A Melbourne flag-seller who flew the ISIL flag from his front yard in the outer suburbs says it's about making a buck and not endorsing the terrorist group.

Rob Boot, who sells flags from his home in Carrum in the city's south-east, raised the black-and-white flag of the bloodthirsty cell for all driving along the Nepean Highway to see on Wednesday morning.

The flag went up at 7am and within five minutes, he said, a man pulled-up and paid $40 for it. It was the second he had in stock after selling another one two weeks ago.

"They didn't say why they wanted it, I think they were just surprised they saw it and they could have it for $40," Mr Boot said.

At a Sydney mosque last week, a similar flag was auctioned off for $2000, sparking NSW Premier Mike Baird to indicate the flag could be banned.