What is Lead Flipping? Is Selling Leads Profitable?

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by Rebekah Pierce

Updated

Whether you’re interested in lead flipping as an additional revenue stream or to replace your full-time job, understanding the ins and outs of selling leads is important.

There are lots of questions you need to ask as you’re getting started. Is selling leads profitable? What kinds of leads can you sell? And perhaps most importantly, is lead flipping even legal?

In this post, we’ll tell you everything you need to know about lead flipping and brokering.

What does a lead broker do?

Small businesses collect lots of customer information, including phone numbers and email addresses.

A lead broker is someone who collects revenue by buying those leads and mailing lists from small business owners or marketing departments.

As a lead broker, you’ll sit between the lead generator (the person selling you the leads, or the small business) and the end-service provider (the person or company to whom you are selling). Unlike most startups, this is a business idea you can start today with no money.

Once you buy the lead, you’ll sell it back to the buyer while taking a small profit from the initial lead price. You can also sell leads to more than one buyer at once, helping you earn a higher overall profit.

Trends on the Rise:

Lead generation is indispensable in today’s marketing world. In fact, digital lead generation advertising spending in the United States is expected to surpass $3.2 billion by 2023. Get in on the ground floor in this competitive industry!

What types of leads can be sold?

types-of-leads

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Leads are highly profitable thing to resell online. There are seven broad categories of leads that you can sell, each of which has its own definition and marketability. These include:

SEO Leads

SEO agencies compete heavily with each other, so lead generation can be challenging – that’s where you come in.

As a lead broker for SEO agencies, you’ll sell information related to search engine optimization rankings and individuals or sites that might be in search of those services.

Web Design Leads

Web design leads are also in high demand because customers in this area tend to be one-off buyers.

Most businesses only ever need to build one website, so web designers and agencies are constantly on the hunt for fresh work.

Business Loan Leads

Business loan companies often buy leads so that they can find prospective borrowers more quickly. Although they typically can generate enough business on their own without buying leads, doing so helps these lenders get ahead of the curve.

Franchise Leads

A franchisor wishing to expand must also buy quality leads. As a lead broker in this niche, you’ll be finding prospective franchisees to open new franchises.

By nature, leads are very time sensitive; however, there are plenty of jobs without deadlines as well.

Real Estate Leads

Real estate leads can help realtors maintain quality buyer and seller databases. Again, this is an area that’s highly competitive and always in need of quality leads.

Sales Leads

Sales leads are the most common types of leads you can sell. These can be categorized even further into cold, warm, and hot leads depending on the level of interest expressed by the contact.

These have to be carefully selected by the broker to ensure that you’re getting the most significant information for buyers.

MLM Leads

Finally, MLM leads are some of the easiest to obtain but also the hardest to resell.

Although multi-level marketers need a steady stream of new leads, they also need to be able to tailor their pitches directly to their customers – something that can be a challenge unless you have the right type of information.

Is lead generation business profitable?

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Lead generation can be a very profitable business – if you know what you’re doing and you have the right connections. Not to mention it’s highly versatile, and could potentially be used to make money in the metaverse.

It has low start-up costs, too. You might need a website and domain to market your services but otherwise, you won’t have to cover a lot of overhead.

When you’re new to lead flipping, you can gather your own leads by driving people to your website and gathering their information to resell.

Buyers will often pay up to $5-$50 per lead. However, you need to make sure you are generating quality leads. Remember, the more programs and companies you are collecting leads for, the more money you can make.

Fortunately, flipping leads can start as a side hustle for men or women.

Trends on the Rise:

More than 58% of business owners have identified lead generation as a key challenge. More than 30% are relying on cold calling – meaning you have plenty of room to help them improve as a lead broker.

How do you get leads to sell?

Here are a few effective methods of obtaining leads to resell later.

1. Local Lead Generation

One of the most effective ways to get leads to sell is to target highly specific local areas.

It’s easy to do this because you will be able to geo-target keywords that are specific to your local area. It’s easier to rank your lead-gathering website for local SEO than it is for statewide or global.

The more targeted you can get in your search, the better. There will be less competition and you can resell those leads to other local businesses.

Although the pool of potential leads will be smaller, they’ll be higher-quality leads that are more likely to convert.

Tactics for Success:

  • Take advantage of being listed in Google Maps’ 3-Pack. This appears above the main organic search results for local keywords and reduces the amount of competition you’ll face when generating leads for local keywords.
  • In addition to gathering local leads, you can create and sell a lead generation website. This is another great way to make money in lead flipping

2. Lead Distribution Software

You can also use lead distribution software to collect, organize, and sell your leads. You can set up various campaigns that allow you to choose between different methods of distribution. They might gather information from social media, phone, or other avenues.

Examples include HubSpot CRM, Lead Assign, Freshsales, and Zoho CRM.

The beauty of lead distribution software is that it automates the entire process for you, which can reduce response time and prevent leads from going stale.

Of course, the downside of this is that since the process isn’t as personal, you might miss out on quality leads that the software missed.

Tactics for Success:

  • If you decide to use lead generation software, make sure it allows for a quick response time to prevent leads from going stale. A study by the Harvard Business Review found that you decrease your odds of converting a lead by 400% when the response time increases from just 5 to 10 minutes. Having an automated system in place to prevent this is key!
  • Make sure you’re collecting different information on different types of forms so that you can then target that information to different types of buyers.

3. Ping Post

Ping post is a specific type of lead distribution technology that uses strategic automation to connect customers with businesses. In it, you’ll generate leads from a variety of channels, usually from prospects who have filled out a form.

Then, the lead is set to a multi-tiered marketplace, or ping tree. These leads are pinged to a series of potential buyers based on preset criteria.

The buyers can purchase them or pass, but the pinging will continue until some connection is made.

The beauty of this system is that, like lead distribution software, it’s mostly hands-off. It also lets you reach the largest number of potential buyers at once.

What are the challenges of lead flipping?

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Although lead flipping is a decent way to make some money, there are a few potential challenges you might run into – and things to keep in mind.

1. Only Use Opted-In Information

As a lead broker, it’s also important that you certify all leads as opt-in leads. What does this mean?

When you provide your information to a business, as a customer, you probably don’t want it scattered all over the place.

Therefore, you are usually given the right to opt into or out of having your information shared with third parties.

When you buy these leads as a lead broker, you’re getting higher-quality leads that are not only more likely to convert, but are more ethical for you to obtain as well.

Although it’s possible that customers might not find out that their information was sold or flipped, it’s easy for them to become suspicious when they receive a ton of mail or calls shortly after signing up for one company’s email list.

2. Lack of Buy-In

You might be met with some hesitation on the behalf of the companies you are trying to purchase leads from.

Your ultimate goal in flipping leads is to make a profit – so others selling leads to you might be hesitant to sell. After all, they could make more money selling their leads directly rather than allowing you to handle the transaction.

Because of this, it’s important to market your skills and buyer network here. Sure, a company could sell its leads directly and skip the middleman (you) – but only you have the connections and expertise necessary to make the sale.

You need to provide additional value to the sale.

3. Data Security

Data security is essential to keep customers’ data safe. Make sure any information you transmit is protected with two-factor authentication.

You can also use an API key to track and secure your API functions.

4. Legal Issues

When you are selling leads, the information is intrinsically at risk of misuse. Therefore, it’s smart to chat with a lawyer before you embark on this line of work to make sure you’ve taken all the necessary steps to avoid accidentally breaking the law.

There are several laws that regulate the collection of personal information, such as the California Online Privacy Protection Act (California), the Personal Information Protection & Electronic Documents Act (Canada), and the General Data Protection Regulation (European Union).

Be sure to look into these.

Also, make sure you have a privacy policy on your website. This is required by law.

Wrapping Up

Lead flipping might not be the right way to make money for everyone.

However, if you follow the tips for profitable lead flipping as described above, you’ll likely find yourself among the top earners in this lucrative industry.

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About the Author

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Rebekah is a writer who covers all things education, business, agriculture, and finance. She owns a small farm business in upstate New York. Her educational credentials include a bachelor's degree in English from St. Lawrence University and a master's in special education from SUNY Plattsburgh.