When you buy a car there is a set procedure, a title, and well-known processes for doing a background check on both the car and its seller. When you buy a house the same is true and in the end you get a legal title to the property. Buying a website is different, there is no regular procedure, no required documentation, and no ownership title. Falsifying information in the virtual world is common and can be hard to detect if you don’t know what tools to use.
Along with validating that what you are buying meets the expectations the seller has set, transferring the money, the domain name, the website, and other virtual assets can be confusing. Many online transaction services will often do little to help you as the buyer in the event the website or domain is never transferred to your account. As a seller it is critical that you don’t transfer your asset to a buyer only to have the money refunded or never received at all.
In this article you will learn how to validate the claims that a seller makes about a website’s performance and how to use a secure transactional provider that will make sure the seller doesn’t get your money until you have secured the domain name and website. As a seller you will learn how to make sure you are doing business with someone you can trust and using a system that can make sure the money is secured before transferring your site. By understanding the tools available for researching websites and transferring virtual goods online you can keep yourself safe in every transaction you make.
Buying Websites Safely
The first step in Buying a website is validating the information that the seller is making about their site. Flippa does a great job of organizing basic stats about a site and there are a few claims that are relatively easy to validate yourself like; traffic, search engine rankings, and revenue. You can follow the five steps below to quickly and easily validate the claims a seller is making and ensure that your transaction is completely secure:
1. Basic Traffic Validation: you can use Compete.com to get a rough estimate of the traffic that a website receives. It’s important to understand that Compete only provides an estimate and it should not be used as an indicator of the exact level of traffic a site receives. If a Seller claims their site gets 50,000 visitors but Compete shows they only receive around 300 visitors/month this could be a warning sign. Also if Compete doesn’t have a record of the site this could mean that it’s getting a very small level of traffic. Don’t go overboard with this but do use it as an initial gauge of the traffic a website might be receiving. Of course this should be considered on top of Google Analytics data, which should be presented with every sale where significant traffic is claimed.
2. Search Engine Validation: this is an easy one to validate. If a seller is claiming that they are ranked well for specific terms use a tool like SEMRush or RankChecker to verify if they really do rank as well as they say they do.
3. Basic Revenue Validation: if a seller is claiming revenue for their site they should be able to provide proof. When you don’t see proof of revenue on a listing where revenue is claimed this should be a warning sign and you should definitely reach-out to the seller to post revenue stats. Once the stats are posted make sure they are from a legitimate site and look for ways in which the images could have been doctored. If you’re buying anything for more than a few hundred dollars you should connect with the seller through Skype and have them setup a screenshare to make 100% sure that the screenshots they sent-over match the revenue they claim.
4. Send A Sales Contract to the Seller: anyone that is selling an asset should be more than happy to complete a sales contract. Since these contracts protect both the buyer and the seller this is also a benefit to them. If a seller is hesitant to complete a sales contract this should be a warning sign.
5. Always use an Escrow service like Escrow.com: when buying virtual assets it is critical to use an escrow service. Escrow.com is one of the most reliable escrow services on the planet and will ensure that the seller doesn’t get your money until you have validated that the website and the domain name have been successfully received. You can also specify an inspection period, which can be very useful to determine if the traffic/revenue stats that the seller claimed were indeed true since you’ll be able to see this for yourself.
Selling Websites Safely
When you are selling a website it is critical to make sure that you find a buyer who your trust and use a transaction system built for the transfer of digital assets. There are three steps you can take to ensure that your website sales are as safe and secure as possible.
1. Send a Sales Contract to the Buyer: one of the easiest ways to make sure that you are protected in a sales transaction is with a simple sales contract. This is also a great test of the trustworthiness of the buyer since this contract protects both of you. If the buyer is hesitant to complete this contract then you might not be doing business with someone you can trust.
2. Always use an Escrow Service like Escrow.com: when selling virtual assets it is critical to use an escrow service. Escrow.com is one of the most reliable escrow services on the planet and will ensure that the buyer doesn’t receive the domain name and website without first having the funds secured. Escrow.com serves as an intermediary by accepting payment from the buyer and holding this payment until you have transferred the website and domain name. Escrow.com will make sure the funds are completely secured before telling you it is safe to make the transfer.
3. Avoid Buyers trying to make a deal with you outside of a Trusted Marketplace like Flippa: some buyers will try to get your email address and complete the transaction outside of a marketplace like Flippa. This is a general warning sign that the buyer is someone who is looking to break the rules, which isn’t a great way to build trust. You want to transact with a buyer you can trust and if they’re willing to break the basic rules of a marketplace how can you trust that they will be a good person to do business with?
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August 24, 2011 at 7:23 am
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Good Post
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August 24, 2011 at 8:43 am
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Good info Morgan, thanks!
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August 24, 2011 at 2:36 pm
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I have always wonder how to buy a website. Maybe you can follow up with another post on the technical aspect of implementing the website on your own server on hosting account. What are the steps and tools you use to successfully relaunch the purchased website.
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August 24, 2011 at 3:33 pm
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This is a great resource on basic information for buying or selling a website.
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August 24, 2011 at 4:02 pm
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Good post. Maybe a sample sales contract would be another interesting post.
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August 24, 2011 at 6:48 pm
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Morgan:
This is without a doubt One of the BEST posts you’ve ever done!!!
Great job!
Scott
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August 24, 2011 at 8:01 pm
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My country does not accept escrow.com service, how about this?
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August 25, 2011 at 9:03 am
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This is excellent advice, I know personally because I have used escrow.com and things went completely smooth every time. It is very hard to trust folks on the internet, whether you are a buyer or a seller! The only way to really trust is to verify, making sure as this post states, that the buyer is who he says and the site he is selling actually meets the standards he is stating in his pitch. It is easy to verify some things,such as rank for a keyword. Harder to verify traffic, but that can be estimated. Bottom line? Get as much info as you can before buying any site!
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