Dave and Jay - Crazy Web Entrepreneurs

Part 1 - Part 3

Earlier this week, we talked about the basics of flipping websites. Today we’re going to learn about what questions you, the buyer, need to ask in order to protect yourself, and also discuss what types of websites make good flips. But enough jibber-jabber: let’s talk business!

How can I protect myself?

First off, the cold, hard, reality is that there is no 100% surefire way to never get ripped off - but as long as you can accept that, you can protect yourself from 90% of the scammers out there looking to make a quick buck.

1. Never purchase a website with money orders, checks or wire transfers.

It’s very easy to get caught up in the deal, but if you pay for a site via credit card or even Paypal, provided you fund the purchase with your credit card, then you have the recourse of simply charging back the purchase if you do get ripped off; 99% of the time online customers will win during the charge back process, so it’s a simple, yet effective way to play safe.

2. If the deal is too good to be true… run away!

Scammers love to play on human emotions, and it’s your job to use common sense. If a site is earning $100/month but only selling for $300, you have to ask yourself: why is that person charging so little? It’s possible you might be missing a bargain, but honestly, unless you have money to burn it’s just not worth it..

3. Don’t trust screenshots!!!

Believe me, it doesn’t take a lot of skill to edit a site’s traffic info. Generally you have two options: either ask that the seller allow you access to his cpanel so you can see the stats yourself, or ask that the seller use a free service like extreme tracking for a day or 2 so you can see what his traffic is like and where it’s coming from.

If a site has traffic, then likely the revenue screenshots won’t be bogus; however if a site is earning a lot of coin off very little traffic, more likely the situation is ‘buyer beware’.

4. Only buy off established people.

If you’re purchasing your sites via marketplace forums like the ones listed in part 1, then we would whole heartedly recommend buying from people with an established record (ie. people who have an online reputation to protect). If you’re unsure how to tell if someone is established, take a look at their post count and how long they’ve been a member. If someone has 3 posts and has just joined, then the auction is more risky than buying from someone with 1400 posts and a 2 year membership.

What questions should I be asking?

1. Ask where the traffic comes from.

There are ways for people to inflate traffic stats such as using adwords, buying pop-under advertising, or using scripts to force people back into there site. Usually you can catch this by simply looking at where the traffic is coming from, so never hesitate to ask… and when in doubt, ask even more questions.

2. Why are they selling?

While this is a pretty obvious question and one which is easy to lie about, it should still be asked so that you can put the pieces of the puzzle together; generally if a successful site is being sold, it’s more than likely because something bad has happened - usually a loss of search engine rankings. If an unsuccessful site is being sold, either it’s a template site, or something no one has had the time or luck to develop.

For the most part, people will tell you anything… but 90% of the time they are selling because the site is in decline or they couldn’t get it to work.

3. How much work/time does it take to manage?

It may seem great to own a site that makes $300/month in revenue, but if you have to work on it for 10 hours a week, it’s not really worth the purchase. If you’re just starting out, go with something that doesn’t take much time - or any time - to update, in order to make your sale more appealing when it comes time to sell.

Also, it would be a good idea to ask if the site has a CMS built in, or some sort of back end software; if so, ask to see it or at least ask for some screenshots.

4. How much Bandwidth does it use?

Right now, the big rage on the forums is people selling proxy sites. These sites are hard to place a value on, because while they usually have a lot of traffic, it’s hard to tell how much is legitimate (ie. will still come to the site after you own it). They also unfortunately suck A LOT of bandwidth, meaning your hosting costs are ridiculously high. Personally, I’d recommend staying away from sites like these, but this question is applicable to any site you buy in order to keep your hosting costs down.

5. Is the site being linked to by purchased/owned links?

It’s quite easy for someone who already owns a high traffic site or 2 to create a site and link to it from his own sites, thus making the site appear to have loads of traffic - and in some cases, revenue. However, after you buy the site, the links come down and you’re left holding the bag.

Avoiding this problem isn’t simple, but if you’re dealing with an established seller, they will likely answer you honestly. It’s usually advisable to also ask to see the refferal logs; the logs will show which websites and search engines brought traffic to the site, so if a site has 3000 unique visitors and 2500 clicks from the owner’s site, then you’d better ask him to include a link from that site with the purchase or walk away.

If you have any questions about buying websites, please feel free to ask away. Next week I will be posting part 3 of the flipping website series, covering what types of sites to buy and how to monetize them.