7 Ways To Fail At Website Flipping: My Experiences Over 12+ Years

mushfiq sarker

Website flipping can be a very lucrative business. There’s a high demand for websites made or improved by people who know how to grow websites to generate revenue. 

Website flipping is also a very challenging business to build up. It requires study, skill, and dedication to get good at multiple skills crucial to online success. 

When someone fails at website flipping, it’s almost always due to one of the seven following reasons.

Let’s get into it!

Fail #1: Buying First Instead of Building

The first step for anyone who wants to succeed at flipping websites is to build their first website from scratch. This is how I started, and I’m a firm believer it’s how everyone who wants to succeed in this business should start.

1. Learn ALL the Necessary Skills

Building from scratch teaches you all the skills you need to know. On my EasyWins.io database topics are divided into the categories of: 

  • Basics
  • Authority
  • Site Structure
  • On-Page SEO
  • Off-Page SEO
  • Traffic 
  • Revenue

This isn’t an accident. It takes a ton of skills for someone to successfully build a money-making site and to be able to replicate that process multiple times.

When you set up hosting, set up WordPress, learn to redesign a theme, run into your first technical error that must be solved – this is crucial information to understand just the basics. 

When you see firsthand what works and what doesn’t, you not only have the knowledge to do these things well again but you know how to tell apart freelancers you will hire who know their stuff from those who don’t.

2. Why Can’t You Just Hire Professionals?

You can, and at a certain point, you may have certain tasks you train up a team member to do so you don’t need to deal with it anymore.

In the beginning, bypassing these steps puts you in a vulnerable spot. If you don’t have the skills to troubleshoot, then you need to hire experts to fix the problems.

Experts cost money, and that gets expensive fast. You are also more likely to make a bad hire because you don’t have the experience, skills, or background knowledge to tell apart the real professionals from those who just pitch themselves well.

Learn the processes thoroughly, then you can hire others.

Fail #2: Taking Shortcuts on Due Diligence

Taking shortcuts on due diligence is never a good idea. I have watched many beginners take shortcuts to get a deal done instead of being patient and waiting for the right one.

This is asking for trouble. It’s a very bad thing to do even if you’re an expert, and even worse as a newcomer.

Repeat after me: FOMO should never cause you to take shortcuts or skip due diligence steps.

This is an easy mistake to understand. Especially if you’ve just looked over 100 deals and not found a single good one. 

That’s a part of the process. You’re not missing out on hidden gems, you’ve got to go through a lot of trash to find the treasure.

Making this mistake is how you overpay and get stuck with a site with too much commercial content, bad links, or other issues that can (and often do) result in major Google penalties.

Read the detailed due diligence framework that I wrote up.

Fail #3: Overlooking The Business Model Risks

The upside of profitable content sites is easy to see. If the potential upside wasn’t easy to grasp, there wouldn’t be so many of us making a living flipping websites or others looking to break into the market.

While it’s fun to focus on the upside, new website flippers need to understand the risk of website flipping, as well.

Content sites are reliant on 3rd party platforms and changes in the markets that they have no control over. That means risk.

Common major risks in this business model include:

  • Google Algorithm updates
  • New Google features or layouts
  • Display ad providers
  • Affiliate rate changes

Sites rely on display ad networks and companies with affiliate programs to make money. Even if you monetize via digital products, you still need Google to send organic traffic.

There are endless stories of how a Google algorithm update wiped out giant sites that previously had even millions of views a month.

If a display ad provider shuts down your account or an affiliate program slashes its rates, you may find your site loses most of its traffic and revenue overnight. This is a legitimate risk in the website flipping business.

Fail #4: Investing Too Much Upfront

There are two separate ways I often see failed website flippers investing too much upfront.

  1. Investing too much money into the first purchase during the buying phase
  2. Investing too much time/money to grow the first site that the flipper bought

1. Spending Too Much on the Buy

The old saying about the profit being made during the buy, not the sell, applies to many website flipping deals, too. 

Overpaying for a site:

  • Increases the amount of work needed to break even or profit on the flip
  • This means the active cash flow takes much longer to help you break even
  • Limits the possible profit margin

All these problems mean more risk in the transaction. Risk is something we want to minimize on a first deal, not increase.

My recommendation is to spend less than $20,000 on the first site buy. While this can vary relative to personal wealth, it’s a good rule of thumb for newcomers.

This is enough to find decent potential sites, makes sure you’re looking for good deals and isn’t so much that it would permanently sink most people.

Make sure to read up the website valuation framework to understand how much to pay.

2. Spending Too Much Growing the First Site

The other mistake is spending too much money to grow the first site. The first flip is exciting and it can be tempting to pour money into 100 new articles right off the bat.

This is a bad move if you’re not an experienced flipper. Not all content will hit. In some niches, certain types or styles of articles work much better than others.

Take it slow. Invest in small batches of articles and pay attention to the returns over time. 

This lets you see what articles are working, which aren’t, and you can adjust your budget to order more of the content that is actually making you money and moving the needle. 

Learning how to adapt your growth campaign is a skill that pays off for all future website flips

Once you know for sure what’s working, then it’s easy to invest more into that type of content later.

Fail #5: Not Diversifying

Diversifying is important to protect your income and your business. The most common diversification mistakes come in three forms:

  • Buying too many sites in the same niche
  • Optimizing and monetizing all sites with one type of monetization
  • Not diversifying traffic sources

If you have 10 outdoor sites or 10 toy sites what happens when a major affiliate in the market slashes rates or there’s a Google update affecting that specific niche? All ten sites could get hammered by the same update.

This is also the danger of over-optimizing with one type of monetization. Many people used to build “Amazon sites” that only focused on optimizing for Amazon Associates. Then in April 2020, Amazon cut most rates from 6-8% to 4% average and many website owners lost 50-70% of their income overnight.

Don’t rely on one niche or one monetization method or one traffic source.

Fail #6: Treating It As A Hobby

Website flipping is not a hobby. It’s a business.

Building a successful website flipping practice takes an enormous amount of time, learning, and investment to be successful.

Even beyond learning all the skills needed just to make a profitable website, there are other skills that need to be learned to be successful with website flipping that are time-consuming. This includes managing a team, managing partnerships, and managing the business itself.

This isn’t a hobby, it’s a full-time business. Those who don’t treat it as such will fail.

Fail #7: Expecting Success Immediately

Website flipping is an amazing way to make money online, but it’s not fast or easy. Tons of work goes into creating that moment where a big profitable sale takes place.

Too many potential website flippers fail because they expect fast success and that results in them quitting when things don’t happen fast.

Here are a few aspects that take time:

  1. SEO changes on a site takes time to ramp up
  2. New content needs time to get indexed and then rank
  3. New monetization sources take time to optimize and ramp-up
  4. New team members take time to be trained and coached

Even the most experienced and skilled website flippers with plenty of resources know it takes months to see things play out.

My Actionable Next Steps

What next steps should beginner flippers, or those who failed the first time and want to persevere in website flipping do?

If you’ve never built your site from scratch:

  • Find a niche you have an interest in, do some keyword research, and buy a domain. 
  • Purchase hosting and set up WordPress
  • Add tracking for Google Analytics and Google Search Console
  • Set up Google AdSense/Ezoic, and Amazon Associates account
  • Create content for the next year to learn how to make it work
  • Look at traffic numbers, and skills you’re not comfortable with, and analyze what you need to do to focus on improving those areas

If you have built a site from scratch but the first flip failed:

  • Which steps have you failed at? Where did your efforts fall short and why?
  • Don’t overlook common due diligence red flags
  • Learn to diversify income sources
  • Make a work schedule for yourself for hours you will spend on the business to get serious

This is a serious business.

mushfiq sarker

Analyzed by Mushfiq Sarker

Mushfiq has been buying, growing, and selling website assets since 2008. His first exit was in 2010. Since then, he has done 218+ website flips with multiple 6-figure exits. He is the founder of The Website Flip. Check out all Mushfiq's articles, LinkedIn, or Twitter.

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