Flippa confirms their focus has shifted from domains to online businesses, but I’m concerned about some of the scammy businesses I found on the site

Last week I wrote a post about how Flippa really fell off the map when it comes to domain names. I was happy to see that someone from Flippa actually read the post and commented. In their comment they confirmed my observations around their shift in focus but also corrected some confusion around irregular bidding activity.

Since they took the time to comment I wanted to make sure their comment was surfaced to the community, so here it is:

Hi Morgan,

Always good to speak with an experienced person in the industry!

Over recent times Flippa has diversified from domains into online businesses. We still support domains, but the focus of Flippa moving forward is the buy and sell of online businesses.

I did want to also quickly respond to a few comments made for the general knowledge of everyone. Importantly, Flippa employees are not allowed to engage in any auction or classified listing – Flippa remains impartial at all times. Editors choice is a selective promotion of the most interesting and ‘best’ listings on Flippa at any particular time – again this is impartial and actioned by our marketing team. Flippa does not have any internal brokerage, in fact we are working directly with many brokers from all around the world – bringing their expertise and individually managed listings to the Flippa community. Also if anyone has any questions or concerns about anything related to Flippa, our support team are available 24/7 and can be reached at support@flippa.com. Please do get on contact if you have any concerns or any general questions as we are happy to help.

I personally have always been pretty skeptical about buying online businesses from Flippa given how easy it is for sellers to put up fraudulent listings. The challenge is that Flippa doesn’t verify (to my knowledge) the traffic and revenue that the seller is claiming.

This morning I went to Flippa and took a look at one of their “Editor’s Choice” online businesses for sale. The company claims to be an Amazon store making $848/month. Taking a look at their revenue though something looks weird…the business had a profit of $5,358 in March and then dropped down to $1,046 in May. Both of those numbers are higher than $848 but I just don’t think this sounds like a business that you can buy and poof, you’ll be making $848/month.

I’d be interested to understand why the business did over $5,000 in March and then two months later, revenue dropped to just over $1,000? To me this sounds like a business that you’d buy and then a month later it would be doing $0/month.

The challenge here is that Flippa gave it the “Editor’s Choice” badge, which, as a user, I would take to mean that they endorse the business. In reality, Flippa hasn’t verified the traffic and revenue and honestly, this looks like a scam to me given the major revenue fluctuations and strange monthly revenue claim of $848/month.

On this listing Flippa claims that this will generate passive income with only 10-15 minutes a week of work. I’d be very surprised if that’s true and I’d also be interested to know what research they did into the mechanics of the business to come up with that time estimate?

You can take a look at the listing I’m talking about here.

What do you think? I want to hear from you, comment and let your voice be heard!