Why you must use a Website Sales Agreement when selling your website

Posted on September 26, 2019 by ibuysites

Why You Need a Website Sales Agreement

There are advantages to acquiring existing websites. You don’t have to spend considerable time, effort and money developing a site for your business or personal purpose. However, there are also some risks involved since it’s an online transaction involving a non-physical product.

Some unscrupulous people will sell websites offering features that are either exaggerated or simply non-existent. For example, they may present an unrealistic profit margin or a list of non-existent subscribers.

So whether you’re purchasing a website privately or through a platform, you could mitigate the dangers through a sales contract.

When procuring a website, you need to have a clear and detailed record of what you’re receiving. For example, will the sale include rights to the content, both text and images? Are there any existing problems that might affect the website’s search engine ranking? These are a few of the various concerns related to a website sale.

Since you’re dealing with a transfer of digital property, a written contract is an absolute necessity. Also, you have to take into account other legal aspects like intellectual property rights and seller warranties.

Under the terms and conditions of your agreement, you need to verify what kind of website you are purchasing.

Websites are classified by the following:

Those created by developers intended to be sold or ‘flipped’ and are often monetized by ads or affiliate links
Blog, fan or information websites
Used to restore an expired domain name
Suitable to a buyer’s plan like an empty e-commerce site where the buyer can advertise his products.
Web-based application hosted on a third-party server

If the website is a full-functional and existing e-commerce site, the terms and conditions are more extensive. You have to take into account conditions like an offline relationship with suppliers.

Often, the one intending to purchase a website has a greater incentive to produce a sales agreement. Since the sale involves a digital product and not a physical one, buyer assumes most of the risks.

The Website sales contract will require the following

1) Website Sales Agreement – A Definition of terms

Selling a website involves the use of many technical terms. So to ensure that both parties understand each other, this section is used to define what a particular word means. For example, what do you know about words like, intellectual property, domain name or ISP?

2) Terms and conditions agreed upon by both seller and buyer

Generally, this section covers the intention of the parties, the applicable laws, and warranties. Also, the part discusses the specific items that are covered by the sale like website, intellectual property right, and domain name. Furthermore, you also need to set an agreed date and time as to when the transfer of ownership will take place.

3) Important details of the sale

(a) A specific description of items sold

Would you purchase a car if it doesn’t include a steering wheel or tires? Similarly, a website is also composed of several components like domain name and intellectual property rights.

For e-commerce sites, you need to ensure that other related or offline information is part of the sale. Before agreeing, ensure to include the following items:

Manuals, procedures or process accumulated in the development of the website
Ads, content, images and their related copyright
Database of current and even former customers
Subscribers list
The people working for the site like bloggers
Licenses, permits or permissions
Social media engagement

(b) Price

The section contains the agreed price, form of payment, and who will pay the taxes from the sale if any.

(c ) Date of complete transfer

You need to set a definite date as to when the buyer will have complete control of the website. If possible, the transfer of ownership and control should commence once the agreement is signed. If not, at least within the day.

4) Warranties and other future restrictions like non-compete clauses

If the seller provides some warranties, ensure to put those in writing. Also, consider inserting provisions that prevents them from setting up a similar one that will directly compete with yours.

For those unfamiliar with the sale of websites, consider enlisting the help of experts. You can seek the help contract review services companies to know more about the terms and conditions in your contract. You may also need advice with regards to any ‘hidden provisions’ the seller may include in the terms.

Website Sales Agreement – Conclusion

Purchasing a website is a bit risky, but the potential benefits are worth the gamble. However, you can place the odds in your favour by writing all your oral agreements in a contract. Such a deal is crucial because it’s the only physical proof you have of owning a digital property. Also in case of disputes it’s an essential piece of evidence. Creating one is not easy since it will require expert knowledge of the technology applicable laws. So consider asking for help from a contract consultant or lawyer.

Author’s Bio: Kerry Gibbs is a legal expert at BEB Contract and Legal Services. BEB provides small to medium-sized businesses with legal and contractual support. They offer various legal contracts and agreements including terms and conditions, service agreements, retainers, shareholder agreements, service level agreements and many more. They specialise in writing terms in plain English to help your business grow.

What You Need to Know about Buying a Website [Updated]

Posted on May 28, 2019 by ibuysites

What You Need to Know about Buying a Website

An Article by Natalie Wilson

Before you start a new blog or a new business venture with a recently created domain, you might want to consider buying one that already generates traffic.

Smart people are buying and selling websites for a living and some when launching a new business will buy an existing website in their chosen niche rather than register a new domain name. [Especially if that web domain that matches their business idea perfectly]

But buying a website does come with risk and you should always be sure of the final costs.

There are plenty of horror stories to read about, but if you’re looking for some advice on websites before you buy, here’s what you need to know:

Where Can You Buy a Website?

The short answer is mainly online, but essentially there are 2 ways to find a website to purchase, one being much easier than the other.

Use a Website Purchase Platform

Businesses such as Midascode Ltd offer their users the aid they need to buy or sell a website. This is the suggested approach as the platform can help weigh in on your purchase and offer you recommendations. It also serves as a safer option rather than purchasing privately, which can turn pear shaped pretty easily.

Useful Links:

Buying an Existing Website – The Alternative Web Start Up

Marketplace for buying and selling websites

DIY Sales & Business Broker Led Sales

Private Purchase

If you wanted a very specific domain because it includes your product, service or brand name, approaching the website directly for purchase is the ideal solution. This option does include more risk as you have to make sure you’re asking all the right questions and negotiate price on your own.

Should You Purchase an Established Website?

Depending on your circumstances and what you want to gain varies on whether or not you should buy an already known website. But it’s worth noting the following points to help you with your decision.

Do You Want to Change the Websites Topic?

If you’re looking to buy the website strictly for its name and URL you’re likely going to lose the websites current traffic.

For example, if the traffic is expecting an e-commerce store and you’ve changed it to a fitness blog they may not be interested in reading about it (so they’ll just leave the site). If you plan on doing this, make sure you’re not paying an inflated sum for the current traffic levels, but if you intend on keeping the topic of the site the same but enhance it, it might be worth investing in.

Is there an SEO Value From the Website

There are tools available online to allow you to measure the value of a website. Domain Authority is a tool you can use to measure the website history and this one of the most generic ways to measure websites current online value. There are also tools such as Majestic which can help you review the websites topical Trust Flow, which essential reviews it current backlinks. To further review the website, you can also investigate its current rankings, to help identify how it stands for current search terms. Another important check to conduct is to use a tool like the Wayback Machine to review the history of the site. Often, sites can be bought just to be sold, and you wouldn’t want to find out what you thought was a family website was an adult site up until 4 months ago.

Are You Buying it to Guide Users to Your Current Websites?

This takes a lot of assessment to find value in. If your an e-commerce website looking to generate more direct traffic you can buy URLs and lead the redirected traffic to your website. This will likely cost you more to do though, as the site you buy should have a lot of direct traffic, and you also need to be sure that the new traffic is going to be interested in what you offer.

Are Your Trying to Acquire a Mailing List?

Another reason to buy a website is to acquire its mailing list. If the site can provide statistics about their audience and mailing list, you can begin targeting these users to increase revenue or traffic to your current site. It’s worth evaluating the response rate of the mail list too, as some lists can be spammy and lack efficiency.

Some Final Notes:

Site Ownership

Make sure you confirm you are speaking and buying the site from the webmaster. Too often does money get exchanged and the new “owner” actually paid the wrong person and the website cuts them out of the website. You’ll likely have little evidence to prove you legitimately bought the website, which is another reason you should use a buy or sell website platform.

Learn About the Websites Assets

The domain isn’t the only thing you might be able to gain, as mentioned mailing lists, access to experts in technical due diligence and web developers for example may have already been bought and paid for, so these could also help the further advancement of your new acquisition.

Stability

If it is a high-value website, it’s worth digging into profit or traffic projections along with access to the websites Google Analytics so you can view the data first hand.

The Buying Process

You can scare off most hustlers with a simple phone call, so asking for as many details as possible before you pay will help legitimise the transactions. Making sure you follow the steps above will assure you that the website you are gaining is ideal for your future progression.

An Article by Natalie Wilson

Interested in Selling A Website?

Posted on January 11, 2017 by ibuysites

Do you dream of selling your blog or online business?

But not sure how to go about it? Or how to get the maximum value for it?

Then this will help…

=> How To Sell Your Website For Top Money

An awesome article by our good friend Clinton Lee

Fact is, most website valuations are based on dated and flawed thinking.

Thinking that leaves the entrepreneur out of pocket!

But knowing this will make for a much more profitable exit.

Warmly,

Barry Dunlop

Managing Director

Midascode Ltd

Selling A Website Made Easy

Doing Due Diligence on Flippa Listings

Posted on August 31, 2012 by ibuysites

There’s an interesting new development that every buyer should be aware of before even bidding for a site at Flippa. It’s a new due diligence tool. It’s completely free and you would be crazy to not spend a few minutes using this tool on any Flippa listing you’re considering bidding on.

First, some background.

Flippa has long suffered from a problem of sellers opening multiple accounts. This is in violation of the Flippa rules and creates opportunity for shill bidding. A seller could pretend to be somebody else and bid on his own auctions to keep pushing the price up. You, as a buyer, don’t know the identities of other bidders and you’ll keep increasing your bid to compete with the seller himself who strings you along to a point of his choosing before he drops out.

This is illegal, but this is the internet and if Flippa don’t know about a seller’s multiple identities, they can’t block one of those identities from bidding.

To be fair, Flippa have made some progress in this regard. If multiple accounts log in from the same IP, they flag the accounts as “possibly connected” and you can see that note on the seller’s profile page.

However, people like the admin of the Experienced-People.net forum of website buyers and sellers, argue that Flippa aren’t going far enough. He points out that as it’s sellers who pay Flippa, it’s in Flippa’s interest to allow a bit of this shill bidding particularly if they can be seen publicly to be taking actions against some accounts by banning the occasional miscreant. That protects their public reputation while allowing some shill bidding to happen that ends up enriching fraudulent sellers and, indirectly, Flippa themselves.

Buyers have no way of querying a seller’s details to see if he has multiple accounts at Flippa and is a likely candidate for shill bidding. The only information they have is when Flippa discloses on a seller’s profile that he is “possibly connected” with another account. In most cases, there isn’t any connection disclosed here.

That has all changed. The Experienced-People forum has worked out an ingenious way of detecting these fraudulent connections.

It’s a bit technical, but bear with me here. Example: A seller has several accounts in Flippa, let’s call them account A, B, C and so on. He lists sites for sale using these different accounts and uses his other accounts to bid on his own auction. There is no real public information available about the seller – no name, no phone number, no email address, no IP! But, and this is the clever bit, all those sites listed under different names may be hosted in the same hosting account and may be registered to the same person! These sites may share the same hosting IP, the same obscure name servers, the same WHOIS phone number.

That’s what the new tool does. It goes behind the scenes to connect these dots for you. You can take it for a test run here. It is completely free and we understand it will always stay free. If you need a demo of what can be done with the tool, have a look at this post on their forum. Other parties have also started using it to expose some of the scammers, shill bidders and other less than honest sellers on Flippa.

Bookmark the page, and get familiar with using it. It’s going to become a key tool in the due diligence arsenal of every buyer.

How To Verify Website Profit

Posted on October 30, 2011 by ibuysites

Is the Seller Telling The Truth about Website Profit?

verify website profit

How To Verify Website Profit:

It is not unusual for profits to be faked – so always verify website profit. For example screen shots are easily Photoshopped! Developers have tools like Firebug that fake what appears on the page itself.
Treat all seller’s claims with skepticism. If you can’t verify something then play it safe and presume it ain’t true.
Sellers often show videos or use screen sharing software so you can see – live – what’s on their screen. But even this can be faked relatively easily (by changing a small “hosts” text file!
Sellers often claim hidden perks – cash payments or benefits in kind. If they are not regular incomes that appear in the statements, can be proven and can be quantified then their value contribution is safely ignored.
Off the record “cash” income is not something that should ever be assumed as part of the profit.
When approximations, estimations or projections need to be made, make them on the conservative side in your favor.
Learn to distinguish the site-facts from the seller’s opinions.
Use a PPC spying program to see if the traffic was possibly paid for rather than the free traffic claimed.
Consistency: I made $500 last month is not the same as I make $500 a month. Too often sellers try to project a particular month’s profit as a steady regular income.
Check the figures behind “average income”. Sellers choose a favorable time frame for averages. Compute what that the average would be over six months, a year and three years.
Don’t assume scalability. A site spending $50 in Adwords Pay Per Click per month and making a profit of $100 won’t automatically make $100,000 if the ad spend increases to $50,000 (even if Adwords can really send that much of traffic).

To Verify Website Profit Contact our Website Due Diligence Team

It is vital that the investor is confident that all of the above information is provided and accurate. This is a challenge that MidasCode Ltd and our team of experts are here to help you with.

To contact our Website Due Diligence Team send us a message.

Flippa Security Possibly Compromised, change your password

Posted on July 20, 2010 by ibuysites

Reports are circulating of a security breach at Flippa and screenshots have been posted online of what their admin interface looks like.

The known hacker (and possibly some unknown ones) may have had access to all Flippa accounts, private messages, bids, watchlists and other user controlled functions.

Flippa has neither accepted nor denied the allegations.

It would be a prudent move to change your Flippa account password. If you’ve ever given Flippa access to take a pdf of your Google Analytics stats, it may be worth changing the password of your GA account as well. If you’ve used Flippa’s integration with the escrow.com service … you get the picture.

As Flippa and Sitepoint have common logins, this may apply to you even if you don’t use Flippa, but have an account at the Sitepoint forums.

Flippa Announces Major Change – Addition Of Escrow Service

Posted on January 28, 2010 by ibuysites

I don’t believe anyone has blogged about this yet.

Details are patchy at the moment, but Flippa’s General Manager Dave Slutzkin has announced that Flippa is adding an escrow service to their site. It’s in partnership with escrow.com (well known, but seriously flawed) and is likely to be an optional service buyers and sellers can use at Flippa.

In the past there’ve been instances where Flippa wasn’t paid the “success fee” for a site selling in their marketplace. The advantage with having an in-house escrow is that Flippa will now know when a site sold in the marketplace has changed hands (whether on not the WHOIS is modified). Honest buyers and sellers who aren’t looking to cheat Flippa out of their success fee should have no issues with Flippa knowing the sale completion date.

It’s not yet known whether the pricing will be fair i.e. users being charged for only the service provided: escrow on the domain. It may well follow escrow.com’s current pricing: price based on the entire value of the site even though it’s only the domain that’s getting escrow protection.

All You Wanted To Know About Website Buying & Selling

Posted on January 12, 2010 by ibuysites

Here’s a headsup: People wanting to discuss matters relating to the buying and selling of websites now have a new forum where they can chat with like minded individuals.

The quality of the chat is extremely high and though the forum is only a week old today, it boasts some of the most respected members from places like Sitepoint and elsewhere who advise on the subject. Already signed up are brokers, accountants and lawyers who deal with matters like Accountancy Due Diligence and Contracts of Sale, buyers and sellers. Flippa is there asking questions and getting feedback on how they can improve their service.

It’s a place where you can find out about the best places to buy a site, what scams to watch out for, what’s a fair price, how to perform due diligence, the best places to list a site for sale, how the pros make money from site holding and site flipping …and much more. Head on over and pose them your most difficult question.

If you interested in any aspect of website buying or selling – you need to be there. Go to the Experienced People forum right now. If yours is not an internet business, the related site for selling a business is this one.

Five Scary Things You Didn’t Know About Escrow.com

Posted on December 15, 2009 by ibuysites

When buying or selling a domain you are often dealing with a party you don’t know. Do you remit a large sum of money to them and trust them to transfer the domain to you? Probably not. But then again, they don’t know you either, so they can’t transfer the domain to you first in the hope that you will indeed keep your promise to pay them in full.

That’s where escrow companies come in.

An escrow company will take the full payment from the buyer and hold it till the seller transfers the goods. Once the buyer confirms that he’s received the goods the escrow company releases the funds to the seller. Should the buyer reject the goods, the escrow waits for the seller to confirm receipt back before they refund the payment to the buyer. So everyone’s safe.

But it’s important to choose a good, trusted escrow company to handle what is often a large sum of money. Who do you go to for that? The most well known name is escrow.com. Most experts in website buying and selling swear by escrow.com and they do so with the experience of many transactions behind them. But today I’m going to tell you five secrets that you really should know before you deal with them.

Five Things That You Did Not Know About Escrow.com and Which Should Scare You

1. There is no company called escrow.com. The company you are dealing with is IES that rents/leases or has some other arrangement involving the escrow.com domain (I don’t know what it is and you likely don’t either). That’s not a reason to distrust them but you need to know who you are dealing with. Should IES go bust sometime – no company is immune from the laws of finance – the escrow.com name will likely continue and many buyers and sellers will likely be unaware that anything has changed even though they may be dealing with a brand new company with no history! They’ll assume it’s the good, old escrow company they’ve always dealt with. On the escrow.com website, you’ll find bold claims about “services provided by escrow.com“. They flash “escrow.com” all over the site. Even their postal address is “escrow.com” (no mention of IES). You need to go to the small print to realise that it’s IES you’re dealing with and, in their own words, they are only “one of the operating subsidiaries of Escrow.com”.

Disclaimer: I’m not suggesting anything about IES’s current financial position. They may be rock solid for all I know. And do bear in mind that they are heavily regulated (more about that later) so they don’t do a runner with your money.

But “they” are not escrow.com.

2. Escrow.com/IES doesn’t provide an escrow service for websites: Seriously! It never ceases to amaze me how few people know this. Or realise the huge risk involved in putting website transactions through this company. IES has four categories: Motor Vehicle | Domain Name | General Merchandise | Services.

The closest you have to websites is “Domain Name” and people happily choose that as the closest match and think all is hunky dory. It’s not!

Risks for Buyer: You can end up getting just the domain name and none of the files, templates, designs, databases or anything else that is contained in the website you’re buying and, as far as IES is concerned, they’ll release the funds to the seller on the sole grounds that he has transferred the domain control to you.
Risks for Seller: You can transfer all the copyright, other rights, programs, files etc., to the ownership of the buyer and the buyer can then demand IES give him a refund because he’s changed his mind about taking control of the domain.

3. IES/escrow.com don’t give a fig leaf about your contract. In the purchase of a website the buyer and seller often negotiate terms and draw up a Sales Contract. It may say that certain conditions need to be met and that the buyer/seller can pull out of the transaction if there is a material change. Example: You agree with the seller that if his PR9 site suddenly drops to a PR4 then the deal is off. You send your funds to IES for them to hold during the 10 day “inspection period”. The seller changes the WHOIS for the site and sends you the password to take control of the domain. But on the very first day you find that the PR has dropped (or there is something else drastically wrong with the site and it doesn’t match what the seller described). Tough! As far as escrow.com/IES’s terms are concerned your agreement has no value. The seller gave you control of the site and if he wants to complete the transaction then IES is just going to release the funds to him. The contract entered into by the Buyer and Seller is a carefully constructed document designed to protect each party’s interest. IES won’t even look at that contract. They go by their own terms and conditions and it may or may not be in your favour.

To be fair, you can try raising a dispute or arguing the terms with IES, but there’s no guarantee you’ll succeed, it’s entirely up to them.

4. Many of the “experts” who recommend escrow.com are doing so because they get a commission. Escrow.com is one of the few (if not the only) escrow companies that has an affiliate program. That they are paying people to recommend them is not reason enough to shun their services. But be aware that any recommendation of their service may be driven by expectations of commission rather than a desire to help you.

5. Escow.com is regulated by an authority on another planet. Most experts agree that while the banks took a lot of liberties it was ultimately the regulators who failed in controlling the financial institutions and were responsible for the credit crunch of 2008.

But there is no regulator on this planet quite like the Commissioner in California. He sounds like a cross between Saddam Hussein, Michael Jackson and Imelda Marcos.

He’s power mad and a bit crazy. Nobody – anywhere in the world – can do this business with anyone based in California unless they pay the Californian Commissioner huge amounts of money, bow to his authority, promise to jump when he says jump and sign up to lots of nonsense. But the madness doesn’t end there. If an escrow company in Syndey or Singapore or Sierra Leone decides they can’t be bothered with some jobsworth in California, they need to be aware that he has banned anyone, anywhere in the world, from saying anything critical about him. I promise, I’m not making this up!

That’s just the start. If you read the California Financial Code (div 6, 17000-17305) there’s some pretty serious stuff in there that should dissuade anybody from buying or selling a site if the party they are dealing with is California based. But if the escrow company is registered there it’s even more serious. You will almost certainly lose should a dispute arise. In fact, if they file a court case against you in California, they don’t even need to inform you of the action. In can be all decided in your absence.

Read the full story of the California Risk here.

So even if IES is a very trustworthy company, has a strong balance sheet and great customer service, the fact that they are based in California and signed up to the California Financial Code is reason enough to go look elsewhere for your escrow needs.

Reliable escrow companies that proudly declare they are not registered in California:

Moniker:

Moniker is an ICANN Accredited Registrar and the only company with a special domain escrow account at its registrar to safely hold domains and protect both buyer and seller of domain related transactions. (not registered in California… for the moment)

iEscrow:

I-Escrow, Inc. is Licensed by the Washington Department of Financial Institutions (No. 540-EA-42257) and adheres to its strict regulations, as well as the ordinances put forth by the Revised Code of Washington.

SEDO, escroweurope, Escrow Europa (recommended by eBay) etc., are other alternatives.

One Of My Best Secrets On Finding A Good Website To Buy

Posted on December 4, 2009 by ibuysites

shhh Shhh! I’ve got a killer tip for those interested in finding good sites to buy.

Send the owner an email.

No, no, it’s not about searching Google for sites saying “copyright 2002” to identify abandoned sites and email the owner. Nor does my tip involve crawling through DMOZ listed sites to see which ones look dated. The first is a very hit and miss affair. The second is far too time consuming as well as hit and miss.

It’s where you look and how you time it!

But first, the example: Today I bought a $35K site. It didn’t come through any of the methods described above. It came through a very simple route – something any of you could duplicate (but probably don’t).

And I Got It At Half Price

History: I keep track of sites that I have been interested in but didn’t end up buying. And I revisit those sites after a reasonable lapse of time.

One of those sites listed in Sitepoint a long time ago went for over $60K. I thought the bidding was too high and there may have even been some shill bidding involved. So I took a back seat. Today, over a year from when that site “sold”, I find the WHOIS hasn’t changed, the contact email address for that site hasn’t changed and the appearance of the site hasn’t changed.

Conclusion: The purchase didn’t go ahead (surprise, surprise) and the owner didn’t get to do much with the site either.

So I emailed him out of the blue. Now, these emails don’t normally work. At least they don’t work when people email me. They often get my email address from WHOIS and write to say they want to buy xyz site of mine. Usually they are lowballers looking to pick up something on the dirt cheap. They first express interest and it’s only after a few emails back and forth that they disclose their budget is a paltry $100. I’ve learnt to ignore those emails. And other webmasters do too.

But this email was different because of timing. I worded my email carefully and, importantly, offered him a decent price. I quoted $35K for a quick deal via escrow. Voila! It worked!

Why Did It Work?

What was different was that I had identified someone who was motivated to sell and had been motivated for a long time. Further, he may have been disillusioned with the sale process as he spent a lot of time trying to sell his site and it didn’t work. So when a half decent offer came up, he grabbed it.

Can You Do It Too?

Yes, you can. Let me give you an example. webmasters.org came up for sale here. It raised quite a lot of interest because of the domain name. And it sold for $50K about 15 months ago. Apparently. In the thread you’ll find the owner signed his replies with the name “Chad”. If you do a WHOIS on that domain today, it’s owned by a Chad and the email address is chad@xxxx. Coincidence? Hardly likely.

The site has dropped in PR, from a PR7 to a PR5 – a good reason why there is extra motivation for the owner to sell and why he may be even more open to a lower price. This isn’t a recommendation to go buy that site but to demonstrate that sites where the owner expressed interest in selling, went to the trouble of listing and actually sold… may not be sold. And he may still be interested in selling, even if it’s at a lower price! It won’t always work, but the success rate is a hundred times better than for a completely blind approach.

Have you got website listings you’ve ever bookmarked or added to your shortlist? Have you tried re-visting those sites or checking on their progress? Are you doing it with just Flippa listed sites or all the main site selling forums?

Does it take a bit of work? Sure. Is it worth a shot? You tell me.

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