As a follow up post on our topic several weeks ago regarding “The Recycled Stats Website Seller Scam”, I wanted to share a few more thoughts on due diligence when buying affiliate sites.
The most commonly overlooked aspect of websites that generate their revenue via affiliate programs, is the affiliate program’s terms and conditions. Most of the time when a website changes ownership, the seller will include the affiliate account that is connected with the site to make things easier during the transfer for the buyer.
The problem comes when the buyer attempts to change the payment info from the seller’s details to their own. It’s not uncommon to be met with a few nasty surprises from the product vendor when they find out you’ve purchased a site connected with sales they receive via that affiliate account.
Let me give you two examples of how this has affected my own purchases, as well as those of my close mastermind partners.
Example #1: The Coupon Code
Last year I purchased a site that was generating decent revenue for a high ticket piece of software as an affiliate. The affiliate program tracks it’s sales by giving each of the affiliates a unique coupon code their visitors can use during checkout. If the visitor uses their coupon code, they get credited with the sale.
The seller had worked out a special arrangement with the vendor to use the coupon code “WSO”, which was cheaper than any other coupon available for other affiliates to use by $5. The vendor agreed to let this affiliate run a Warrior Special Offer at the Warrior Forum and receive credit for all the sales made with the WSO coupon code.
To boot, the thread at Warrior Forum ranks #1 in Google for “Product Coupon Code”. So this seller had a pretty sweet deal negotiated with the vendor. Every time someone would hit the checkout page and see the coupon box, they would go to Google and look for the cheapest coupon. Since it was $5 cheaper than the rest, and it ranked #1, the majority of sales made funneled through this affiliate account….Which is why I purchased it!
3 months or so go by without a hitch. I was even able to increase the number of sales this site generated using the WSO coupon code by nearly 2x. Things were looking great, and I was just about to break even on my purchase (after only 90 days), when the vendor decides to revoke my right to use the coupon code.
Turns out, it was a special arrangement between him and my seller, (who was buddy buddy with the vendor), and when the vendor discovered I was now receiving credit for the sales,…ZAP! Coupon Code revoked, income destroyed. I was in “violation of the affiliate terms and conditions” (which were conveniently updated), that say coupon codes cannot be transferred. Long story short: I got burned. Hard. And it was because I didn’t perform due diligence in respects to how the affiliate sales were being generated, and the arrangements between the vendor and my seller. I assumed all affiliates were treated equally. Lesson learned. They’re not.
Example #2: Cookie Stuffing
Another site purchased by members of our mastermind group here at FlipWebsites.com in the past year was a site in the learn guitar niche. The site had solid track record, great rankings, good traffic, tons of content and millions of views on the Youtube Channel.
We performed all the due diligence you normally would expect educated buyers to perform, except in regards to how the affiliate tracking was being manipulated by the seller that wasn’t disclosed originally.
The seller was cookie stuffing. For those of you who don’t know what that is, basically it’s placing your affiliate tracking pixel in the visitor’s browsers each time they come to your site, and if they purchase the product at some point down the road, you still get credit for the sale.
This isn’t such a horrible thing, especially if you’re doing pre sell work for that product and can legitimately make a case for having helped close those sales. Most people consider it grey hat at worst. However, most vendors don’t allow it. A few months after the sale, the buyers in our group that purchased the site were contacted by the vendors with a warning to cease stuffing cookies or risk losing the affiliate account altogether!
Imagine the surprise when they didn’t even know they were cooking stuffing in the first place. As a result, revenue has decreased for that site. The seller in this instance probably didn’t even know they were doing anything wrong either to be honest. But that proves the point of this post all the more. The devil is in the details we don’t check up on.
So next time you are looking to purchase a site with affiliate driven income, make sure to ask the seller if they have special deals worked out with the vendor on commission structure, coupon codes, payment dates and methods, etc.. etc.. Then make sure to ask the seller if their site adheres to all of the affiliate program’s terms and conditions (such as rules regarding cookie stuffing). Go to the vendor’s site and read the affiliate agreement yourself too! Leave no stone unturned.