already four
transactions totaling uh seventeen
thousand dollars so the question here is
um
does he do this to flip the websites and
make money from the website building the
websites and then flipping them or is it
just because he wants to sell it and
that's actually something that i haven't
gone over
in the previous post but i would always
look for
why he's selling
um
so i usually just do command selling
so why is he selling the website he said
i purchased a few websites over the last
two years to learn and experiment with
growing websites at the time of purchase
in june the site was
producing 250 per month shortly after
google ads
so it looks like the website hasn't been
going too well but that is again a good
thing because it looks like it's been
declining
but if you can add value to the website
you can
change the
search engine optimization or you can
change the design you can put some ads
out there and through that get more
traffic to the website and add value and
by adding value you can increase the
sales either back to 250 dollars per
month or above that
uh so that's actually a good reason it
sounds like he's a legit seller but uh i
would always confirm by having a meeting
with a seller having him walk you
through the business and then deciding
whether or not you want to buy the
business but overall this looks like a
good business
um the only cost that they have is the
hosting
which is only 13 a month so overall if
you decide that that you buy the website
for a couple hundred dollars
you spend 13 per month but it's not
working out after a few months you can
just either sell the website again or
you can just shut it down and all the
costume that you had is 200 300 400
depending on what you pay for it
on top of 13 per month hosting fee
um
yeah overall i think this this would be
an interesting website to analyze more
obviously i would do a more in-depth
analysis on the competitors and
everything but for this example i think
this would be uh good enough all right
let's take another look at how i did my
search and how i found this company all
right so i'm on flippa i click on browse
click on websites let's do all websites
and i want a revenue generating business
but this time
also amazon stores ios apps
and i want to look for
and i want to look for a higher quality
company so this time i'm going to look
for three thousand dollars
monthly profit at least let's say 20.
let's just keep it low for now and i'm
gonna keep the revenue multiple and
everything open and i'm gonna
click search
all right so here we have a red box drop
arts motion they do ads
in ireland not too interested in that
they have a good multiple here but i
haven't bought any companies outside of
the united states i want to stay away
from that for now this company looks
really good they have uh
it's only the the only bid right now is
one thousand five hundred dollars and um
their net profit is four thousand
dollars so that looks really interesting
to me uh also affiliate sale so same as
the previous company here we can see
that it is in line the multiple is in
line with other companies that have sold
there have been some cheaper ones but
that could always be an outlier
um so what they do
here is it's a two-year-old blog um
about tiny houses
what they do let's take a look at their
website
uh all right so this looks like it's a
block it tells you a little bit about
the
block writer
and then it tells you a little bit about
gadgets that you can use for tiny homes
and then i assume that once you click on
them
you get links to products that they use
for their tiny homes here here's an
example
and then when you click on it it has an
affiliate link here we can see
referral codes uh
here's a link referral code which means
that the seller gets at least 10 of the
revenues when you buy this product
through this link
um but going back
overall this looks very interesting it's
very block style so people trust it but
let's see how the revenue and the
traffic looks like
um
we have a performance overview right
here so
they've been getting more and more money
uh throughout 2022 so they've been
getting more and more traffic views
which means that the search engine
optimization is pretty good they have
over 115
seo articles published which is good
and
overall this looks also like a very good
business they barely have any cost they
just have the upkeep of the blog
so this is another company that i would
be interested in uh yes it's a little
bit more expensive uh currently they
list for
a thousand five hundred dollars if you
were to buy it right now it would be 144
000.
but since this is an auction you never
know if you're gonna get it so if i look
at the monthly profit i would say hey
this is four thousand dollars per month
which means that they make over forty
thousand dollars per year
um so this is something very attractive
and this would be worth paying up to
maybe
uh 20 30 even 40 000 because you could
recoup your revenue within just a year
of just buying this business and it's
very passive and write another blog
once per month once per week and add to
those affiliate sales
so overall i think this is a very good
uh company it says that she's an seo
specialist who builds websites
and it looks like she really optimized
it to be seo specialized so let's take
another look at the
at the google analytics it looks like 70
percent of traffic comes from seo or
from organic search which is a very good
thing so you do want that the average
engagement duration is three minutes
which is phenomenal
uh that means that people spend time
reading the article and then once once
they read the article they already have
the some cost of saying hey i've already
spent three minutes searching for this
uh one thing that i was looking for let
me just buy this through the affiliate
link they click on the link
and after that they buy the product
so overall this is another company that
i would put on my watch list
i would contact the seller and ask for
more information about the financials
and about her experience with his blog i
also would look at the reason why she's
selling this company
[Music]
it doesn't look like i can find her
right away on the spot but i would look
for why she's selling the company and
then see how you can add value to this
blog or to this website you always want
to just see where you can add value to
this website by either good articles
that you write about tiny houses or by
optimizing it for search engine
optimization or you can just use this
website as passive income because if you
spend let's say
one thousand dollars but you make four
thousand dollars per month you would
already recoup your money within less
than uh less than a month by far
uh but i assume this website will go for
much more than that so i'm currently
watching it uh after this video i'm
probably going to message the salary
because this looks very interesting to
me all right so there you have it this
is how i do my research on buying a
company online here's a bonus checklist
that i look for when looking at a
company's financials first what is the
listing price of the website what is the
average monthly income expense and net
profit over the last 12 months does the
seller have any way of bringing income
to the business outside of the website
for example through their own personal
branding through network or affiliation
with one or any businesses or companies
that i didn't know about and that's
usually what i look for and i just ask
the seller right i also look for the
multiple like how many months of average
net profit does this company have and
how fast would it take me to recoup my
investment if the company were just to
continue the way it is right now and
after doing all of this i usually look
for what is the company worth to me how
much would i be willing to pay for this
and then i bid something that is maybe
half of that but higher than the highest
bidding price at that moment i usually
contact the seller build up some rapport
and do some analysis and research on the
seller on the website do a deep dive on
the competitors and see if this is a
good fit for me would this make me some
passive income with let's say five hours
of work per week or two hours of work
per week and then i can make a decision
whether or not this is a good investment
but it is very important that you always
verify the numbers can you verify that
the numbers that they give you are real
that's why i always encourage people to
really meet with a supplier have them
screen share their uh seo or their
google analytics as well as uh their
paypal account or wherever they get paid
so that you can be sure that what
they're telling you is actually true all
right there you have it if you're
interested in seeing how you can find a
profitable company for as little as 500
check out this video because i go in
depth on how i do that on a different
website subscribe if you want to learn
more about investing or building your
own companies and let me know what your
thoughts were in the comments but until
then peace out
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