The Flippa Business Model: How To Create a $20k/month Revenue Stream [Case Study]

David Z  

Have you ever wanted to buy an existing website or business and turn it into a profit-producing gold mine? With Flippa, you can.

Flippa is a marketplace that allows you to purchase and run existing, proven businesses instead of taking the time to develop on your own.

Building a small business is one of the riskiest things you can do with your money. 8 out of 10 small businesses fail and get shut down within the first 18 months.

But, have you ever wanted to skip all those hard hours spent bootstrapping a company and jump right into the growth period?

With sites like Flippa, you can. You can purchase a company that’s already finding proven success, and that’s exactly what Riad Bekhit did with his potato business.

He purchased a company that delivers potatoes to people with customized messages on the potato and is consistently generating over $20,000 per month in sales.

In this article, we’ll review what Flippa is, how Riad converted his site to generate $20,000 per month, and how you can do it too.

What is Flippa?

Flippa is a marketplace designed for entrepreneurs looking to buy and sell businesses online.

Flippa

It’s a site that helps entrepreneurs to find their next big venture, or cash in on their current success.

And it’s a big hit:

There are currently over 5,000 new businesses and websites listed for sale on Flippa every single day.

Every month there is $5,000,000 worth of businesses sold!

They have 178,639 registered users and have sold 12,000+ businesses on their platform in the last year.

Flippa users in 2022

It’s safe to say that people love and trust the site when looking to buy or sell businesses.

You can sell and buy businesses in the following categories:

Flippa Category

You can buy current websites that are running, domains that you want for your next venture, apps that are finding huge success, or Shopify stores that you’re interested in.

And there are currently millions of open listings for you to browse:

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Flippa has tons of options to filter the millions of results on their page.

For example, if you do a general search for an application that you want to buy, you can sort those results by niche/industry, app age, monthly profit, and current price range:

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And if you search by Shopify stores, you can narrow your site results by more diverse filters:

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It works similar to eBay in that you have to either make a bid on the site’s current price or if they give you the option, you can buy it immediately.

With all of the filtering options, you have the ability to find businesses that you either want to grow or simply take over.

You can find brand-new businesses, domains, or stores. Or, you can take over an existing business that is finding great success.

The site is extremely trustworthy, and the numbers are always verified with Flippa, meaning that the revenue per month numbers are all true.

Now that you’ve got a basic idea on what Flippa is, let’s dive into how Riad converted a site on Flippa into a money-making machine.

How Potato Parcel’s Got Started with Flippa

Potato Parcel website

Riad had been an ecommerce entrepreneur for years. Running multiple side businesses and always on the lookout for his next venture.

He was currently running multiple websites and small businesses but wanted something fun to take on.

He wanted another ecommerce opportunity to take under his belt.

As a growing ecommerce entrepreneur, he constantly listened to podcasts to learn about growing his businesses.

On a podcast, he came across the site of Flippa where you can buy and sell businesses.

He saw this as his opportunity to find something fun and potentially viral that he could buy and scale.

He immediately found Potato Parcel, which he engaged in a bidding war for.

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He did hours upon hours of research into how well it was performing.

He noticed quickly that it was such a unique business with almost zero competition. There was nothing like it yet.

He ended up buying the company after doing diligent research.

On the businesses website listing on Flippa, he noticed that the seller was claiming great numbers to the site, but had no time to run it:

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He then arranged a Skype meeting with the seller to make sure that all of these numbers were real.

He scoured the seller’s Google Analytics and Weebly data to make sure that he wasn’t getting scammed or tricked into buying a failing site.

He also did organic SEO research on the site to see how much traffic their inbound efforts were currently driving.

In the end, he came to an agreement with the seller and purchased the site for 5 figures.

Within 10 days he became the official, legal owner of the business.

Since it was so unique, he got tons of guidance from the seller for a few months as a contract term in their agreement to make sure the business ran smoothly.

One of the first steps he took was converting the site from Weebly to Shopify to take advantage of the robust options on Shopify’s platform.

For example, on the old site, when someone went to purchase, there was no field to enter the text to go on the potato.

So he switched to Shopify and could then add that messaging system.

Potato Parcel order

Now, his business does over $20,000 a month on average and it’s growing every month.

He’s produced a 7x return on investment on his sales so far, and the company continues to grow.

Riad runs Facebook advertising campaigns that are hyper-targeted to people who would love his product.

He uses remarketing ads and Facebook’s “interests and exclusions” to narrow his audience down to those who are primed to buy.

And thankfully, his process is replicable.

Here’s how you can buy and grow a business using Flippa to produce over $20,000 per month in revenue.

How To Get Started on Flippa

Now that we know how Riad was able to take a small venture on Flippa and turn it into a profitable small business, let’s dive right into how we can replicate it.

Step 1. Evaluating sites on Flippa

Riad noted that evaluating the businesses on Flippa for legitimacy was one of the most important steps he could take.

Flippa is a great, trusted site, but that doesn’t mean that a few scammers won’t slip through the cracks.

To get started evaluating sites, head to Flippa and start a search for well-performing businesses.

If you’re not sure about what types of niche businesses you are interested in buying, you can simply sort all results by their performance to get some ideas:

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Filter your results by important elements like monthly profit, page views, and the website and vertical types.

This way you can sort out the businesses that aren’t profitable and find the hidden gems:

Flippa Search Result

Narrowing your results is a key step in weeding out the sites that will be a waste of time and money.

Riad then recommends you to analyze each profile in depth.

Start by clicking on the business profile that intrigues you, and read about their success:

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Make sure to analyze their traffic sources to see what mediums are driving traffic for them.

If it’s only PPC, you should steer clear, as they have almost no organic traffic and it will take you tons of time to start driving that SEO-based traffic.

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And while businesses might sound appealing by saying, “$50,000 per month in revenue”, Riad recommends to always check their last 12 months of revenue to look for trends, like this:

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The initial headline and offer might sound compelling on the surface:

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You always need to check the data to notice trends, like a downward trend in revenue and lacking an organic presence to build your company without advertising.

Remember: before buying, always schedule multiple skype meetings with the seller to have them confirm their data with you by showing you their Analytics and accounting software data live.

You should never buy a business on Flippa without confirming their data first.

Step 2. Get promotion with outreach

Riad notes that one of the biggest ways he was able to grow his business after making the purchase on Flippa was by doing outreach.

His main focus was getting tons of publicity in the form of backlinks and interviews to drive more organic traffic and sales.

To get started conducting outreach and driving more relevant traffic to your business, you need to prospect.

If you sell products in a niche industry, it’s really easy to find target sites and contacts.

For example, let’s say you are selling cookware, you can easily target recipe blogs and food bloggers.

First, head to google and search for roundup posts:

Google search

This will help you find already curated lists of the best bloggers in your industry to perform outreach to.

Simply replace “food” in the search above with your own industry keywords.

These lists save you the time and hassle of gathering outreach targets by compiling the best in your industry:

outreach targets

Simply add these to a spreadsheet to keep track of them.

If you click on each site, you can prospect for their emails by going to their about us section and looking at who runs the page:

about us section of a blog

Then, head over to a tool like Voila Norbert to prospect for their email. Simply type in their name and the website to pull up their email address:

 

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