Opportunities on Flippa -buying/selling websites

[Ankesh]

Originally Posted by Dien Rice

Any suggestions on how not to get "ripped off" when buying a website?

Thanks Dien.

I have been on both sides of the table - have sold websites before as well as bought them.

First thing before you go on a marketplace to buy a website is to determine your strategy.

- Which kind of website will you be able to grow and make even more profitable. Blogs? Forums? Social sites? Adsense based sites? Mini websites? Ecommerce sites? Platform sites? Not websites at all but apps?

- Are there websites / products that you can start promoting to your already existing clients?

Think hard on this. Because determining the kind of website you can make successful is really essential. I have sold a fast growing website to a really successful entrepreneur only to see it fail. Because he was awesome with membership sites but didn't understand a platform website.

Second thing figure out how much you can afford to pay for a website. Can you extend yourself if you get financing? Some people don't like the risk of financing. So fix your max budget before you even start seeing websites.

On flippa etc there is a lot of noise. A lot of lousy websites. Get on a few private brokers lists if you can. These brokers usually vet the seller for you - so the quality of websites is far superior. The flip side is - these brokers won't sell $1000 websites. They only sell 6-7 figure websites. So unless you are willing to spend that much, you need to spend a lot of time sifting the wheat from the chaff. Patience is the key.

Finally doing due diligence on the website before you purchase. You can never do enough due diligence. So the amount of time you should spend depends on the risk - the cost of the website.

The minimum you want to do is:

- Get the seller to show you the analytics and stats of his accounts live - via skype. Screenshots can be faked. Live stats is much harder. You want to go through at least a few months of their analytics to make sure they've not just bought a few thousand page views from someplace to make a quick sale. Trends is more important than snapshot.

- Do a domain audit. Check its backlinks. Does anything look shady? Go through its facebook pages and app store pages. Check to see if there is any fake engagement etc done.

- Do a competition audit. Google and google adwords are good starting tools.

- Do a product / inventory audit. Especially if its a drop shipping based website. For an app or something, its hard because most sellers will refuse to show you the code and so you won't have any idea how well or poorly its been coded.

- If the website comes with employees / freelancers who are essential to run the website - talk to these guys before you buy. Make sure you know that they will stay along with you too.

Hope this helps.