BEGINNER GUIDE: Make Your Buy a Positive Flippa Legit Experience
Is Flippa Legit? Is Flippa Safe?
This guide covers the most common red flags (red flags such as fake revenue screenshots, fake P and L lists, and other tactics) and what a legit (and not legit) listing looks like.
NEW to Flippa but feeling unsure? START HERE. You’re in the right place!
Need the BASICS of Listings, Buying and Selling? Make sure you check out The HOW TO GUIDE for Buying a Business on Flippa and learn more about HOW TO Track Successful Business Trends Using Flippa.
More EXPERIENCED with Flippa but want some new tips? Get my 2-Minute Trick for Buying Flippa Sites on the Cheap and the Real-World Review of Escrow.com.
What’s the Deal with Flippa?
The biggest catch is that Flippa does NOT generally vet or deeply analyze the small-fish businesses it lists, unlike other Flippa alternative sites like Empire Flippers or Odys Global (a site which sells aged and expired domains). I say generally, because Flippa does offer a vetting service by an in-house verifications team here for its larger, verified listings. Because other companies provide a more robust built-in business analysis at the fore, they don’t carry beginner or smaller starter sites like Flippa does.
It DOES provide high-level analysis like SemRush Authority Score, Referring Domains and Backlinks counts. SemRush’s Total Keywords is also listed. To dive deeper, you need to buy a report. Some of the metrics partners Flippa partners with are: Shopify, Stripe, WooCommerce, Quickbooks Online, Google Analytics, Admob, Adsense and SEMRush. For $1–2K you can get a Due Diligence Report from Flippa and level the playing field somewhat.
A Democratic Approach: Maybe too much?
Flippa has a WIDE range of sites listed because they basically take everyone. (Of course, for $1-2K you can get a Due Diligence Report from Flippa and level the playing field somewhat). So, be patient while going through the listings to find the right businesses to buy. There is fluff here, but to be fair, you need to do your due diligence anytime you are doing a buy, and you need to sift through listings anywhere you go, even offline.
Still skeptical? See how Flippa makes its money here.
Are There Holes in the Business Model?
It’s true that there are holes in the way the Flippa business model runs its business sales listings pages that leave room for Flippa scams and scammers to slip through (see below), but at the same time, to be fair, Flippa is doing some very important things right, like Flippa Finder, for instance.
#1 Defense: Talk Business with a Real, Live Person
The first thing I would HIGHLY recommend, especially BEFORE you make your first BUY, is Flippa Finder: a service for Buyers on the Flippa platform for buying and selling businesses where you can chat for FREE for 30 minutes with a real, live staff person about general business questions you may have about the platform.
You can go over the basics of listings you are interested in, how to buy or sell, and discuss your overall goals in buying an online business or app, and other similar questions. You can even book more followup sessions, if needed. There is no upper limit on the sessions, at least not advertised as such.
Track Real-Life Business Trends using Flippa
You can use your Flippa Finder session to be a “second pair of eyes” on a potential buy, to help you stay on track and not be taken in by or charmed by a listing that isn’t legit. You definitely want to avoid getting involved in a Flippa dispute or Flippa scams.
How Else Can Flippa Finder Help You?
Flippa listings use visual emblems to represent things like Google Analytics, Intuit Quickbooks or AdSense statistics, so you want to be aware of what these emblems look like, and if you are not sure what is really going on visually in a listing, you should book a Flippa Finder session. Note however it is not an advice-giving session and you will not be getting business recommendations or suggestions that relate specifically to you, but rather good, clear actionable best practices for buying an online business.
#2 Defense: Check the Trust Pilot Reviews
You can check the Trust Pilot reviews for Flippa to get an understanding of the experiences other users have had using Flippa. Remember that the important thing to note here is that Flippa does not vet the businesses it lists as mentioned before. Each transaction is a unique experience with several moving parts: the buyer, the seller, the price and agreement, the industry sector, and the type and financial health of the website being exchanged.
You can also do your own background research on Flippa as a company, by starting with their LinkedIn company profile. You can look into their funding positions, number of employees, and with LinkedIn Premium, you can see even more business insights and trends.
#3 Defense: Do the (Easy) Math
Sometimes the best way to stay on track is to keep it simple. One example is the reminder to use the basic back-of-the-envelope multiplier formula (that sellers often use for setting their reserve pricing) to evaluate a business. If the multiplier is a lot higher, it could be a red flag.
PROFIT x 12 x 2 = PRICE
#4 Defense: Time on the Site
Take some time! Get to know the site, the kinds of listings they show, and how other bidders act. Spend some time (like at least weeks, maybe a month or two) really watching listings you like, and even following the ones that you aren’t sure about.
LEGIT: What Does a Flippa Legit Listing Look Like?
It’s probably useful to go over what a Flippa Legit listing will have (most if not all of these):
- Verified Google Analytics (note the GA emblem and other emblems)
- Excel spreadsheets, not screenshots (exception is screenshots clearly confirm verified data)
- Revenue History is up-to date (within a month or so)
- Truly Organic Traffic (if Paid Traffic, clearly states it)
- Verified Seller with reviews, if possible
- Bounce Rate must fit the type of website (can be higher for content sites)
- Why the Seller is selling is stated clearly and openly
- Seller is concerned with reputation and sells other quality sites
- Keywords that relate to the business, Google ranks the site for those keywords
- Original content
- Post-sale Support
EXAMPLE: The GOLD STANDARD for FLIPPA (Be sure to check the emblems!)
This is an example of the emblems from a site listed for $100,000. What do they all mean? It has been verified by the Flippa Vetting Team or Broker and accuracy of all the financial functional and operational performance data is guaranteed. Intuit QuickBooks has also been verified and is displayed for 12 months (a good amount of data to look over), and Google Analytics data have been directly imported to Flippa with no intervention on the part of the Seller.
SCAM: DON’T GET BURNED! What Does a Flippa Scam Listing Look Like?
A Flippa Scam (or Poorly Made Listing) is essentially the reverse of the Flippa Legit above. Flippa scams often have these characteristics:
- Google Analytics, Adsense or Quickbooks is not verified
- Over reliance on screenshots, which seem dummied
- Revenue History is from previous years
- Paid Traffic is not declared
- Seller is not verified and not easily found online anywhere
- Seller has multiple low-quality sites listed with copied content
- Bounce Rate must make sense for the type of website
- Why the Seller is selling is left out or obviously boilerplate text
- Text that has not been edited to make any kind of sense (not the same as simple English as a second language issues), text that refers to other sites
- Keywords that are unrelated to the business, clearly have been bought and Google does not rank the site for those keyword
- Automated content (here is a “Is Flippa Legit Reddit” convo)
- No Post-sale Support, seller is clearly “out of there” right after sale
- High pressure sales tactics, appealing to greed, unsubstantiated future income predictions
SELLER TACTICS: The Most Common Glitches
#1 Seller Tactic: The Re-List
By far, the most common (and egregious) scam that I see is a listing that does not sell and then is re-listed for more money. IF it didn’t sell the first time, given ample time and a clear description and metrics, why would it sell for MORE now? It would sell to an unsuspecting Buyer who doesn’t know its history. So, how do you protect yourself against this kind of thing? It’s HARD! Flippa does not track for you how often a listing has been offered. My best advice is to take the time to follow some listings. Also, watch for this message after a listing hasn’t sold:
CAVEAT: IT is not illegal to relist a business or site offering. But is it ethical to continually jack up prices?Of course, IF you are fine with the new, re-listed, higher price–and don’t know and don’t care that it is higher and has been relisted, then go for it.
TRY THIS: TRACK a listing or two (not an auction, but a timed sale) and if it doesn’t sell, see what happens next. Does it get re-listed? Does it sell at the last minute? Does the Seller remove the listing before it sits unbought?
#2 Seller Tactic: TONS of DATA
The TONS of DATA–but none of them verified–is a common glitch in the buying process. Look out! MORE is not better, if quality and verification is lacking. (Heck, I can make an Excel spreadsheet look great any day.) How should you root these out? REQUEST a video walkthrough of any P and L statement pages and Profit Calculations sheets, and also ask for Access to Google Analytics (an easy thing to ask for, and very accepted).
#3 Seller Tactic: THE DUMP
Some listings are clearly a DUMP of unsuccessful business attempts. You can spot these through a fairly quick assessment of the listing itself and the Seller. Lots of cheap sites with variations on a domain name with “crypto” in it, all under the same Seller umbrella are a good example of dumping. For real: you can think up your own domain names or get free help generating good ones.
Cheap sites with variations on a domain name all under the same Seller umbrella are a good example of dumping.
What are the Seller’s reviews like? Anything less than 100% Positive Feedback is a chance you might not want to take (you can always read through and see if the issues with the Seller are being repeated and are clearly a problem–but this takes your valuable time).
The descriptions and text for these “dump sites” are usually thrown together and clearly boilerplate. Often, for WordPress websites, the Seller will list all the features that already come FREE with WordPress or a specific WordPress plugin.
EXAMPLE: Listing “Database” under Sale Includes–when a SQL database is REQUIRED for WordPress and is part of the setup.
#4: UP and to the RIGHT (or the Moon)
Who doesn’t want a business that is growing, with a healthy profit chart with lines UP and to the RIGHT? But you have to wonder why the Seller is so eager to sell a clearly booming business. More often and more realistically, a business that is being sold has languished for a while, and the sales or social media boosts are slowing down. IF the data is not verified, don’t bother if it looks too good to be true.
A more realistic curve (for Revenue and/or Page Views, for example) might show a lack of participation in the business prior to listing for sale, and might have more of a downward line or trend.
Take Your Time Learning and Snooping
There’s really almost no better way to find your way on the site than to spend time on it. It won’t take a lot of time; even a few minutes a day or week over a month or more will give you valuable insights. I keep a reasonably decent amount of listings on my Watched List all the time that I check in from time to time.
So, How Does Flippa Make Money?
How much does Flippa charge? Flippa is transparent about how it makes money — see how Flippa makes money through fixed-fee pricing here.
Should I use Flippa, Escrow.com or Paypal to process my transaction? That depends on you, but you should always use a Payment Method that allows you as Buyer to “look over the goods” and “kick the tires” a bit before finalizing any transaction. Here is my skin-in-game review of Escrow.com.
Does Flippa Work? You Have to Start Somewhere
That said, does Flippa work? Yes, with caveats. If you are and individual interested in getting started with a beginner site and you know what you are getting into (only gives you a bare-bones WordPress theme, a few bells and whistles plugins, and non-original content), Flippa can get you one. A real, live person from Flippa Finder can also help you get started and answer your questions in a live, half-hour, one-on-one session.
For cheap, beginner sites, Flippa can’t be beat. The other online business sellers don’t list many of these. But Flippa can also work for larger, more profitable businesses, as well, if you do your homework.
For Larger Businesses, get More Help
For larger businesses, you need to be careful and do your due diligence (or have it done for you by Flippa or an outside firm). If you are wondering, “Is Flippa is good for selling domains?” you might want to investigate The Website Flip, which does not sell domains only, but looks at content sites with good domains. They offer a free newsletter, with websites for sale, niche site case studies, and guides.
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Disclaimer: All the information provided above and on this site is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.
Photos by Sander Sammy and Markus Winkler and Jp Valery and Claudio Schwarz on Unsplash