Lead flipping is the dream everyone on the internet seems to be chasing. Working less, earning more, and having the freedom to do whatever you want.
Be that on a beach, traveling around the world or just living the perfect life…
And there are plenty of MMO businesses promising exactly that. And Lead flipping is one of these dream business models.
But is that all hype or is there truth to it?
Although generating leads is one of the top priorities for businesses…
Source: Marketing Charts
The reality of this business model is not so perfect.
In this post, we are going to discuss everything there is about lead flipping. You’ll find out what it is, the pros and cons, the whole process, and whether it’s a viable business or just another ‘too good to be true’ money making scheme.
What Is Lead Flipping?
Lead flipping is a business model where you buy a list of pre-qualified leads and then resell (flip) them at a higher price.
Or if you’re from an economics and finance background…Good old arbitrage.
When flipping leads, there are two parties involved:
- Marketer generating leads – these are businesses/people generating leads. You buy from them.
- Businesses buying leads – these are businesses that need leads. You sell leads to them.
Basically, it’s the same thing as flipping houses in real estate.
Of course, it’s not as simple as connecting a lead generator with any business…
Both lead buyers and sellers are looking for a specific type of leads with relevant information. For instance, if you generate leads in the real estate market, you’d consider leads such as:
- Verified Phone Number
- Email Address
- Kind of house they’re looking for
If a lead does not have this type of information, or it’s just a name and email; it’s useless.
That’s why one of the most important skills of a lead flipper is connecting the right people who are looking for specific information.
Lead Flipping Vs. Pay Per Lead Marketing
Pay per lead marketing might sound similar to lead flipping.
But it’s just a part of it, and it’s important to differentiate between the two because they are not the same thing.
What Is Pay Per Lead Marketing?
Pay per lead is a model where a client pays a fixed price for a lead.
Pay per lead company generates leads itself and sells them directly to a business.
There is no middleman like in lead flipping.
The Truth About Lead Flipping
Lead flipping sounds very tempting, especially in the way most businesses that sell courses on it present it.
It goes along the lines:
- Working less than 10 hours a week
- Making $10k a month
- Spending less time working while being able to travel the world or hang out with family
Unfortunately, that’s not how it works. If it did, everybody would be doing it. (you can get to that level at some point, though.)
Let’s look at the reality of lead flipping and how it really works. That way, you know whether it’s the right thing for you.
Here are a few things to consider before getting into it.
It typically has small profit margins
The problem with lead flipping is that you are a middleman.
Marketers generating leads try as hard as they can to generate as many leads as possible. But for all of that hassle, they want the money they deserve.
(Which makes it pretty difficult to negotiate.)
There is also the other side to it…
The businesses buying leads want to generate as many leads as possible, but they don’t want to waste a bunch of money.
(and as always, their budget is tight.)
You, as a lead flipper, are standing in the middle between the two, hoping to make at least some profit. Which can be very challenging.
It Takes Time
Quitting your job on the first day of starting lead flipping businesses is a terrible idea.
This is because lead flipping is no magic.
It takes time and knowledge to get started. Especially from the beginning, when you need to establish connections and create the whole lead flipping workflow.
Also, you need to have some experience with outreach and connecting both sides – a marketer generating leads and a business buying them..
So, unfortunately, you won’t be able to make $10k+ a month from day one.
It Is Competitive
You have to realize that you are not the only one doing lead flipping.
There are other people who are trying to get into lead flipping, so it can become very competitive, especially in big niches.
But there is something even worse…
You are competing with marketers who are directly selling leads to businesses. And there is only a very slim chance that you as a middleman have a better price than the source of leads.
You have to be very sophisticated and knowledgeable to thrive.
How Much Can You Flip Leads For?
The average cost per lead was $198 in 2019.
But that can vary greatly from industry to industry. For instance, there are some cases where you can earn $5 to $6 but also $100 for a lead.
This mostly depends on the factors such as:
- Lead quality
- Niche profitability
- The difficulty of obtaining lead
The more relevant information about a lead, the more valuable it is. And more profits you can make.
You can see the individual leads in the table below.
As you can see from the diagram above, the first lead is pretty basic, while the last is high-quality and ready for sale – a lot more valuable.
Also, in some niches, it’s easier to generate leads than in others which plays a factor too.
But yes, if you do a good job, make the right connections and maintain the relationship job, your lead flipping salary is uncapped.
Although it’s much more profitable to start a pay per lead business and sell the leads you generate to other businesses.
This is mostly because you are a middleman.
A much better option is to cut the middleman, be the marketer generating leads yourself, generate leads, and make 2 – 3X more from leads.
(with just a little more work required.)
We will talk more on that later in this blog post.
Is Lead Flipping Legit?
Yes, lead flipping is a legit business model. However, there are two things to keep in mind to avoid any legal issues:
You should always do your due diligence on the connection you are making for both parties.
- Opted-in information: Marketers must ensure to remain compliant during the exchange of consumer information.
- Risk of misuse: When selling leads online, it’s crucial to ensure that you have taken appropriate measures to avoid breaking the law. Look into GDPR, CPRA, and other regulations on data protection.
Also, some people think it’s bad that you cut the profit from the marketer generating leads and resell them for a higher price to other businesses. But you are actually doing both of these parties a favor.
Without you, they would probably never get to know each other.
(And would make nothing in revenue.)
Where to Flip Leads?
Buying leads from a marketer generating leads is pretty effortless. But finding the companies that will buy them can be tricky.
That’s why we have prepared this list of niches for companies that buy leads:
- Real estate
- Auto insurance
- Debt relief
- Online Education
These niches are huge and have facilities and staff to take a lot of leads at the same time.
They are also in a hyper-competitive market, so lead generation is necessary. You can also expect to get paid more than in smaller niches.
(we will talk about the practical ways to find companies in need of leads later.)
How to Start a Lead Flipping Business
Ready to start a lead flipping business?
In this section, we will take a look at how to start a lead flipping business and also give you some tips to destroy your competitors.
#1: Reach out to Potential Clients
Most companies are struggling with finding leads, so offering a pay per lead service from you comes in very handy.
Look for the companies in your niche on LinkedIn.
After you find a few, use email/phone communication to get to the decision-makers and propose your deal.
Additionally, there are also other ways to find companies buying leads, such as:
- Former clients
- Business & sales intelligence tools
You’ll need to play with all of these to find out which one suits you best.
#2: Find Companies Looking to Sell Leads
There are many ways to find companies looking to sell leads. For instance, you can look through PPC ads that promote lead selling.
Or just Google search for “buy leads + your niche.”
There are also many popular websites selling leads in different niches, including:
And so much more…
Check the whole list of some of the best marketers generating leads online.
#3: Create Effortless Lead Distribution
Having management software for lead distribution is a must for lead flippers. It’s beneficial for both parties – lead sellers and lead buyers.
For lead sellers, it allows for a smooth transfer of leads to the business.
Some tools even allow you to insert leads directly into the customer-relationship management software for immediate use.
It’s also a great place to store leads and all of their information.
For lead buyers, it allows checking lead validity and duplicacy.
You can immediately find out whether leads are not fake, duplicate, and prevent fraud. You can also track leads revenue and tons of other metrics in real-time.
Some of the best lead management tools include:
#4: Establish Long-Term Relationships
The lead flipping business model can feel really amazing.
This is especially true when you have a stable income and don’t have to worry about whether you are going to make it next month.
And one of the ways to gain this stability is to establish long-term relationships.
Don’t make making money your only priority.
Become an authority in your niche, create valuable connections, and meet professionals that you can leverage to grow your business.
(you can find some great people to hang out with too.)
One of the smartest ways to go about this is to start posting authoritative and informational content on LinkedIn.
Since it’s social media for business professionals, it’s a great place to find these connections.
BONUS: Never Stop Looking for More
Do you know what is one of the biggest downfalls of most lead flipping businesses?
Being satisfied with your current situation.
You might be complacent with the lead flipping salary you make. Making $10k+ a month is a great achievement.
But next month may not be like this at all…
You might lose a client and all your income. That’s why you should never rely on only one source of income.
(And always chase more clients… more marketer generating leads, and companies buying them.)
Lead Flipping is Legit (but the ads are scammy)
Lead flipping can be a great way to make a lot of money. You can buy leads cheaply and resell them for a bigger profit. All of that without doing almost any work whatsoever.
At least, that’s how it’s advertised. Right now, you know the reality of it.
It can be very tricky, especially making profits and getting into it.
This is mostly because you are a middleman. A much better option is to cut the middleman, be the marketer generating leads yourself, generate leads, and make 2 – 3X more from leads.
(with a little more work required.)
You can easily achieve that with LeadsHook, in our opinion, the most advanced and valuable tool for lead generation.
LeadsHook allows you to create hyper-personalized interactive quizzes with decision trees that will capture lead’s first-party data in seconds.
And provide a seamless experience at the same time.
These quizzes also allow you to further qualify leads and make the highest profits possible.
What’s even better, you can choose from plenty of pre-made lead capture forms, so you can hit the ground running with minimal setup.
You can then segment these leads and make sky high profits.
Why bother with a middleman when you can do lead generation with LeadsHook yourself?
Sign up for a 14-day free trial and give it a shot right now.