Opportunities on Flippa -buying/selling websites

[Dien Rice]

Hi,

I've recently been spending quite a bit of time on Flippa http://www.flippa.com , looking at websites to potentially buy...

There are a lot of opportunities there - with websites in the whole range, from a few bucks, to hundreds of thousands of dollars...

However, there's the opportunity to get "ripped off" too...

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

I'll give a quick example I noticed. One website I was looking at claimed it was making $1,400 per month in profit, but... It had virtually no traffic! How can you make money from a website with virtually no one going to the website? It does not "compute"...

Another one claimed most of its traffic was from the USA. However, when I looked it up on www.Alexa.com , Alexa said most of its traffic was actually from India...

If you have any suggestions on what you need to do for your "due diligence" when buying websites on places like Flippa, I'd love to know. (Or pointers to places where I can find out more about this...)

Thanks!

Dien

I've used Flippa...

1. Use an escrow service
2. If they can't verify their income (if they're claiming income) then I'm not buying (unless it's ridiculously inexpensive)
3. If I'm buying traffic I need some assurance of how much traffic they're experiencing and where it's coming from– I don't buy traffic sites unless they're a fit with what I'm already doing

Mike W.

Empireflippers.com constantly boast that they are better than flippa
because all the websites they list have verified income.
You could always buy there.

Trevor

[Dien Rice]

Originally Posted by teamplayer

Empireflippers.com constantly boast that they are better than flippa
because all the websites they list have verified income.
You could always buy there.

Thanks Trevor for mentioning http://empireflippers.com ...

I hadn't heard of them before, so I checked it out.

They have a very different model... For example, you have to pay a refundable deposit of 5% of the asking price, just to know the URL of the website. It makes sense, though, to weed out some of those who just want to find out the details to copy the website and the business model...

Of course, the 5% refundable deposit doesn't really stop those people. I guess it just puts up a little bit of a barrier...

I guess the only problem I see with them is they have very few websites for sale - only 13 are up for sale right now, by the looks of it...

However, it looks like a good place to keep an eye on, and maybe check on a regular basis...

Best wishes,

Dien

[Dien Rice]

Originally Posted by MichaelWinicki

I've used Flippa...

1. Use an escrow service
2. If they can't verify their income (if they're claiming income) then I'm not buying (unless it's ridiculously inexpensive)
3. If I'm buying traffic I need some assurance of how much traffic they're experiencing and where it's coming from– I don't buy traffic sites unless they're a fit with what I'm already doing

Thanks Mike for sharing your advice!

I'm still keeping an eye on some of these Flippa auctions... I probably will buy one sooner or later, if I can get a good one at the right price...!

I've made bids on a few of them already, but haven't won any of them yet...

Best wishes,

Dien

[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.

[Dien Rice]

Originally Posted by Ankesh

Thanks Dien.

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

Hi Ankesh,

Thanks - you're clearly an "old hand" at this!

I've bought websites before - on a very small scale - and it was a long time ago, too... So I'm planning to "jump back in" with the way things are now...

Looking through the listings, you're right - there's a lot of "garbage" there, and you have to watch out for it. There are undoubtedly some "scammers" there too. However, I also see a number of good potential opportunities - if the price is right...

Some people seem to greatly overvalue their websites, in my opinion. For example, I saw a website which said it was making $10 a month, which wanted a $5,000 minimum bid for it. There was nothing special about the domain name. If it kept making $10 a month (or $120 a year), and you bought it for $5,000, a quick calculation shows that it would take you over 41 years to make your money back! (Who knows, I might not live that long!)

Anyway, I passed on that one...

Thanks for your excellent advice, Ankesh!

I'm essentially looking for either (1) websites that would help enhance and fit in with what I'm already doing, or (2) websites (in any niche) that I can run profitably in a "semi-automated" way... By that, I mean I could run it profitably without taking too much of my time. I'd be okay with hiring freelancers to help run it (e.g. to write new articles regularly), as long as the profit is sufficient to cover that cost...

Anyway, I'm still keeping my eyes open... Thanks for the very good advice!

Best wishes,

Dien

I'm sure these sites are great, but I wish the words, "flip," "flipper," ect. would not have become accepted and popular (whether websites or real estate). They're so unprofessional.