Flipping involves buying things at minimum expense, improving them, and selling them for a profit. A flipping business relies on observation, timing, and a willingness to see value that others overlook. For example, some flippers find rare collectibles in a second-hand shop, while others realise the potential of a fixer-upper house.

The flipping industry is broad, with flippers selling trainers, website domains, classic cars, vintage furniture, and property. There’s also substantial growth potential – property flipping, for instance, generated an average return on investment of 28.7% before expenses on houses resold during the third quarter of 2024 in the US.

Below, we’ll discuss the basics of flipping, including the best niches, legal requirements, how to secure funding, and more.

What’s in this article?

• What is a flipping business?
  
• What are the benefits of starting a flipping business?
  
• What niches work best for flipping businesses?
  
• How do you research market trends for flipping?
  
• What are the legal requirements to start a flipping business?
  
• How do you secure funding for flipping projects?
  
• How do you market your flipped items?
  
• What are common challenges with flipping?
  

What is a flipping business?

Flipping is about buying undervalued goods and reselling them for a profit after making improvements or strategically marketing them. Property is a well-known example: you find a worn-down house, spruce it up, and sell it for a higher price. You can also flip vintage watches, second-hand designer clothes, or websites.

This is what the process typically looks like:

• Watch for untapped potential: A successful flipper can look beyond surface issues and find something that can be quite valuable such as an antique vase. They monitor market movements and act before others notice the opportunity.

• Find undervalued items: These can include antiques at a car boot sale or online auction, vintage electronics from a local shop, and more.

• Make relevant improvements or changes: You might have to polish tarnished silver, restore a weathered dresser, or update website code. Some items need just a good cleaning and a better sales description, while others require deeper transformations.

• Resell for a profit: Once you’ve fixed the item or enhanced its presentation, you put it back on the market at a higher price.

What are the benefits of starting a flipping business?

The potential perks of flipping extend beyond profitability. Here are possible benefits:

• Relatively low barrier to entry: You don’t need many assets to start. Many flipping startups use someone’s spare room or garage rather than a warehouse or an office. Depending on your niche, you might need only a small amount of cash and a basic understanding of your target item. You can start with one product (e.g. an old lamp from the second-hand store) and see how much it sells for.

• Flexible schedule: You can look for items to flip on weekends, during your lunch breaks, or whenever you can spare a few hours. Some flippers run a full-time venture, but others treat it as a side hustle. That flexibility appeals to parents, students, and anyone who wants extra income.

• Chance to learn: Every product you flip can introduce you to something you might not have known. An item might prompt you to read about mid-century pottery techniques or how to authenticate trainers. That curiosity can develop into expertise that guides your work.

• Satisfaction in a job well done: There’s a certain satisfaction in finding an old wooden table that has been scuffed and ignored, restoring it to a glossy finish, and giving it a new life. The same applies to run-down houses or websites that need a revamp. You’re restoring or upgrading something so it can be of more use than before.

• Scalability: You can keep your flipping efforts small or expand once you have more capital to invest. Eventually, you might branch into multiple markets. You can keep your business small or grow it over time according to your goals.

What niches work best for flipping businesses?

There’s no single best category to flip. It depends on your interests, budget, and appetite for risk. Some people are drawn to vintage clothing, while others focus on property. Here are some categories that attract flippers:

• Property: This involves giving cosmetic or structural overhauls to houses or flats. It can be lucrative but also very risky. Renovations can run over budget, and property taxes add a layer of cost and complexity.

• Apparel and accessories: These include limited-edition trainers, designer handbags, and vintage clothes. The advantage is you don’t need thousands of pounds to get started, but you will need to research authentication and the resale market.

• Collectibles: Flipping coins, stamps, sports memorabilia, comics, and other collectibles suits those who don’t mind learning about obscure topics. Collectibles rely heavily on their condition and authenticity, so this could be a good fit if you love the subject matter.

• Electronics: Popular electronics, especially those that can be fixed with a little work, usually flip well. Examples include refurbished smartphones, gaming consoles, or vintage audio gear. Customers tend to be picky and knowledgeable, so attention to detail is important.

• Furniture and home decor: You can buy vintage furniture fairly cheaply, restore it, and sell it online or through speciality shops. Having enough storage space and knowledge to do the restoration is important.

• Websites and domain names: Some people buy domains they think will increase in value or purchase underperforming websites and improve them with better content, design, or marketing. Once traffic and monetisation improve, domains and websites sell for a higher price.

How do you research market trends for flipping?

Buying low and selling high doesn’t happen by chance. Savvy flippers study the market and look for emerging demand. Staying informed should be part of your daily or weekly schedule. Here’s how you could start your market research:

• Follow online listings: Sites such as eBay, Gumtree, and speciality forums reveal price fluctuations. Look for sold listings to get a sense of actual market value, and pay attention to how long it took items to sell.

• Check out social media: Instagram, TikTok, or dedicated Facebook groups can signal growing interest in an area. If you see an influx of posts that feature a particular type of collectible, that might indicate a growing market. Watch for people who say they’re searching for specific items or can’t find them.

• Use data analytics: If you’re flipping websites or domain names, tools such as Google Trends and search engine optimisation (SEO) software can show how often certain keywords are searched or how much traffic a website gets. That data can inform whether a domain is under-priced or a niche site has hidden potential.

• Stay connected: Communities of hobbyists can provide insight on what’s in demand. These can include forums for trainer enthusiasts, local car clubs, or a subreddit dedicated to mid-century modern furniture. In these groups, you’ll hear about emerging trends or overlooked treasures.

• Watch for economic shifts: Some items peak in popularity as a result of economic conditions. If interest rates rise, that can affect property prices. If there are supply chain issues, that might boost prices for consumer technology. Reading general business news can help you anticipate these shifts.

• Compare multiple sources: Don’t rely on just one data point. Continually checking across multiple sources – online, offline, and anecdotal – can help you make more informed choices.

What are the legal requirements to start a flipping business?

As you grow your flipping business into a consistent source of revenue, think about your legal standing, and perhaps consult a small-business lawyer or accountant. These are common considerations:

• Business registration: Depending on where you live, you might need to register your business name and choose a legal structure, such as a limited liability company (LLC) or sole proprietorship. This choice can affect your taxes and personal liability.

• Taxes: Taxes vary by state and country, but you'll likely need to register to collect and remit sales tax. You might be eligible for a resale certificate that lets you buy products you intend to flip tax-free. If you're flipping property, you'll be subject to real estate laws and additional taxes, including capital gains.

• Licensing and zoning: Flipping property might require building permits for renovations. If you're selling alcohol or restricted goods, local laws might require extra licensing. Look into whether these apply to your business to avoid fines or legal issues.

• Insurance: Consider insuring your business assets, especially if you store inventory in your home. Property flippers typically pay for vacant property insurance, which is distinct from standard homeowner policies.

• Consumer protection and disclaimers: If you're selling electronics, you might need to provide disclaimers about their condition or modifications you've made. The same goes for cars or other vehicles. Clear descriptions can help protect you from legal claims.

How do you secure funding for flipping projects?

The capital you need for your venture depends on the niche. For some, you can often get started with items you buy at car boot sales. For others (e.g. property), you need a more substantial investment. Below are possible methods of funding:

• Personal savings or self-funding: If you can afford it, using your savings is the simplest route. You maintain control, but you also take on all the risk. Still, starting with your funds can be a good way to test the venture without worrying about debt or investor demands.

• Credit cards or personal loans: Some flippers use credit to finance quick turnaround deals and pay off the debt as soon as they make a sale. This can be risky if the sale doesn’t go as planned or takes longer than expected. Interest charges can decrease profits, so proceed carefully.

• Hard money loans or private lenders: Individuals or small groups assess whether you’re qualified for a hard money loan based on the property’s value rather than your credit rating, and interest rates can be steep. But these loans can help you buy the property and start renovations on an accelerated timeline. Real estate flippers often rely on them.

• Crowdfunding: In some situations, you can set up a crowdfunding page that outlines your plan to flip a specific item or property. This is less common for tangible goods, but it might work if there’s a compelling reason for people to invest with you.

• Peer-to-peer lending platforms: Online lending platforms can connect you with people or institutions who are willing to fund your venture. The interest rates might be better than those of credit cards, but carefully review the repayment terms before you commit.

• Profits from previous flips: Typically, the best way to grow is to reinvest what you earn from earlier flips. This approach might be slower than with a big loan, but it manages your risk level because you’re using your own profits.

How do you market your flipped items?

To sell your products, you need to let potential customers know what you have and why it’s worth buying. Marketing is often the difference between a high-value sale and unsold inventory. Here’s how you can make your flipping business stand out:

• Online marketplaces: Sites such as eBay, Etsy, and Facebook Marketplace attract a broad audience and are useful for small or medium-sized items. Make listings with clear photos, detailed descriptions, and competitive (but not too low) prices. If you’re not getting much interest, update your listing or slightly adjust the price to help convert potential customers.

• Speciality sites and forums: If you’re flipping cars, try posting on classic car forums. If you’re selling coveted trainers, look for niche groups or trainer-focused marketplaces such as StockX and Laced. Tapping into dedicated communities can help you find better-paying customers who understand the value of what you’re selling.

• Staging and presentation: A great listing photo can make a difference. Show the item in a context that appeals to customers, such as a vintage lamp on a stylish bedside table or a renovated house with natural light and staged rooms. If you’re flipping a website, include screenshots of traffic or revenue (if applicable) with an understandable explanation of how it works.

• Storytelling: People love a good story. If you rescued a mid-century modern dresser from an old barn and lovingly restored it, share that story with prospective customers. This personal touch can persuade potential customers to buy your products. If you flip property, mention any unique, sought-after features you discovered while renovating.

• Local pop-up or consignment shops: Bigger or heavier items (e.g. furniture) might sell well in a physical shopfront if you have a good relationship with a shop owner. Though consignment stores take a cut of the final price, you can benefit from their established customer bases and foot traffic.

• Social media ads or influencers: If you want to reach a larger audience, consider buying targeted ads on Instagram or Facebook. You can also partner with local influencers who might post about your brand or items. This can be especially effective for fashion and decor flips.

• Building a brand: Name recognition is helpful if you plan on flipping consistently. A memorable Instagram handle or a simple website that showcases before-and-after photos might earn you repeat customers. People who appreciate your style or attention to detail will usually monitor your future listings.

What are common challenges with flipping?

TV shows and your favourite resellers’ social media pages might make flipping look glamorous, but it requires a lot of work behind the scenes. Here are potential pitfalls many flippers face:

• Buying items that never sell: This is the most obvious risk. If you misjudge the market or let your excitement overrule logic, you might invest in something nobody wants. Research can help, but there’s always a chance you’ll be stuck with excess inventory.

• Undervaluing repairs and upgrades: Maybe you bought furniture that looked like it needed just a fresh coat of varnish, only to discover the wood is rotten. Or perhaps you have to pay thousands in additional expenses for a house that has a hidden plumbing issue or a defective roof. Account for surprises in your budget, and ensure you’ve thoroughly inspected what you’re buying.

• Market fluctuations: Consumer preferences and economic conditions can change quickly. That domain name you thought would be profitable might not draw the traffic you anticipated. A certain style of clothing might fall out of fashion. Stay informed to avoid unprofitable flips.

• Overextending finances: Property flippers can quickly find themselves overwhelmed by mortgage payments or high-interest loans if their properties don’t sell on schedule. Even small-item flippers can feel the pressure if they have a lot of money tied up in inventory.

• Logistics and storage: Furniture and large items require space. If your garage is full and you can’t keep track of everything you own, you risk damaging items or forgetting about them. Stay organised, and label your stock so your products are available when you need them.

• Legal and tax complexities: Selling across borders can complicate your taxes. If you’re flipping houses, you’ll need to meet building codes, apply for permits, and pay fines if you miss a step or don’t meet standards.

• Time and stress management: Flipping can be fun, but it can also be overwhelming if you’re managing multiple projects at once. Balancing your primary job (if you have one), family obligations, and daily chores can be difficult if your flipping hobby becomes all-consuming.