Updated: Aug 23
If you wish to go beyond traditional investment instruments, consider flipping digital products. It's a surprisingly profitable practice, and it's gaining traction in tandem with the widespread use of the internet.
Platforms like Flippa make it easy to buy and sell digital products.
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As tech and digital firms continue to innovate and develop, digital real estate continues to become even more valuable—and lucrative.
Similar to flipping houses in real estate, one can buy a website or other digital assets at a low price. After fixing and improving the asset, you can then sell it at a profit.
No matter where you are in your flipping journey — whether you’re a casual onlooker, a fund manager, or a beginner investor — this quick guide will help you grasp the basics of how to flip a digital product.
But first, let’s take a closer look at these online investment tools and where you can find them.
What Are Digital Products?
Simply speaking, digital products (also known as digital assets) are online platforms or entities that an individual or company owns. Any digital product with a regular audience has the potential to be monetized. Given the almost unlimited reach of the internet, these assets show great growth potential.
Think of them as the real estate of the online world. Like real estate, digital assets can be taken over, restructured, and resold at higher prices.
Some investors keep multiple assets and maximize their profits through monetization efforts like ads, affiliate marketing, and the like.
Let’s look at the various types of digital assets that are flipped for profit.
Websites are a top choice for flipping because they can be monetized in several ways. These include:
One such example is Ariana Huffington’s blog, The Huffington Post. Established in 2005, it features lifestyle and political content written from a liberal point of view. Since its inception, The Huffington Post has attracted a large audience, thanks to ads and other means of monetization.
In 2011, the New York-based web giant AOL purchased Huffington’s blog for $315 million while allowing her to remain as Editor in Chief. That’s an impressive return on investment within six years.
2. Domain Names
Domain names or website URLs are also a common type of digital asset. Not only do they increase in value over time, but there’s also a limited number available at any given time.
Any digital marketing effort hinges on a well-chosen domain name. A catchy and memorable URL gives businesses incredible brand recall and helps them stand out from the competition.
The best part? Domain names (website URLs) become more valuable as they age and gain site visitors' trust. The most expensive domain name ever sold was Cars.com, which was purchased at an astonishing $872 million.
For more information about flipping domain names specifically, check out: "How to Make Money Flipping Domain Names."
3. Mobile Apps
Mobile apps are also a type of digital asset that can be flipped. However, since they are harder to develop and market, apps are not as widely flipped as websites.
Some notable examples of flipped apps are:
Navigation app Waze was caught in a bidding war between Facebook, Google, and Apple. It was eventually sold to Google for $1.3 billion.
Text condenser app Trimmit, later rebranded as Summly, was developed by then 15-year-old Nick D’Aloisio. A billionaire investor saw its potential and invested $300,000 in the app, which Yahoo later acquired for $30 million.
Usually, it is the developers of the apps themselves who sell their creations for huge sums. A developer may be an individual, a group of people, or even a tech company.
4. Digital Products
Investors may also acquire digital products and information resources like subscription-based or membership programs. An investor can earn a lot from an existing training program that already has a large number of subscribers.
People also invest in digital and info products that have great potential but require small improvements. These include video courses, training programs, and membership programs. Afterward, these products are rebranded to highlight the enhanced content and features.
A good example of this is the Authority SEO course that RankXL first created. This course was later acquired by Alpha Investors for an undisclosed amount and was relaunched as Authority SEO 2.0.
Since the original course was popular in the SEO community, Alpha Investors saw the opportunity to grow it even further. They added new modules and refreshed content before relaunching it. This is a classic example of asset flipping.