Buying a Website? How to Stay Away from Shady Marketplace Listings

I am a Flippa member and also a member on DigitalPoint Marketplace… and for some reasons, I no longer trust the income claims on most of the website for sale listings. Why?

Most of them are very much misleading! Most of them are almost scammy, to be honest with you. While I trust Flippa more than DigitalPoint, I still find many listings hugely questionable.

How to know? It’s simple – if it seems too good to be true for you, then it most-probably IS too good to be true.

A case study

An acquaintance of mine tracka a listing he is interested in. It was a tech blog. The BIN is $2,500. Did you know the income claim? $800/month. My acquaintance asked me what I think about the listing, and I immediately said to him it’s a potentially scammy listing. How so?

Selling a $800/month blog at 3 times monthly income is crazy; and blog owners know that it’s notoriously difficult to monetize a blog. To add, the listing owner claimed that the income is mostly AdSense and partly reviews.

I do know reviews can deliver hundreds of dollar a month for a blog, but AdSense? It’s not that simple, especially for a niche with too much competition like tech-related niches. The asking price should be 30-50 times the monthly income if it’s largely AdSense income, in my opinion.

The blog was actually a good one: Traffic is almost 1,000 visitors/day. I DO believe that a 30,000 visitors/month can make $800/month, but why 3 x monthly income asking price? Fishy.

Need money fast? Probably. But ANYBODY can claim they need money fast to justify the low asking price.

My assumptions:

#1: The listing owner lies about the income to get a quick sale;

#2: The listing owner uses dirty tricks to boost income (e.g. AdSense arbitrage tactics – it’s not explicitly illegal, but Google has a track record of shutting down accounts doing that… so…

#3: The listing owner DOES needs money fast.

#4: The listing owner doesn’t really know how to price a blog for sale.

Who knows about the truth behind the blog sale, but it ended up unsold anyway – so, buyers are getting smarter, but novice buyers are just being lucky, not getting tricked into believing that such offer available.

Case study #2

I saw some listings with huge, illogical asking prices. These kinds of listings were allegedly considered as “traffic” and “branding” kind of listing.

The websites listed were not meant to be sold – unless someone is ignorant enough to buy them at the asking price; the listing serves as a marketing gig.

Paying less than $50, the insanely high asking price will get the listing plenty of comments – “wow – good luck with the sale!” “you are stupid – who would want to buy that?!” “this is crazy!”… all in all, such listings drive plenty of interest on them – which is great: The listed websites will get visitors – those who want to see how the site is doing; people will potentially remember the URL and website name – thanks to the very high asking price: Branding in action.

Obviously, you should stay away from such listings – they are not priced for sale 🙂

Takeaway

I have viewed hundreds of listings during my webpreneurial career; I have trained eyes to detect potentially scammy listings; however, I still need to learn – a lot. Tricky website sellers are getting more creative in making sure their websites get the best spotlight – photoshopped reports, misleading claims, etc.

With that being said, I tend to look for acquiring websites which have no income – this way, fake income report issue is automatically eliminated; even if the website has claimed income, I never really consider the reported income – if the site is worth taking even if it actually has no income, I’ll buy it, anyway.

If you insist on buying websites with income, you need to learn how to analyze a website’s traffic and income to identify potential issues. You might want to ask for a way to verify the income – e.g. getting temporary access to reports. Better yet, you might want to hire a broker with track record – for a fee, you will be able to acquire a legitimate website.

So, good luck in analyzing website for sale listings!

Photo credit: lisbokt via photopin cc