Top Five Website Selling Scams

Posted on September 11, 2009 by midascode

Top Five Website Seller Scams

You’ve seen your dream site, all the figures add up, the price looks good and the transaction is going through escrow. Nothing to worry about, right?

website scammers

STOP!

Website Selling Scams To Avoid!

Take a step back and have another look. Having experienced several
hundred transactions and dealt with virtually thousands of sellers, we’ve
learnt that what looks black and white may appear a distinct grey under the
due diligence microscope. The top scams we see by website sellers are:

1. Inflated earnings: The screenshots themselves could be faked. And,
let’s be honest, sellers can’t go giving out the logins and password to
their earning accounts. They may offer the closest alternative: access via a
screen sharing software. In theory, you both install the software and you can see
what’s on his screen. He navigates and clicks based on your phone
instructions.

But, beware, that’s not infallible. There are javascript tricks and
manipulated host files that could make you think you’re on Google’s
Adsense stats page when in fact you’re not! Even if he’s given you direct
access to his affiliate account, YPN stats or PaypalÂ login, the
earnings may not be what they seem. The figures can be inflated in a
multitude of ways but the two primary routes are to over state what’s coming
in and to understate what’s going out. In examples, revenue could be
inclusive of money made on other sites and the cost of all the advertising
required to make that revenue could have been swept under the carpet.

2. Inflated traffic: It’s often the case that buyers see a site
they believe is under-monetised and base their value of the site on how
profitable they think they can make it using their own monetising
strategies. This usually relies substantially on their assessment of the
traffic. But how reliable are those figures?

The simpleton seller may repeatedly hit the site from his own PC, or set
up a script to do that for him. Examining the traffic stats and the IPs of
the most frequent visitors blows this trick out of the server logs. But what
if there really are millions of visitors from different IPs?

Visitors can be bought. There are numerous programs that sell millions of
“visitors” for a few dollars. However, many of them send just bots or
visitors of very low quality (perhaps by loading your page as a pop-up on
some heavy traffic sites). The wary buyer satisfies himself not just of the
quantity of traffic but also the quality. Here are some neat tips and ideas on
traffic logs and getting useful information out of them.

3. Hidden time costs: Professional businesses account properly for
all time used in the managing and running of the business. If the
owner/manager puts in some hours, the cost of his labour is deducted from
the profits. Most webmasters selling sites ignore this basic accounting rule
and as a result their profit figures are over-stated.

The principle is simple: Profit is reward for capital and risk. Salary is
the reward for time spent. You cannot arrive at a profit figure unless you
first deduct the notional cost of salaries (even if those salaries haven’t
actually been paid out). It’s factors like value of seller’s time and
depreciation that are the main reasons why companies’ final accounts are
recalculated (“adjusted”) for the purpose of a business sale.

Always recalculate the profit based on your careful estimation of the
level of skill and the hours you’d need to employ to replace the owners.
These tools and spreadsheets may be handy.

4. Fake Page Rank: Fortunately, most buyers now know how to check
for fake Page Rank. However, what they use for their investigation are “fake
PR checking tools”. They omit one of the most important checks: archive.org.
Yes, the Wayback Machine is a powerful tool when relying on the PR of a
site’s pages to decide the site’s value and, let’s face it, some of us are
influenced by Page Rank when buying sites.

How does archive.org help? It doesn’t give you PR, it doesn’t tell you
the past PR of any page. What it does show is how a site used to look in the
past. If the last cache of the site is considerably different it should ring
alarm bells. Large organisations like government bodies, quangoes,
educational institutions, companies etc., often own multiple websites.
Sometimes they forget to renew a domain registration and domainers quick on
their feet snap up these domains. The original content is promptly replaced
with some new material and it’s flogged off as a “quality site”.

Risk: Buying a site based on a dropped domain invites legal action.
There’ve been numerous cases where the previous owners claimed the domain
back and … won. But that’s not the only risk.

Update 2016 – Google Confirm Page Rank is no more!

Unfortunately some sellers are still claiming Page Rank or a variant of it!

5. Dropped domains: Dropped domains that have been quickly
re-registered by opportunistic domain vultures still show PR in the Google
toolbar. However, Google is aware that the domain was dropped and often
wipes the slate clean on both PR and backlinks – treating the site as a
completely new one. As PR updates don’t happen on a daily basis, the new
site owner may end up putting a lot of effort into his site only to find
that at the next update PR reverts to 0. Further, he usually also loses all
linkback credibility as the original links were made for the previous
content and purpose of the site.

More by this author on buying and selling businesses

Is The Internet The New Property Market?

Posted on January 14, 2009 by midascode

As someone who bought a house a few years ago and has since watched it drop in value faster than an athlete who just lost an leg, I am well aware that the property market is really struggling, and is set to continue to do so.

house market crash

So this begs the question: If property is no longer the solid investment that it used to be, could websites be the new boys in town?

There are of course, many factors at play, but I was recently looking at an apartment in a tourist area in Europe, it cost $200,000

I am told that I could rent that out and if I do it right, I could cover my mortgage.

In other words, I could break even.

Now, on the other hand, I could purchase a large entertainment website which also can be bought for $200,000

However, this site is making $7,000 profit per month.

Let’s assume the mortgage on the apartment is $700 per month, and the re-payments to finance the website are $1,000 per month, that is still a $6,000 per month advantage to the website.

I would love your opinions on this, considering the current climate, if you had to choose, would you rather invest your money into property, or into a website?

Midascode

A Website – A Great Christmas Gift?

Posted on December 11, 2008 by midascode

When you think Christmas gifts, you don’t usually think of websites… but we are entering 2009 and times are changing.

Today we ask the question, would a website make a great gift this Christmas?

christmas website

The short answer is YES, but, it has to be for a certain type of person.

A good understanding of the Internet is a plus, and the person should have an hour or so of free time per day to work on it.

Also, you should match the topic of the website to their passion.

So, for example, if they love football, you can buy them a fansite of their favourite football team.

How To Buy The Site

There are loads of articles on this site to show you how to buy a website, but the first step is to set a max budget. e.g $500

Then, you wanna head over to a site like Sitepoint.com and use their marketplace to find your site.

You can use the search feature to search for your chosen topics, or you can post a “Want To Buy” post which will request that type of site.

Summary

Buying a website as a gift can be a life changing gift, it can give them a whole heap of new opportunities, and potentially set them up with a monthly income for life.

That said, there are some technical aspects to the process, so consult with an expert first.

Midascode

6 Kickass Tools For Website Buyers & Sellers

Posted on October 20, 2008 by midascode

They say a good workman never blames his tools, but having great tools on the Internet can save you a lot of time and hassle. Today we are going to look at 6 kickass tools that will help you find websites to buy, and research the quality of a website.

Hub Finder

Hubs are known as authority sites by the search engines. Owning one of these sites can be hugely valuable. But how do you find them?

Simple, use this hub finder tool

Trend Finder

Here is a common scenario. You buy a website because it made $2k per month in the past three months, but now it seems to be making only $100 per month. Why is this?

A common reason is because there are trends in any market, and it is best to be able to detect those trends.

You can use this trend finding tool by Google.

As an example, I used the search term “halloween gifts” and it gave the following trend patterns:

halloween gifts

Duplicate Text Checker

Are you looking to buy a website with a lot of content on it?

If so, it is vital that you know whether the content was created, or stolen from another site.

Copyscape is a tool that will let you know whether the site owner has been a bit naughty.

Creative Commons Content Source

Have you purchased a website but it looks kinda plain and boring?

What better way to spice it up than with some images and perhaps a video?!?

However, you don’t have the money to create your own, so instead, why not try using content that is free to use under the creative commons license?

Here is an amazing resource for creative commons content.

Source Viewer

Have you ever wondered how Google views a website?

This tool will show you.

This is vital to check for spam. Especially if you are buying a WordPress blog, as even the authority sites can get hacked.

URL Research

If you are buying a website, the last thing you want to do is spend the next 6 months fixing problems with the code.

This tool will check the site and give detailed information on a number of key areas.

Will The Economic Crisis Affect Website Prices?

Posted on October 10, 2008 by midascode

Today we ask the question: With all the economic and financial problems around the world, what affect will this have on the prices of websites and web businesses being sold?

crisis

Will the credit crunch mean that people start selling their websites to raise some money?

Will investors see websites as a safer investment than the stock market?

Put your thoughts in the comments below.

Midascode

Buying and Selling Fansites 101

Posted on September 25, 2008 by midascode

The fansite can be an attractive investment, afterall, getting paid to run a website based around one of your favourite rock bands, tv shows, celebrities etc sounds like a dream world.

However, the reality is often quite different, and if you are not careful, you could be left heavily out of pocket.

fan

So let’s get straight to the single biggest danger when buying a fansite:

Today’s news could be tomorrow’s chip wrappers.

Or in plain English, that huge boyband that everyone is talking about, may not even be together in 2 years time.

This means that fansites can be a ticking time-bomb investment… you are not only taking a gamble on the website itself, buy you are taking a gamble on the continued fame/popularity of the tv show, or celebrity in question.

Which leads us to the second major issue when buying fansites…

The Expiry Date

Unlike most other sites, fansites have an invisible expiry date, after this point the traffic will drop to a trickle, and so will the value of the site.

Even huge tv shows like LOST carry an expiry date, afterall, there is going to only be 2 more seasons, so you have a max of three years to make your money and get out… but how can you sell the site when there are no more seasons left?

The result is that you are left with a nostalgia website, and trust me, there is not much money in those. I would much rather have a website on a hot-topic.

The Lawsuit

Owning a fansite can bring a whole host of legal issues… infact, it can be a real minefield.

For a start, today’s celebrities trademark their name, they also have copyright over all logos, images, art work, lyrics and videos. So simply by having the celebs name in your URL, you could be in legal trouble.

If you are lucky, the management team will realise that you are promoting their artist, and they will leave it at that, at worst, you will be taken to court for damages and your site will be shutdown.

Summary

Fansites can be a great way to make money from a subject you are passionate about, but you must factor in the above when valuing a potential investment, and always look for the REAL reason the site is being sold.

Do You Have The Time and Resources To Buy a Website?

Posted on September 4, 2008 by midascode

Buying websites is a great way to own your very own successful web business, it is also a very fast way of doing it… however, there is one factor that a lot of people forget, and if you are not careful, it could happen to you to.

Websites are businesses, and therefore require time, effort and resources to maintain.

This sounds obvious, but many people purchase websites with the dream of sitting on a beach whilst their website keeps pumping out money.

Yes, there are a few types of websites that can be automated, but they are few and far between, and even automated sites still require some effort to improve them.

For the other 99.99% of the sites on the Internet, you will need to put aside time each day to run the site. This could be anything from answering emails, being available during server or technical issues, adding new content, creating ad deals etc…

What’s more, unless you are experienced in all of these areas, it may require a LOT of time to complete these tasks.

Of course, you could outsource and hire employees etc… but even employees need managing, and don’t forget that they can eat into your profits.

Our advice when buying a website is to ask the owner for a list of tasks that are required on a monthly basis, and a rough estimate of the time taken for each one… once you have this list, add up all the time and then double it, for a more realistic estimation. If the result is more time than you can spare, then avoid purchasing it.

Remember, what may take 5 minutes for the current owner, may take 50 minutes for you.

An area where I often see this is with blog sales. Often the owners say things like “just 5 minutes per day is required for a new post”.

The reality of course is much higher.

A blog post of any sort of quality is going to take at least 20 minutes, and then you have the process of coming up with the idea for the blog post, which for some people can be a very lengthy process.

So be warned, running websites is a time-vampire, and if you don’t treat it like a real business, it will likely fail.

Midascode

Where To Find Good Websites For Sale

Posted on August 21, 2008 by midascode

As regular website buyers know, finding good sites at a fair price is extremely hard work. Here is a unique way of getting inside information on websites available for sale and catching them before they come up for auction.

When webmasters run their sites through the awesome website valuation report at ebizvaluations, they have the option of disclosing contact details if they wish to be contacted by buyers.

Want to see the latest listings?

Here they are

Midascode

Finally, The Ultimate Website Valuation Guide & Tools

Posted on July 30, 2008 by midascode

The single question that we get asked the most here at Midascode is “How do I value my website?”, it is a question that had no simple answer, and often it would take a 500+ word reply just to cover the basics.

We all secretly longed for a solution, and authorative, definitive answer that the website buying and selling industry could use as it’s very own declaration of indepence-esque guide, we waited, and we waited, and we gave out snippets of information to keep the dogs at bay.

Well, I can happily announce that our prayers have been answered, an expert has taken up the challenge, and not only achieved the desired result, but grealty exceeded it.

Now, before your spam radar starts spinning, I should point out that this was not done by one of our team, In fact, we are not connected to this at all.

It was actually developed by a guy named Clinton Lee, and you can read the full guide over at Sitepoint.

The guide, dubbed ‘The Ultimate Website Valuation Guide’ is 6-pages long, and covers every main aspect of valuing a website.

Many myths are debunked, many records are set straight… and the upshot is that finally, the website buying and selling industry has a guide, a bible, a series of guidelines etched into stone for us all to benefit from.

So how can this valuation guide benefit you?

Quite simply, it can prevent you from being ripped-off. It can also ensure that you don’t sell for less than your site’s actual value. It can save you money, as you may no longer need to go to an “expert” who will charge you for 38-pages of jargon.

Website Valuation Tool

If reading a 6-page comprehensive guide is not your thing, fortunately there is a new valuation tool that takes all those 6-pages and crams them into one shiny, new tool. What’s more, this tool is free, and for the first time EVER, it is accurate.

But wait! I hear you cry, there are already numerous free site valuation tools on the market.

No there are not!

There are site valuation gimmicks, designed to inflate your ego and trick you into linking back to them. These tools are for fools, and they are severly damaging and confusing in an already noisy industry.

In fact, I decided to test out this new tool on my personal blog… the tool asked a lot of sensible questions, such as:

Domain name,

Monthly Profit,

Cost to maintain,

Expertese required to run it,

& a lot more…

When it finished, I hit submit, and got my valuation… and you know what, for the first time ever, I found myself nodding in agreement.

Actually, it was a little lower than I had hoped, but I couldn’t disagree with the valuation at all. It seemed to know the true valuation better than I myself did.

So today is the day that the website buying and selling industry can breathe a sigh of relief… the weight has been taken off our shoulders, there is now in my opinion a definitive overview of the site valuation procedure, and hopefully the industry will use it and we can all benefit from it for years to come.

That said, it is more than likely people will stick with the stupid gimmick tools, and continue to pull valuations out of thin air… but hey, at least now we have an alternative.

Thanks Clinton for boldly going where no man has gone before, this is one giant step for Internet businesses, one giant leap for the site buying and selling industry.

Midascode

Can Buying Websites Help Recession Proof Your Life?

Posted on July 21, 2008 by midascode

Everyone seems to think that my lifestyle and income has been hit hard with the current recession… but truth be told, if anything it is booming.

I don’t know the economical reasons, but a lot of people tell me they now use the Internet to find deals, as they need to save those extra pennies.

In fact, the only website owners I know of who are struggling, are those in the real estate industry.

So this begs the question… can owning websites be a useful acquisition during the recession?

I believe it can do.

More specifically, I think you should spread your investments around, and websites should be just one of your portfolio.

That said, if you only have the funds for one or two investments, then I would strongly consider websites.

Afterall, most websites require almost no running costs, so when times are hard, you are not paying rent, staff, bills etc…

They can often be automated, so they won’t use up a big chunk of your time.

Unlike stocks and shares, you can start earning from websites from day one, so it may be that extra cash required to get you through the months ahead.

All in all I think buying a website would be a great investment, and there has never been a better time, afterall, many people are selling their sites right now… which I think is a huge mistake, but nontheless, it is happening, and that means there are some bargains to be found.

If you want to know more, contac us via the form below.

Midascode – Buy & Sell Websites Blog

Websites For Sale | Sell My Website | Sell A Website | Sell Domain Names

Author: midascode

Top Five Website Selling Scams

Top Five Website Seller Scams

STOP!

Website Selling Scams To Avoid!

Is The Internet The New Property Market?

A Website – A Great Christmas Gift?

How To Buy The Site

Summary

6 Kickass Tools For Website Buyers & Sellers

Hub Finder

Trend Finder

Duplicate Text Checker

Creative Commons Content Source

Source Viewer

URL Research

Will The Economic Crisis Affect Website Prices?

Buying and Selling Fansites 101

Today’s news could be tomorrow’s chip wrappers.

The Expiry Date

The Lawsuit

Summary

Do You Have The Time and Resources To Buy a Website?

Where To Find Good Websites For Sale

Finally, The Ultimate Website Valuation Guide & Tools

So how can this valuation guide benefit you?

Website Valuation Tool

Can Buying Websites Help Recession Proof Your Life?