Table of Contents
- John Chen has bought and offered a variety of e-commerce sites utilizing Flippa.
- He bought his initial business for $7,500 and resold it for $550,000 two several years later.
- “It can be almost like what individuals do in the housing market,” said Blake Hutchison, Flippa’s CEO.
John Chen, 31, has taken an unconventional method to e-commerce entrepreneurship. Rather than start a immediate-to-client manufacturer from scratch, he is acquired little online businesses, grown their profits, and then resold them.
About 4 many years back, he used Flippa, a marketplace for getting and providing online organizations, to get a jewelry business called Blush and Bar for about $7,500. Two years afterwards, Chen said, he’d developed sales to about $1 million in earnings, and he offered the enterprise for $550,000, once again working with Flippa to full the transaction.
He utilised those proceeds to buy a marriage ceremony-gifts organization, which he purchased for $20,000 and then resold for $40,000, and then Posh Shoppe, an clothing shop for moreover-dimensions gals that he bought for $60,000. Posh Shoppe did practically $2 million in gross sales in 2021, which Insider confirmed working with screenshots that Chen provided. Chen claimed the keep was undertaking about $10,000 to $20,000 a thirty day period in income when he bought it in the summer of 2020. Chen has also hired 6 individuals to operate the enterprise.
Chen said he turned fascinated in flipping e-commerce storefronts right after functioning as an investment analyst at a hedge fund. Portion of his task was investing in search money, which give money to business people to get compact corporations and develop them.
He made a decision he wanted to do the exact point but on a lesser scale. Which is when he turned to Flippa to come across a organization to buy.
“I failed to have an MBA. I failed to have investors. I did not have any of that,” Chen mentioned.
So much, all of the enterprises he’s acquired run on Shopify. His principal system for boosting sales was as a result of Facebook advertising, but he’s also explored e-mail, SMS, and
“It was just a huge understanding procedure of e-commerce,” he reported. “You can find tons of ways to develop e-commerce organizations, lots of distinctive channels. And we experimented with a whole lot of them.”
‘It’s pretty much like what folks do in the housing market’
Launched in 2009, Flippa is an on-line marketplace exactly where people today can obtain and offer online firms. This contains e-commerce apps and Amazon sellers as well as on line suppliers driven by Shopify, BigCommerce, Wix, WooCommerce, and the like.
Flippa is in Australia, but 50% of its enterprise is in the US. Shopify suppliers account for about 50 % of Flippa’s transactions, mentioned Blake Hutchison, the company’s CEO. The common Shopify shop for sale on Flippa is about 3 to 5 decades old and generates about $250,000 in yearly sales.
Flippa isn’t the only marketplace where by Shopify store owners can glance to money in. Shopify has its own exchange for acquiring and providing suppliers, and firms these kinds of as MicroAcquire and Empire Flippers supply comparable providers.
Flippa sees almost 20,000 new customers on its system each month, Hutchison mentioned. He said he sees diverse types of buyers on Flippa.
Some are serial entrepreneurs who want to consider on the obstacle of building up a enterprise ahead of in the long run reselling it.
“It truly is a classic circumstance of obtaining, investing, renovating, and then promoting it again,” Hutchison claimed. “It’s virtually like what people do in the housing sector, though obviously the operations of a business enterprise are a little bit extra nuanced.”
Organizations these types of as Thrasio, which purchase and roll up Amazon sellers, also at times use Flippa to come across acquisition targets, Hutchison said.
Though Thrasio has faced its have struggles in recent months, the Amazon aggregator room is crowded, with some players boosting billions in funding to get 3rd-social gathering Amazon sellers.
There usually are not as quite a few companies focusing on Shopify suppliers, but action in the space is heating up. OpenStore, a startup that makes algorithm-produced provides to receive Shopify retailers, has raised more than $100 million considering that launching last yr. It has obtained 40 manufacturers so considerably and strategies to continue to keep up the rate.
‘Instead of beginning from zero and developing to a person, you might be starting at 5 and expanding to 10’
For Chen, making use of Flippa to acquire and sell on line firms gave him an entry into the world of entrepreneurship. He’d experimented with starting up DTC models just before but experienced struggled to get them off the floor. Getting an current company helped him avoid having to determine out a clear item-industry in shape, he mentioned.
“It receives really discouraging if you really don’t have any sales or you don’t get any traction,” he stated. “When you invest in a enterprise, you already have a little something that is there, so it is really a great deal less difficult to imagine that you can do it.”
Hutchison claimed that is a typical attract for Flippa buyers.
“Instead of setting up from zero and growing to 1, you happen to be starting at five and developing to 10,” Hutchison mentioned. “You’ve received all of the traction, all of the vitality and enthusiasm that’s appear from creating that manufacturer before your time.”
When it comes to selecting what shops he desires to acquire, Chen stated he appears for merchandise that provoke an psychological response from prospects — and avoids commodity products.
“The instance I generally use is a stapler,” he explained. “If you wanted to acquire anything that was like a chair or a stapler, you would just go on Amazon and look for for it. I required to be far more in the organization of a thing that failed to lend itself to lookup.”
But Chen stated he was no longer on the lookout for a “speedy flip” and desired to hold on to Posh Shoppe for now.
“I believe in the beginning, I bought into it — like a good deal of business people do — to get particular independence or to deliver prosperity,” Chen reported. “I’ve acquired that it truly is going to be a sluggish procedure and a difficult process no subject what, so you could as properly love it and produce worth for other individuals in the extensive term.”
“I consider it is just far better to emphasis on making a sustainable organization that individuals really like, that customers rave about, and that men and women will notify their friends about.”