Some people breed dogs for a living. Or even horses. Some people grow bedding plants and then sell them on as seedlings in the spring. But have you ever thought you could do much the same thing breeding and selling baby businesses?
It’s actually a proven, classic business model.
Over the years, one way a lot of money has been made in business has been to set up a business, get it up and running, and then sell it off for a profit. Famous entrepreneurs such as Richard Branson and Stelios Haji-Ioannou have started up many fledgling businesses over the years… then sold all or part of them on for a juicy profit.
You probably didn’t think you could ever become this kind of business tycoon, setting up promising new businesses and then flipping them on for a good profit. But you can. And it will not cost millions to do. It won’t take years. (You won’t even have to buy a fleet of aircraft!) You can do it all virtually… on the Internet.
This opportunity is something that I’ve noticed has been going on for a while now in the hidden corners of online entrepreneurship: Basically what some smart online entrepreneurs are doing is creating niche online businesses, setting up a website for them, getting everything moving… purposely with the intention of selling them off for a profit. In some ways, almost like rearing plants or animals for sale!
So in this article I’m going to look at how it is done and whether it is something you could make money from.
Website Flipping: How to build and Sell Websites for Big Profits
One thing I should say. I see this very much as an experimental opportunity blueprint. As far as I know no one has ever looked into how this opportunity might work before. It’s very much a first, so to some extent we’re moving into uncharted territory.
Exactly how does this opportunity work?
There are basically four steps to this opportunity:
• Identify a business opportunity, eg. a demand or a gap in the market.
• Create a small online business that supplies that demand.
• Generate publicity and traffic for the website.
• Sell the business off to someone who wants an up-and-running business with potential. Repeat the process as many times as you like.
Basically, you’re just doing what you would do to set up any small Internet business. But doing it with the idea of selling it for a profit, rather than running the business as such, from day one.
I think you can probably see now how this might work as an entrepreneurial opportunity. It could be perfect for you if you’ve got good ideas and inspiration (if you haven’t I’ll show you where to find them shortly!) but aren’t all that interested in the day-to-day grind of running a business.
And I think you can see how appealing it might be to buyers. Not everyone is an ideas person. Not everyone can handle the nitty-gritty of setting up a business. And then, of course, some people are lazy. If you pick a good idea there’s every chance there will be plenty of people who’ll pay a few thousand pounds to buy it from you, even if it’s only a fledgling business.
What you need for the website flipping business opportunity
This is very much a desk-based, home-based, PC or laptop business. All your businesses are going to be created and exist mainly online. It’s an opportunity you can work from home, in part-time hours.
You’ll be creating online shops. So you won’t need a bricks-and-mortar shop, or indeed any premises at all. You won’t need any machinery or equipment or any staff. In many cases you won’t even need any stock (more information about how that works later).
Capital requirements? You might need 100 or 200 or so to set up each business. Maybe even less depending on what type of business is involved. You’re not going to need a lot of technical or Internet skill to operate this project either.
Finding great ideas for your fledgling businesses
This is very much an ideas opportunity. The more original your idea the more likely it will sell, and perhaps for more. So don’t rush. Take some time to find and research your ideas.
Choose something you’re interested or involved in personally. It will be a lot easier to think of good ideas, and to create an attractive online business. For example, are you interested in… driving, or golf, or painting, or martial arts, or reading, or cookery, or cameras, or growing tomatoes? Do you enjoy holidaying in France? Are you a new parent? Anything like this could be a great idea for a fledgling website selling relevant products and services to others.
To have the best chance of success your fledgling businesses should probably be:
• Something that can be operated mostly online.
• Fairly niche, so you are not competing with massive corporations doing much the same thing.
• Original or novel in some way, perhaps having a unique twist that similar websites don’t offer.
• Be fairly hands-off, not needing too much personal attention.
• Something that can be transferred to a new owner easily – not needing special skills or experience.
Don’t forget websites that sell services as well as products. Also, your website could be some other kind of e-commerce business, not just one selling products or services. For example: A price comparison site. A review site. A forum or chat room. A directory site. They’re all online businesses that someone might be very interested in buying.
How trending can help you spot a website flipping winner
Trending means spotting products and services that are new or newish… and getting involved with them as they are enjoying an upswing in popularity. It’s a good technique for spotting new website ideas that people will really want to buy.
You can spot trends by monitoring forums, chat rooms, blogs and social networking sites. What’s the new “in” product or service that people are talking about… and that you could build an Internet business around? For example, is there a new fashion trend on the streets? Is there a new fitness trend or hobby which you could sell products for? Is a new TV show starting to take off… for which you could sell related products?
Once you’ve got a few trending ideas check them out using the Google Trends tool. Tap in any subject area, interest or product type – anything from Ugg boots to teeth whitening kits – and it will tell you if it is becoming more or less popular as a search over time. That should give you some clues as to whether there could be an associated website worth setting up.
Spotting trends using Google Trends isn’t an exact science. But use it as a starting point, add information from other sources, plus a good dollop of common sense and it can be a very handy tool.
Setting up your website
Once you’ve decided on your idea the next step is going to be to set up a website for it. Remember, this is very much a clicks-and-mortar opportunity. You won’t need a physical shop… your website is your shop front.
First choose a good domain name. Preferably one that says what your online business is about and is as short as possible. (Remember, good domain names can be worth good money in their own right.)
Register your domain name with a domain name registration service. Go for the cheapest registration service you can find and just register the name for one year.
Now arrange website hosting. Again, go for the cheapest hosting you can find. You probably won’t need massive bandwidth or storage space. There’s no point paying a lot… because your buyer might well move it to their own choice of host in future.
The next step is to design your website. This is one area where, at one time, this opportunity would have come to a crashing halt. Because the cost of getting someone to design and build the site for you would have eaten up a lot of the profit. But a newish development means you can actually build a decent site yourself… even if you don’t have a lot of technical know-how.
It’s all thanks to something called WordPress. WordPress started a while ago as a kind of blogging system but it’s evolved into a fully featured content management system which includes all the tools needed to design and build your own professional website. What’s really clever about WordPress is that it’s intended for ordinary people to use. WordPress allows ordinary people to create smart looking websites without a great deal of technical know-how.
WordPress is available to you absolutely free.
What is your website likely to need?
Obviously, what your e-commerce site will consist of will depend on what you are selling. Here are a few suggestions:
• Home page. Explaining what your site is about. Tip. Video is the latest website technique. It can be used to create an impressive home page without a lot of writing.
• Useful information about the product/service you’re selling, eg. sizing, colour choices, technical information.
• News section.
• Online shop showcasing your products.
All of these (and many more) can be created with WordPress.
Tip. What I would suggest you do is Google for businesses selling similar products to the ones you have chosen to sell. See what their websites are like. If they appear to be successful and well run you could use similar ideas to build your own website.
Finding suppliers for your business
The next step is to find suppliers who can supply the products and services your website is going to sell, and arrange trade terms with them.
Of course, whoever buys your online business will be perfectly at liberty to find their own suppliers. But a ready-made source of supply all ready to roll will greatly enhance the appeal of your website as a going concern.
Look for an established, reliable supplier: One who knows the product or service well, who carries good stocks, and who will be able to provide all sales and service support. You don’t want to have to get involved with this yourself. If you wish, choose several suppliers to create a unique product mix.
How to find suppliers?
When approaching suppliers ask for their best trade terms, ie. a trade discount on their recommended retail prices.
Next, I’m going to look at a couple of ideas that will make sourcing products much easier and which I would highly recommend for this opportunity.
Stock made simple: Dropshipping
Because you don’t need any stock to run a dropship-based business (nor the cash to invest in it) you could, in theory at least, have a business with thousands of customers, earning millions a year, and never touch a single product!
Dropshipping is a business model where the seller sells goods but does not keep them in stock. Instead they pass the customer’s order to their supplier, who then despatches the goods to the customer directly. The seller makes their profit on the difference between the “buying in” and “selling out” prices.
Here are two ways to line up dropship suppliers:
Use a dropship house. Dropship houses are companies who specialise in supplying dropshippers. Most of them tend to charge you an annual or monthly subscription before you can buy their products however.
Approach suppliers direct. Do a Google or similar search for “dropship”… or dropship plus the name of the product or products you want to source. With luck you’ll be able to hunt down suppliers who will sell anything from spare parts for washing machines to sports equipment on a dropship basis.
Stock made simple: Affiliate Schemes
Affiliate schemes are another way of effectively stocking your website business without any stock as such. By signing up to an affiliate scheme you simply promote a supplier’s products or services on your website. When a customer clicks on “buy now” the order goes through to the supplier who processes it, supplies the product – and then pays you a commission on your order.
There are affiliate schemes for almost any product or service you can imagine. So, for example, you could set up a travel agency website using affiliate schemes, or a bookshop, or a music/video store, or a wine club, or a ticket agency, or a hotel booking website, to name but a few.
The easiest way to find suitable affiliate schemes is to use an affiliate marketplace site.
Amazon Associates: Amazon Associates is Amazon’s own affiliate scheme and one of the easiest to use. With this, you introduce customers to Amazon’s range of products – everything from books to music, to electronics and household goods. If they then buy something, Amazon pays you a commission on the sale.
Amazon’s aStore is perhaps the most exciting Associates tool. aStore allows you to build your own online shop. You get a ready-made store which can be linked to and from your website and/or any pages within it. You can customise the colours and designs so it will integrate nicely. Then you can pick products from Amazon’s range to sell there. (So, for example, if your website is about cookery you can create an aStore which is stocked with a range of cook books plus kitchen equipment and so on.)
Other ways of monetising your site
While we’re looking at ways to generate an income from your site it’s worth mentioning some other methods you could use. Anything that generates extra income will be a benefit in that it will make your business more interesting to potential purchasers. Here are a couple of ideas:
• Google AdSense: With Google AdSense Google displays relevant ads, on your site and pays you a share of the revenue. It’s very easy to sign up and follow.
• ClickBank: ClickBank is a digital products affiliate marketplace. You can find all kinds of ebooks and other digital products there to promote on your site for a commission.
Building traffic for your fledgling website
You don’t have to do this… but it will help make your online business attractive to purchasers if you can show that your site is receiving regular hits. Even better if you can build a good level of hits of course, although that can take time.
Here are a few ways of doing it:
• Use Google AdWords to generate traffic by bidding on keywords in Google searches.
• Offline advertising. In magazines that are relevant to the products you are selling.
• Join in forums and chat rooms.
• Write reviews and post them to review sites.
• Exchange links with similar but non-competing websites, or use paid banner advertising.
• Write short articles for article directory sites that point to your site.
Selling your fledgling website… and turning a profit
Once your online business is all up and running, everything is working, and you’re generating some traffic you can put it up for sale and cash in your investment.