Top Mistakes When Buying a Website

Buying WebsitesAre you making these mistakes when buying websites?

If you are buying websites regularly or are a first time buyer, there are some common mistakes you should be aware of that can cost you hundreds and even thousands of dollars if not avoided.

The first mistake many people make when buying websites is they get caught up in the emotion of the sale.  They fall in love with the website before the purchase.  During the website due diligence phase of reviewing the site, they may find something that causes a red flag, but they look past it because they love the site so much. Continue reading “Top Mistakes When Buying a Website”

Yahoo! Site Explorer Is Dead – Here’s a List of Alternatives

Thanks to the merger with Bing/Microsoft, Yahoo! officially closes the doors on its Site Explorer tool. A message on their site says:

With the completion of algorithmic transition to Bing, Yahoo! Search has merged Site Explorer into Bing Webmaster Tools. Webmasters should now be using the Bing Webmaster Tools to ensure that their websites continue to get high quality organic search traffic from Bing and Yahoo!. Continue reading “Yahoo! Site Explorer Is Dead – Here’s a List of Alternatives”

The Most Important Due Diligence Task to Perform Before Buying a Website

Would you like to know the secret to being more thorough and efficient with your due diligence when buying websites? It’s to drill down on the most important assets of a website. In order to explain this better, let’s first define what “assets” and “drill down” mean.

The assets of a website are generally closely tied to the reason you’re buying the site. Most assets of a site fall into one of the following categories:

  • Automation – e.g. Outsourced relationships, software
  • Scaling – e.g. SEO potential, systems
  • Diversity – e.g. Multiple sources of traffic, revenue
  • Monetization – e.g. Adsense income, member sales
  • Relationships – e.g. Email lists, rss readers, followers
  • Traffic – e.g. Organic traffic, referrals
  • Buzz – e.g. Links, Press
  • Intellectual Property – e.g. Products, content

I’ll talk more about these in a future post, but once you’ve identified which assets of a site are most important to you in your buying decision, then it’s time to drill down.

Here’s an example. Let’s assume you’re buying a website for its Adsense income. In order to drill down, we need to ask ourselves the question, “What causes this?”. Here’s how it would go with this example.

Question: What causes the Adsense Income?
Answer: The organic traffic the site gets.

Question: What causes the organic traffic?
Answer: The SEO of the site.

Question: What causes the SEO?
Answer: The backlinks and content.

Question: What causes the backlinks and content?
Answer: Hiring content writers and link builders.

Can you see how we drilled down to find the real source or cause of the Adsense revenue? In this case, it’s the content writers and link builders. At first glance, you might have assumed just looking at screenshots of the Adsense revenue would be all the due diligence you’d need to do. In reality, you also need to perform due diligence on the organic traffic, the SEO, the backlinks, the content, the content writers and the link builders. If you want to really take a shortcut, you could simply perform due diligence on the content writers and link builders because they caused everything else.

Can you see how important this concept is? Can you see how it can save you time and reduce your risk of being scammed when buying a site?

I know it works for me. I have a checklist of about 500 different due diligence items I can potentially check before buying a site, but I might not check 250 of them because they aren’t relevant to the assets that are important to me.

If you’d be interested in hearing more about those 500 due diligence items, let me know by commenting below. If there is enough interest, I’ll share some of them with you.

The Danger of Sloppy Transactions When Flipping Websites

Whether or not we’d like to admit it, our world of buying and selling websites can be pretty sloppy at times. And as it pertains to arbitration and things just going bad in general with deals, nearly ALL of it stems from plain old sloppiness.

I’ll be the first one to raise my hand in guilt to admit that I’ve been too lazy, too trusting, too unorganized, and too uninformed in the past. Every deal I’ve lost money on, (even the ones that were “other people’s fault”), is a direct result of my own informal approach to the deal. Which I GUESS means it was my fault after all.

When you approach a transaction with all your ducks in a row, all your boxes checked, and all the stones overturned, the margin for error becomes very slim and all potential instances of arbitration over the deal vanish. So here’s a few things you should always make sure to do in any deal…

Due Diligence

This one is common sense, but goes at the top of the list. Approach the website (and it’s owner) as though you were conducting a criminal background check. That means you check out everything!

– The domain. I use domaintools.com to check for age, drops, registration matching the owner, etc. Then I use Market Samurai, Open Site Explorer, SEMRush, and SEO Spy Glass, to verify the incoming backlinks, the PR, the rankings, etc…

– The Seller. If you’re buying from Flippa or other online marketplaces, check feedback. Check their previous listings. Check their trust scores. GOOGLE THEM. Ask them LOTS of questions. Get to know them a bit. Is this the first site they’ve sold? Why are they selling it?

– The content. This one has bitten me in the rear before. Check Copyscape for duplicate content. Make sure it’s original. Make sure you have the right to use it. Make SURE it’s included in the sale!

– The Income. More and more, screen shots just aren’t doing it for me. I’m a serious buyer. Could you please take 60 seconds to make a screen recording of your affiliate dashboard, or your merchant account? I’d feel much better seeing it live…Especially if the account doesn’t come with the sale.

– The traffic. Same as income. Login, and show me. But I’m also gonna check sites like compete.com, alexa.com, quantcast.com, etc…I know they aren’t always the most accurate, but they should give me a general consensus as to whether or not the seller is telling the truth.

– The terms. Especially if it’s monetized with affiliate programs. Check out the affiliate programs terms. Check out any special payment arrangements the seller has with the vendor. Make sure those benefits transfer to you. Make sure the site isn’t in violation of those terms, etc…

– Everything you see posted in our Due Diligence category.

Contracts

I’m willing to bet that over 70% of website transactions, especially ones that originate in most marketplaces, don’t even utilize contracts. I suppose I understand why. Who knows how to write a contract? Who want’s to pay a lawyer? Can’t you get in trouble for ‘practicing law without a license?’

Getting a contract in place is one of the most important aspects of any deal. All of your protection (buyers and sellers) hinges upon the contents of this agreement, and it’s ability to be enforced. Having a lawyer that can draw up the contract for a few $100 is well worth it for larger deals. But even deals that are less than $10k need to have some sort of formal agreement.

At a minimum, I recommend you grab a templated contract from somewhere like Legalzoom.com, or Sitepoint.com. I’ve used these templated contracts many times. They’re written by professionals who know legal jargon, and cover most of the basics. It’s not ideal, but it’s better than going commando with nothing at all.

Record Conversations with Other Parties

This may seem a little anal, but having a skype chat, or a recording of a voice chat can come in handy when disagreements arise. When you begin working on a new deal, I recommend you create a file in your inbox to save all email correspondence as well. This little bit of extra work will settle any issues about what has been promised, and what hasn’t.

Third Party Verification of Stats

This falls under due diligence, but is really only necessary for large transactions. An accurate recasting of financial records, tax statements, etc, by a professional tax expert gives an added piece of security and peace of mind to everyone involved.

Listing Agreements with Brokers

If you’re dealing with a website broker, you’ll want to have their services clearly defined in a listing agreement. How long will you give them to sell your site? What commission do you agree to pay them if they are successful? Do they have sole and exclusive rights to sell your site during the term of the listing agreement, or are there exclusions depending on where the buyer comes from during that time frame?

Most website brokers shoot from the hip, and don’t even use listing agreements. However, most states require that a pre-approved one be used by any and all business brokers that deal in their states. (That means web based business brokers as well). It protects you and them…So if they don’t sign one with you, don’t work with them.

Payment Terms & Financial Checks

This falls under contracts, but is important enough to separate out by itself. Most large transactions need some sort of verification to be done on the buyer to prove they actually have the funds available to make the purchase. Even if they’re only making a down payment on the business, if it’s a substantial amount of money you should make a stipulation for payment in that amount to be made in full within a certain time frame after the signing of the deal.

This is just protecting the deal. You don’t want them to flake out on you half way through the transaction because they didn’t really have the money to back up the offer they made you. Or, worse yet, they were counting on a third party investor to pay for the site and that person wasn’t involved in negotiations. So at closing, they go to their “investor” friend, and to their surprise and yours, there’s no money available.

Ask them to send proof of their ability to pay you before signing the contract. And make sure to put a “payment due by” date in the deal. Not doing so is just leaving the door open for potential problems…aka, being sloppy to the point of hurting yourself.

Introduction to Business Employees & Content Providers

This can’t be done pre-sale often times because of confidentiality, and fear of employees leaving once they find out the business is for sale. However, having some plans to get to know them, or atl east ABOUT them, is only smart.

I purchased a large blog that had it’s content generated by a team of writers in the past. The writers had no clue the seller was selling the site, and when I stepped in, I had to re-staff the entire team because I was left short handed when several of the key contributors jumped ship. They were loyal to the original owner, and I was the new guy on the block. None of them were held by a contract to continue providing the great content they were providing, and because I didn’t have a plan for retaining their services when I became the owner, the business became a burden for me quickly.

GET TO KNOW THE TEAM BEHIND THE PROJECT. I can’t stress this enough. At a minimum, you need to have the selling owner feel out the employees for you to ensure the business’ stability post sale. Are they planning to stay? Will their compensation change? Will their responsibility increase or decrease? If you don’t have a plan, it can blow up in your face.

To wrap things up, a lot of what goes wrong in online business transactions is a result of sloppiness. Plan for the worst case scenario and many times by simply making that plan, you’ll avoid issues down the road. This list is by no means exhaustive, so there my be a part 2 of this article coming in the near future.

What are your thoughts? What do you do before a transaction to make sure the deal goes smoothly? Anything you would add to this article? Leave your thoughts in the comment section below.

Beware of The Recycled Stats Website Seller Scam

A few months ago, I purchased toprankedhosting.net from Flippa.com for $1300. ($1250 + $50 for paypal fees) from a user that has since had their account suspended.

At first glance the site looked like a great buy. $350/month in net revenue, 2,000 unique visitors, pretty good domain name, with room for improvements in the SERPS…So I bit! After all, he had revenue proof in the form of screen shots from his Paypal account from Hostgator’s affiliate program, and traffic stats from his server.

My first mistake: Rushing the deal in order to win the auction

Normally (especially for larger transactions) I’d spend some more time doing my due diligence on the site before buying. But there’s something about the public auction format that causes us to act hastily some times. The level of competition can drive you to place a bid faster than you should in order to snag the deal, especially when it’s a smaller amount of money like the one in this example.

Take a look at the auction for yourself: Auction for TopRankedHosting.net.

I broke so many of my own rules on this one, it’s no wonder I got scammed! Thankfully, justice has since been served, and I did get all my money back after about 3 months of detective work and legal action. So instead of highlighting the obvious red flags I ignored, like his lack of feedback, not checking copy scape, etc, etc…I wanted to show you how he initially got away with it.

The Re-used Stats Scam

After purchasing the site and installing my own analytics, I began to get a little worried after 3-4 days because the site got zero visitors. Not a single one…And the seller claimed 2,000 per month.

I tried to contact the seller, and had no response for several days. Egg on my face! Did he Photoshop the screen shots?  How could this have happened to me? How could I have been so careless and not seen this before buying the site?

While digging through the various pages in wordpress, I stumbled across an internal link to another site I believe was owned by the seller. He forgot to change it out. The page wasn’t published inside wordpress so it was impossible for me to have seen it prior to purchasing the site.

I clicked through to check it out, and low and behold, another hosting affiliate site with the exact same content and page structure!

I WAS HOT!!!!

I attempted to contact the seller dozens of times with no luck. After reporting him to Flippa, and contacting my bank (because Paypal doesn’t insure digital goods), I was able to get it taken to court, and got my money back.

But how did he pass it off as a legit project?

My personal belief is that he took screen shots of earnings and traffic from his other affiliate site that actually was making the money and attempted to pass off the copy cat site as the real thing.

I’ve seen several other scam artists attempting the same thing lately. Be wise and learn from my mistake! NEVER buy a site in haste to beat out other bidders. If it goes before you have a chance to perform all the normal due diligence you would regularly do, let it go! And double check all screen shot “proof”. Make sure you verify it’s for the site you’re purchasing before placing a bid.

– Lesson learned….Justice served….And I live to buy another day.


Anatomy of a 5-Figure Flip: Make Your Money When You Buy

This is the first article in a series, documenting the step-by-step approach I took to turn a $300 initial investment into $10,000 in 3 months, working only a few minutes a day. In a later article, I’ll also share the mistake I made that cost me at least another $8,000 on this same flip.

My heart started to beat a little bit faster and I could feel my palms get sweaty as my double-take confirmed that I wasn’t looking at a typo.  There it was on the NameJet pre-release list, with a marvelous “0” in the “bidders” column next to it: BetterParenting.com.  Its scheduled release was still weeks away, but it had gone unnoticed so far, and I had no desire to alert potential suitors to its presence.  An early bid would push this name out into the spotlight, so I just wrote myself a note: Keep track of this domain.

Continue reading “Anatomy of a 5-Figure Flip: Make Your Money When You Buy”

I’m Perplexed – How Does This Guy Sell So Many Websites?

I saw a listing on Flippa today that has me thoroughly confused and perplexed. I’m not going to give this seller’s profile because I don’t need the headache of the potential complaints and legal threats from the seller. I don’t think it’s necessary to know who the seller is anyway to appreciate this post. And if you really must know, you should be able to figure it out.

At the time of this writing, the seller had 127 ended auctions on Flippa. That amount of activity immediately caught my attention, but what really jumped out at me was that they all used the same title. Here are just five titles I copied:

SEO Optimized Site- $990 Guaranteed Amazon and Adsense Income Monthly
SEO Optimized Site- $2970 Guaranteed Amazon and Adsense Income Monthly
SEO Optimized Site- $810 Guaranteed Amazon and Adsense Income Monthly
SEO Optimized Site- $972 Guaranteed Amazon and Adsense Income Monthly
SEO Optimized Site- $2430 Guaranteed Amazon and Adsense Income Monthly

Literally every auction had the same title. The only thing that was different from one auction to another was the amount of the guaranteed income. When I checked out these auctions, they were all startups with no traffic or revenue. The idea any seller can guarantee a buyer guaranteed income is a joke in and of itself, but to guarantee the astronomical income this seller is claiming on startup websites is even a bigger joke.

Continue reading “I’m Perplexed – How Does This Guy Sell So Many Websites?”

Which Is The Best Online Escrow Service?

best online escrow serviceIt’s important that you find the best online escrow service when you are flipping websites priced at $1,000 and above. When you start flipping websites at that level, it’s imperative that both buyer and seller are protected. Outside of hiring a lawyer, using an online escrow service is the next best thing, but which service is best? Most website flippers and domainers will say Escrow.com, but I’m going to buck the trend and recommend Safefunds.com.

I’ve used both of these online escrow services and have had good experiences with both but I use Safefunds whenever I can because they are much cheaper and the escrow process goes so much smoother with them. Here is why I think so highly of them.

Buyer Funding Options

Safefunds allows you to fund your escrow account by bank wire, electronic funds transfer, or by check. Unlike Escrow.com, they don’t accept funds from PayPal or credit cards. For that reason you may think that Escrow.com is the better online escrow service but think again. If you look closely at Escrow.com’s terms, you’ll notice they only allow PayPal and credit card funds if you use their Premier Service (which is twice as expensive as their standard service) and there is a transaction limit of $5,000. In addition, the funds are subject to Escrow.com’s approval.

Unless your transaction is under $5,000 and you absolutely must fund the purchase via PayPal or credit card – and you’re willing to spend almost double the escrow fees – then I concede Escrow.com is the best online escrow service when it comes to funding options. However, I don’t think that many people fall into that category. If you are o.k. with a standard bank wire, EFT, or check then Safefunds is the way to go.

Seller Payment Options

Safefunds allows sellers to withdraw their funds either by electronic funds transfer (inside the USA), international wire transfer (outside the USA), or by check. Withdrawing by check is free while the domestic electronic funds transfer at the time of this writing is only $12.

Escrow.com offers all the same withdrawal options including check by overnight courier , but with the exception of the check via regular mail, which is free, all their withdrawal options cost more than Safefunds. As an example, at the time of this writing you’ll pay $20 for a domestic electronic funds transfer – $8 more than Safefunds.

Online Escrow Service Fees – Where Safefunds Really Shines

Safefunds, like Escrow.com, doesn’t charge anything to open an account with them. There are no fees for the buyer and the seller fees are a flat fee based on the value of the transaction. Let’s say you’re selling a website for $3,500. If you use Escrow.com, you’ll pay 3.25%, or $113.75. At Safefunds you’ll pay just $48! While the buyer technically doesn’t pay any escrow fees with Safefunds, as a seller you can always split the fees with the buyer. In my example, if you and the buyer agreed to split the fees 50/50, you’d pay just $24!

Compare the fees of these two online escrow services yourself. Click here for Safefunds complete fee schedule. Click here for Escrow.com’s fees. You’ll notice the fees for Escrow.com’s “Premier Service” is almost twice that of their standard service.

Defining The Terms of the Transaction

Both of these online escrow services are similar when it comes to allowing the buyers and seller to define the terms of the transaction. There are no restrictions with either service. The buyer and seller have complete control and flexibility in defining how the transaction will proceed and when the funds will be released.

Buyer and Seller Protection

Safefunds provides the same protections for buyers and sellers that Escrow.com does in the event there is a dispute during the transaction. If at any time during the transaction there is a problem, you can file a dispute. Safefunds will get involved immediately to help resolve the dispute and the funds will be held securely in escrow until a resolution has been met between the buyer and seller.

Customer Service

Safefunds customer service is simply amazing. If you send them an email with any questions or concerns before, during, or after the transaction you will get a personal response within a few hours. I can’t say the same with Escrow.com. There have been times when I have sent them an email and I didn’t hear from them for a day or more! I have always been impressed with Safefunds responsiveness. I encourage you to test both of them. Send each a general inquiry via email and see which one gets back to you sooner. If I was a betting man, I’d bet Safefunds would be first to respond.

As I said at the beginning of this post, both Escrow.com and Safefunds.com have been good to me and are two escrow services I have used and would recommend. I have never had a problem with either service. However, given the advantages I’ve outlined, I believe Safefunds.com is the best online escrow service and I use them every time I can.

Don’t Get Scammed – Check Fake PageRank Before You Buy

check-fake-pagerankWhy should you check fake PageRank before you buy a website based on its PageRank? Because it’s not too hard to fake as you’ll soon discover. Before we dive into that and before I show you how to check fake PageRank, I want to provide a brief primer for those who may be new to Internet Marketing or who might want a quick review of the subject. It’s important you understand what PageRank is, what role it plays with Google, and how to check PageRank as many sellers highlight their websites’ PageRank as a selling point.

What Is PageRank?

PageRank, also known as PR, is a numeric value that Google assigns to a web page. In theory, the number tells us the importance of that web page on the Internet. The values range from 0 to 10, with 10 being the highest and most important. For example, a PR6 website is “more important,” or has more authority, than a PR5 website. In addition, each level of PR is ten times higher than the next so that same PR6 website is ten times higher than the PR5 website.

How Is PageRank Calculated?

Don’t ask! Seriously, unless you are a math geek and really get into algorithms you don’t want to know. If you insist on knowing, then click here to read an indepth explanation from WebWorkShop.net. For the rest of us, let me explain it on a very high level.

When one page links to another, Google sees that as a “vote” for the page being linked to. The more links it gets, the more important the page must be in the eyes of Google. The number of links to a page isn’t the only thing that matters, however. The importance of those links themselves also plays a role in Google’s calculation of PageRank. The importance of the page providing the link, in other words the PR of the page linking to another page, will determine the importance of the link. Google then takes the number and importance of the links to a page to determine its PageRank.

Confused yet? The bottom line is this, the more links you have pointing to your web page from other “higher” PR pages, the higher PageRank your page will be!

Is PageRank Important?

Yes and no. It matters to some extent because it is one of many factors that Google uses to determine your page’s ranking in the Google search engine. However, it is a minor factor in determining the ranking. You see examples of this all the time. It’s not uncommon to see PR0 pages rank very well for various keywords while other higher PR pages don’t rank well at all for the same keywords.

Google itself says PageRank isn’t that important. It was not only removed from Google Webmaster Tools in 2009, but Google Webmaster Trends Analyst, Susan Moskwa, said this in an article on WebProNews.com, “We’ve been telling people for a long time that they shouldn’t focus on PageRank so much…” There was even a push to remove the PageRank indicator on the Google Toolbar but as stated in the same article, Google wouldn’t remove it because it was too much of their branding.

Based on all that, you would probably conclude that PageRank isn’t such a big deal after all and you’d be right. However, until Google officially says PageRank is dead and no longer supports it, it will always play an important role in the buying and selling of domains and websites. That being the case, it’s important you know how to check fake PageRank so you don’t get scammed.

What Is The PageRank of a Given Page?

The easiest way to check PageRank for a web page is to have the Google Toolbar installed on your browser. The Toolbar has a “PageRank” indicator on it that will tell you instantly the PageRank of any web page you visit. Alternatively, there are a number of places online that you can check PageRank. One website that I always use is PRChecker.info.

IMPORTANT NOTE: The PageRank you see isn’t entirely accurate. The PR of a web page is always in flux but Google only “officially” releases the PageRank data periodically throughout the year so the PR you see is technically old. Furthermore, the PR shown doesn’t tell you if it is fake or not.

Check Fake PageRank

It is amazingly simple to fake PageRank of a given web page. What these scammers do is redirect a domain to a higher PR domain. The PageRank shown then for the lower PR domain actually reflects the higher PR of the domain being redirected to. As simple as it is to fake PageRank, it is equally as simple to check fake PageRank. Here is how you do it:

Go to Google.com and enter:

info:www.DomainYouAreChecking.com

You should also check the non-WWW version as well:

Info:DomainYouAreChecking.com

If a different domain name appears in the search results then it usually means the domain has been redirected and the PageRank for the domain is fake. Take a look at this example: www.PodcastingProfessionals.com is a domain with a supposed PR8 for sale on GoDaddy auctions at the time of this writing. However, if we check fake PageRank for it we see this:

check-fake-pagerank

Notice the domain that shows up in the search results isn’t PodcastingProfessionals.com. Instead what shows up is Twingly.com – a PR8 domain:)

You should now have a solid understanding of PageRank and how to check fake PageRank. Armed with this information you will now be able to make better buying decisions whether you are buying aged domains or websites.

Check Backlinks To Website With Yahoo! Site Explorer

The best free tool to use to check backlinks to websites you might be interested in buying is the Yahoo! Site Explorer tool. When you buy a website, most likely the seller will highlight how many backlinks the site has but the seller usually won’t tell you if those backlinks are quality links or not. And regardless of what the seller does or doesn’t claim, you want to be able to verify the backlinks yourself. This video provides an overview of the Yahoo! Site Explorer tool and how to use it to verify a website’s backlink history.

Be sure to read the due diligence series to learn other things you should research before buying websites.