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4. A Data-Driven Look at Every Flipped Business on Our Marketplace

A Data-Driven Look at Every Flipped Business on Our Marketplace

Ever get a little jealous of all the people online claiming to reap ridiculous dividends from flipping websites?

A logical part of you might shut down any belief of their humblebrags of three- and four-figure returns on investment (ROIs). You might reason that the statistics are not in your favor and that only those who can make flipping work shout the loudest about it.

A curious part of you might be holding on to hope though, begging, “How?!” in the secret part of your mind.

We’re here to answer to your logical and hopeful sides with an in-depth data study on flipping businesses. We went through hundreds of deals to bring you insight on all of the recorded flips on our marketplace, so you can make your own informed decisions on if you believe in the power of online business flipping.

For our lovers of a good flip, our Flipper Freds, this is the data-study you’ve been waiting for. We think you’re going to flip out over this one. Or that you’ll think this data-study is flipping cool.

We’ll leave the bad puns there. Now it’s time for some serious data.

What is Flipping?

Before we get carried away with the numbers, we have to introduce flipping to those of you who are new to the concept.

Flipping businesses is a natural extension of buying and selling online assets. It’s rooted in the ancient business concept of buying low and selling high.

To buy low in this context, a buyer has to have a good eye for opportunity and the skill set to optimize a purchased business. The ability to sell high doesn’t appear out of thin air either; the business has to go through strategic improvements that increase income and overall performance. That might mean adding complimentary monetizations, conversion rate optimization, adding an email list, or cleaning up a backlink profile.

This alchemy of upgrades allows the buyer (the business flipper in this context) to return to our marketplace with a much more valuable business. The made-over business can demand a higher premium and allow the flipper to reap a great ROI.

This is what flipping is in the simplest of terms. Flipping online businesses is a hobby for some and a full-blown enterprise for others, folks we’ve named Flipper Freds. We see plenty of Flipper Freds in our deals because ROI can be so quick and so high for online assets. This, of course, drives up demand and competition for flippable assets.

We will dig into what asset flippers are flipping and what kind of ROI they’re realizing as we move on. For now, let’s focus on our marketplace and the flips we found there.

Flipping On Our Marketplace

After combing through the data, we found 41 recorded flips.

These flips span monetizations and niches but our most commonly flipped monetizations were Amazon Associates and Adsense. In total, 18 businesses were monetized via Amazon Associates or some mix with Amazon affiliates. Adsense came in a close second with 16 total businesses relying on Adsense or a mix of Adsense and other income monetizations.

It looks like monetized content is king when it comes to strategically flipping businesses for positive ROI.

Here’s the numeric breakdown of our flip monetizations:

From here, we calculated some averages to see what a flipper might expect from their flipping prospects. We started with the average prices businesses were bought for and sold for. Those two provided the average profit made from a flip and overall average ROI before our commission. The averages shake out like this:

• Average Purchase Price:
  • $52,974.05
• Average Sold Price:
  • $65,522.93
• Average Profit:
  • $12,548.89
• Average ROI:
  • 24%

Bear in mind that these numbers are straight averages, attempts to give a reassuring and accurate middle ground prediction. You might be scratching your head over them, thinking flipping should yield higher results. For most of our flippers, it does. Overwhelming results have shown flipping led to a positive ROI, as you can see from the breakdown here:

• Sellers who doubled their ROI – 15 businesses had over 100% ROI
• Sellers who had a positive ROI – 18 businesses had a positive ROI between 2% – 97%
• Sellers who had a negative ROI – 8 business had a negative ROI between -10% – -79%

With the large majority of flipped businesses producing such a high ROI, the ROI data alone would skew towards a 114% ROI average, much higher than our average of 24% ROI given the other data (buying and selling prices, profits).

When you look at that number, remember that’s a 24% ROI when you go to sell. You’re still making money from the business while owning it, receiving that extra ROI from a sale lump sum in a much shorter timeframe than an average investment in real estate or stocks.

Speaking of time, the average flip period came out to about 407 days.

We marked a flip period from the date the business was first acquired to the date it was sold. You could look at that number of days a bit differently if you want to think about when the business was submitted to the marketplace to be flipped, but because the flip means nothing until the deal is done and money is in the bank, we went with the final sale date.

Looking over the data caused some interesting stories to emerge.

We found three double flips in the data where businesses were bought and sold on our marketplace twice. A double flip will have four different listing numbers attached to its journey and passes between two flippers at one point. Double flips allow you to view the approach of two different flippers and see what choices they made to optimize a business for greater profit.

With all this data, are you curious now?

Data is one thing, but the juicer insight is knowing how these flippers reaped such positive ROI. It was tough to narrow down favorites, but we handpicked a few that demonstrated the mindset and journey of a flipper and their business. Here are those inspiring flips.

#1 Profitable Flip – 1,164% ROI

You read that right. Someone made 1,164% ROI on a single flipped business. It would sound way too good to be true if we didn’t have the numbers to put right in front of you. This flip was a lucky mix of the right business and perfect timing. It offers good insights to walk away with, so let’s get into some solid takeaways.

Business Breakdown

Pre-flip Monetization: Adsense, Affiliate
Post-flip Monetization: Amazon Associates, Adsense
Niche: Health and Fitness
Purchase Price: $3,164.40
Selling Price: $40,000.00
Flip Period: 303 Days
ROI: 1,164%

The Backstory

This one is an older deal that was first acquired in August 2015 for $3,164.40.

It was a small Adsense and Affiliate business geared towards women that focused on fitness and health for a certain area of the body while also reviewing products that could help women achieve the figure they desired.

It was only bringing in $100-$200 a month. It had a Moz Domain Authority of 17 and MozRank of 4.24. There were no social media accounts. No PBNs and no strong backlinking. Long story short—the business was tiny.

Content hadn’t been added to the business during the two months prior to the business hitting our marketplace for sale. This was the lowest hanging fruit for boosting the business; the new buyer could add new content on a more regular basis and see improvements. Adding social media and conducting some keyword research would also help the site grow.

All of these available easy wins set the stage for the right flipper to come through and expand the tiny business.

The Flip Begins

Sure enough, a flipper scooped up this business for a deal.

The flip started with high-level improvements. The flipper improved the page structure and articles over time, added content monthly, and created some social media accounts. Over time, 926 opt-in emails were acquired. Amazon Associates was the most important strategic add to the business, using Amazon for affiliate income to generate well over $1K a month in earnings.

Most traffic came from organic search (66.83%) and direct search(32.80%). With the improvements and changes made to the business, the Moz Domain Authority rose to a ranking of 21. This wasn’t a massive jump from its previous ranking, which was a bit of a mystery given how well the site had been doing with increased traffic and income.

Profiting from the Flip

This all came to light when the flipper went to resubmit the improved business to the marketplace.

When asked about how pageviews had increased, he responded, “I believe that the improvement of ranking over time has helped a lot with the page views. It honestly has done far far better than I ever expected after initially buying it from EF. For some reason, I’ve definitely gotten on Google’s good side with the site even though I don’t know all the factors that contributed to it.”

What the flipper wasn’t seeing was that he had unknowingly entered the traffic lottery and his hyper-specific niche was the winning ticket.

In the year he took to flip the business, his targeted information and reviews were on a subject that was becoming the trend in health and fitness, not to mention a widespread cultural phenomenon. The sub-niche saw a meteoric rise in the years following, handing the business a massive traffic (and income) increase.

So the flipper had luck alongside doing the right thing by improving the site. He had been maintaining the business with minimal time, holding onto the business for about nine months before realizing it was time to sell.

The trending niche and small improvements yielded a $40,000 lump sum, a 1,164% return on the initial investment.

If you take away anything from this flip, it’s to pay attention to what is trending. This can be so important in the affiliate world because watching trends and getting in at the right time can do all the work for your business’s profits.

#2 Profitable Flip – An SEO earns 429% ROI

It pays to know what you’re doing. In this case, it paid to the tune of $181,626.34 profit. This is how one SEO expert capitalized on trends and his skill set to reap 429% ROI.

Business Breakdown

Monetization: Amazon Associates, Affiliate
Niche: Food & Beverage
Purchase Price: $42,373.66
Selling Price: $224,000.00
Flip Period: 410 Days
ROI: 429%

The Backstory

It took a trained eye to spot the tremendous potential and optimization opportunities here.

The business was well aged at over four years old in a niche on a strong upward trend. The initial seller liked the domain and bought it from someone using it as a personal blog before building the business from the ground up.

It earned from Amazon Associates and four other affiliates promoting products around home beverage brewing and the seller spent little time maintaining the site. In terms of its page structure, the business’s top three pages accounted for 41% of traffic, so it had room to add new and better performing content.

For the business’s link structure, the seller wrote this in their vetting ticket: “Between 2014 and 2016, a small amount of PBNs were used (10-15). I never got aggressive with this because the website never really needed help ranking, as it has thousands of natural links from hundreds of niche-related domains. 3/4 of these PBNs have been removed over the course of the last three years. Only a small handful remain active (4-6 in total). There were no link building services used on this site.”

When asked about the PBNs, the seller said they would not be included in the sale and it would be “up to the buyer’s discretion whether they want to leave the links in place or take them down. If they want them, they will stay in perpetuity.”

A skilled SEO could see this and know exactly what to do. This became the starting point for the flipper to improve the site.

The Flip Begins

The business went through a radical makeover.

This SEO cleared out all PBN links and instituted a white-hat link structure. Over time, the business had a Majestic Trust Flow score of 18 and an Ahrefs DR score of 30. Traffic was streamlined to be 99% organic.

Again, trends were on the flipper’s side. This time around though, the flipper knew exactly what trend they were capitalizing on. Their SEO skills allowed US audience targeting, where the niche was on fire, and concentrated 98% of traffic from a US audience. Paired with the power of the niche, this led to six months of the year reaping 287.33% profit compared to the year prior.

Social media was sizable with 25,476 followers spread across six social media profiles. The flipper admitted they had a huge following but hadn’t yet figured out how to leverage it. They had just hired a team member to handle social because they knew it had huge potential in the niche.

Instead of spending too much time on social media, this SEO-minded flipper knew where to focus and turned energy towards what would make more money in the flip.

Profiting from the Flip

The flipper added where it counted—affiliate numbers. The flipped business jumped from 4 to 10 affiliates when the business hit the marketplace. The natural result was a jump in income.

The flipper recognized where complementary growth opportunities were and worked to capture them, crafting a strong sitemap and content silos. A new content silo was added in a related vertical so that the business could expand into multiple beverages. Better email funnels were created and the flipper installed an automated follow-up sequence with Aweber that eventually offered readers a monthly club deal and a lead magnet to follow.

To do all this, the flipper only spent a half-hour on the business a week and had a staff member adding content and links. They put plenty of optimizations in place and the business had skyrocketed since purchase.

The business was in a great place. Any buyer would be enticed by all the processes and improvements put in place, but the flipper took it one step further. They made it clear to potential buyers how much growth potential was in easy reach, laying out the details for buyers on how the business could make more money. They shared which keywords the business could benefit from, which content opportunities had low competition, additional Amazon affiliate offers, and even how to add Amazon FBA to the existing business. The flipper sketched out the roadmap for expansion and offered it to interested buyers.

This is how a whopping 429% ROI was generated in a mere 410 days. This flipper’s approach to optimizing, systematizing, and solidifying growth potential in the business ensured they walked away with a solid flip.

#3 Profitable Flip – 147% ROI in 199 Days

This flip stood out as one of the fastest flips with the highest ROI. If you want to know how to more than double profits in just over six months, read on.

Business Breakdown

Monetization: Amazon Associates
Niche: Technology
Purchase Price: $74,800.00
Selling Price: $185,000.00
Flip Period: 199 Days
ROI: 147%

The Backstory

The business was bought for $74,800. It provided reviews and buying guidelines in a lucrative technology niche. It overcame stiff competition in the niche by targeting low to medium competition keywords that were easy to rank for. All income was earned through Amazon Associates commissions.

Content was created by the seller and, at times, the seller’s spouse. The seller loved writing articles and 90% of their time was spent creating content for the business.

The business did use PBN links when the seller was going after a targeted keyword. About 12 links were purchased and monitored for related content. The business was in good standing with rankings and was hitting the bottom of page one on Google for several categories where the seller could earn high commissions. The seller knew that a buyer could take what had been started and create the necessary content to improve rankings.

That’s the exact opportunity the flipper saw. The flipper acquired the business in July 2018 and started racing to flip the site.

The Flip Begins

This flipper was all about conversion rate optimization (CRO) and took a deep dive into optimizing the site.

To start, they focused on creating outstanding content to match search intent. Content was published on a monthly basis with the help of an in-house team. All the articles were thoroughly researched and written by people from within the industry. When the business was being prepped for sale again, the flipper had 32 drafted articles totaling 70,000 words to incentivize prospective buyers.

The flipper also went in and disavowed all PBN links, making everything white-hat. From there, a link-building campaign was started to help the site. When purchased, the business had three social media channels: Facebook, Twitter, and Google Plus. The flipper got rid of Twitter and Google Plus, but hung on to the deactivated Facebook account to pass along in the sale.

The flipper kept an active role in the site’s updates because it was their first purchase with us and they wanted to protect the investment. The work put into the business caused earnings to explode, a rapid transformation from the site purchased originally.

Profiting from the Flip

The flipper wrote in their vetting ticket that “The new owner doesn’t really need to do anything because they’ll get 32 articles that are ready to go (can cover 12 months of a solid content calendar). There’s no need to do any link building because I’ve done a lot and am still waiting to see the results. The new owner will definitely receive all the benefits of my previous work.”

Interested buyers were impressed with the work that went into the business and the incredible growth it achieved over such a short time period. One buyer was so drawn by the flipper’s abilities that they asked to use the flipper’s team and consultancy services to help grow the business in the following year. For that support, a solid offer of $185,000, all cash up front, was made.

It took only 12 days on the marketplace for the deal to close and the flipper to walk away with an extra $110,200 on top of six months of ownership earnings.

It was a flipper’s dream come true.

#4 Profitable Flip – The Largest Double Flip

Double flips are a bit like a relay with each buyer and seller acting as a runner and the business being the baton. Here is a classic four-leg relay with a double flip, meaning each pass of the business shows us a little bit more about running a good race (and a profitable business). Let’s see who ran the best leg of this 256% ROI victory.

Business Breakdown

Monetization: Adsense, Advertising, Affiliate & Advertising, Amazon Associates
Niche: Culinary

Flip 1:
Purchase Price: $6,500.00
Selling Price: $19,709.00
First Flip Period: 508 Days
First Flip ROI: 203%

Flip 2:
Purchase Price:$19,709.00
Selling Price: $30,073.23
Second Flip Period: 495 Days
Second Flip ROI: 53%

Total Double Flip Period – 1003 Days
Total Double Flip ROI: 256%

The Backstory

The first flip started when a husband and wife team bought this Adsense, Advertising, and Affiliate business at an unexpected discount.

The recipe and lifestyle-focused website was well established. It generated solid traffic from Pinterest, and had been featured on sites like The Huffington Post and Better Homes & Gardens. It earned through three different affiliates, a personalized ad agency, and Adsense.

All had gone well in the deal and the couple was ready to take over the business. Then it came out in migration that a major affiliate (which had provided half the income for the site) couldn’t guarantee the new owners the same kind of offers or revenue. This was due to most of the offers being wrapped up in a personal relationship with a sales representative of the affiliate site. This put the future earnings of the business into question and though the couple really wanted to buy, they couldn’t risk their investment. They felt it was best to pull out of the deal and pursue other businesses.

The original seller didn’t have time to maintain the business and wanted it off their hands. They offered the flipper couple a major discount—half off the original list price since half of the established affiliate revenue couldn’t be guaranteed.

The flipping couple made the right move and accepted the offer. It was on them to figure out how to generate new income should the major affiliate fall through. With their investment into the business cut in half, it was worth the risk and work.

With more to gain than to lose, the first flip took off.

The First Flip Begins

These flippers started by doing what most flippers do after purchasing a business and added revenue streams to the site. They expanded to four advertising sources and added in Amazon Associates.

The business was still generating the lion’s share of its traffic from Pinterest while benefiting from organic referrals out of other recipe sites. The flippers did manage to boost other forms of traffic to reduce dependency on Pinterest. Thanks to tools like Tailwind, the couple spent up to two hours on the business a week and scheduled posts grew their Pinterest following from 1,500 to 8,000. Older posts were updated and optimized for keyword search but the flippers admitted in the vetting ticket that there was still room for improvement.

The couple were first-time online business owners and happy with what they had achieved. They acknowledged at the time of sale there was plenty of room to grow. There were plenty of campaigns they weren’t running, sponsored content to write, even an email list of 1,060 they hadn’t utilized: all available options to grow the business.

It seemed like the couple was comfortable with where the business was and enjoying the kinds of projects it brought into their lives. At the time of selling, they were writing a sponsored article that came along with another tasty perk—free bacon. Getting paid to write about and eat bacon was good enough for them and it was time to pass the business off to someone else who could do more.

This is where the second flipper took the baton for their sprint.

The Second Flip Takes Off

In 2017, the second flipper took over the business and methodically improved the business for 495 days.

While the first flippers optimized the business with a good diversification of ad revenue, this flipper knew they could do better. They sought out one main network, Adthrive, for a higher return rate and simplified ad revenue.

They also focused on boosting Amazon affiliate revenue. When they first purchased the business, Amazon Associates was responsible for a minimal share of affiliate income. Seeing an easy win for revenue boost, the second flipper added new kitchen product articles related to Amazon Affiliates every week or two.

Pinterest was still crucial to the business, so the second flipper created new pins for some of the older recipes on a weekly basis to try and develop new traffic. They still used Tailwind for scheduling pins and ensured that it was running well. They spent three to four hours a week on the business, thanks to the help of two outsourced writers who helped with product reviews and recipe updates.

However, the email list was an open opportunity for growth that the second flipper couldn’t quite take advantage of. In the vetting ticket, they said, “I have experimented with lead magnets and emails generated through giveaways. I retained a small amount of the emails from those experiments and I set up initial sales funnels, but I never had enough time to fully develop the sales funnel and it never generated any income.”

The flipper had a day job and couldn’t quite devote the time needed to increase earnings further. Yet, all of the work and optimization they put in was not in vain. The flipper benefited from the strong domain ranking of the site and its solid presence on Pinterest. With the focus on Amazon Associates, they were able to recoup their investment and some.

Profiting the Entire Way Through a Double Flip

By the time the business went for its second flip, it had shape-shifted from a multi-affiliate, advertising, and Adsense business into a streamlined Adthrive and Amazon Associates business. Its monetizations changed along the way but it benefited from being a well-established recipe site with a growing following.

The first flippers benefitted from getting the business at a discount but still managed to exceed the first valuation of the business. The work they put into the business gave them a 203% ROI when they went to flip the business on our marketplace.

The second flip was a success as well, realizing a 53% ROI and leaving room for subsequent buyers to take the business to the next level. This business would be perfect for a third flip, since it has proven itself twice over and remains ready for optimization. If it does go for a third round, we’ll look forward to seeing the changes.

In the meantime, this flip showed that a multi-flip is not only possible, but can be valuable for business performance and earning potential. If a business improves in the hands of each flipper, there’s no reason why a profitable flipping race can’t continue.

Valuable Lessons From Flipping Data

There’s so much to take away from this data if you want to get into the business of flipping.

As you’ve read, capitalizing on trends in content-based businesses can be a game-changer for your income. It takes a mix of strategy and luck, but finding the right trend can be done. The beauty of flipping based on trends is you don’t have to worry about the long-term trend stability because you have an immediate exit goal in mind. You can then focus on improving the business in the short-term and let trends carry your business for you.

It’s also worth noting that these flippers played to their skill sets. From experts to newbies, each flipper did what they were good at, what they knew to be a responsible move for the business in order to keep their investment safe. If you’re flipping, it’s obvious to use your special expertise to boost the business but it’s also a good idea not to venture into territory you can’t navigate. Each of these highlighted flips did just that and was able to reap dividends from it.

An unexpected benefit for these flippers was being able to come back to the same marketplace. By doing so, they weren’t responsible for tracking down important business data from prior owners as we had all business histories already in place. This helped increase the salability of the business, allowing buyers to see year-on-year data without interruption. Not to mention that coming back to us meant these sellers were used to our deal process and comfortable with it. Arriving at the deal table as an expert gives you negotiation strength and the ability to walk away with more profit.

If you’re reading all this and are ready to start your flipping journey, we can’t wait to help.

Our business analysts can help you sort out your buying criteria so that you can spot the right flippable asset when you see it. If you have a business that you know is ready for flipping, we can also help you plan your exit strategy.

Happy Flipping!