Monthly Archives: June 2011

Buying websites online

I’ve been spending some time recently looking at the possibility of buying a couple of website businesses. Why? Well, I want to expand my portfolio but quite frankly, I am too lazy to start something from scratch!

Buying an established business means I can pick up a site which has an existing customer base and income stream without doing the hard work of building the site and doing the initial marketing (which is quite often the hardest bit).

What I have discovered is that even finding a suitable website business to buy is an absolute nightmare! Although there are plenty of sites up for sale, you’ve really got to sort though the rubbish to find a gem. Not only that but there seem to be a lot of people out there who are quite prepared to try and mislead buyers if they think they can get away with it.

Fortunately I have a wealth of online experience built up over 13+ years so I am probably better placed than many people to pick up on the areas where sellers may have been less than honest. Let me give you some examples of the type of thing I have seen in just the last week…

Supplying misleading traffic figures seems to be a popular thing to do, especially with new websites. I have seen sites for sale which have only been running for a month or two which are claiming traffic of 20,000 unique visitors per month! Unless you are incredibly lucky, this just doesn’t happen. Dig a little deeper and chances are that the seller has paid for a ‘traffic package’ which will provide a stream of junk traffic to make their stats look good. I found one site which was clearly targeted at a US audience and despite only being online for six weeks, was claiming 30,000 unique visitors per month! A quick look at the Google Analytics file associated with the site confirmed that yes, Google was counting in the region of 1000 visitors per day. However, dig a little deeper and you would see that ALL of this traffic originated in China! Not good for an American site and a huge warning sign that this traffic is not what it first seems.

Take a second site I found. Basically a niche site which was selling a particular type of kitchen product. There were about 90 different types of this product available for purchase and the site claimed that all products were dropshipped direct from the main UK distributor. The products were quite expensive which meant a handful of high value orders each month. Over the past year there were around 70 orders in total. Nothing strange in that you might think. However, I noticed that as well as over 80 testimonials from customers, every single item on the site had at least 1 product review from a customer and some had up to 5! There were over 250 product reviews apparently from just 70 orders. This is completely impossible – it’s a fact that most people won’t bother with a testimonial or a review, even Amazon doesn’t have reviews for every product. Again, I dug a little deeper and found that ALL of the reviews were written in the past two months and the icing on the cake for me was that one of the reviews actually read as follows:

“I got paid a measly 5cents for rating this product and writing this review”

Priceless – you couldn’t make it up (well actually you could and they did!).

This particular case actually got worse. I figured that whilst the reviews etc might all be fake, they did seem to be making sales from the site (of course the fact that the seller had lied about the reviews could mean they had lied about sales too). There was enough information in the sale listing for me to determine who the dropshipping wholesaler was and I therefore contacted them directly to obtain some wholesale prices. I wasn’t about to hand over a lump of money to the scamming seller but I might throw up a quick website of my own instead ? Guess what? The dropshipper advised me that they had recently decided to cease offering a dropshipping service. And there ladies and gentlemen we almost certainly have the reason that the website is up for sale.

You might think that a site like this would never sell, that there wouldn’t be anyone out there daft enough to buy it. You’d be wrong – the site sold at auction for almost £12,000 and I bet the poor buyer has no idea about any of my findings above.

I have come across numerous sites like this during the past week, it really is quite worrying as, to someone who doesn’t understand how traffic/sales figures and so on can be faked, it would be easy to get ripped off.

If you are looking at buying an existing online business, just be careful out there – it’s a minefield.

HMRC to Trawl the Web for eBay Tax Cheats

Well it had to happen sooner or later and to be honest, I am surprised it has taken as long as it has! The Inland Revenue announced last week that it would be starting a campaign to hunt out tax dodgers selling on eBay and the Internet in general.

HMRC will be using ‘bot’ software to automatically look for specific information and trading patterns which will identify certain people and companies and then cross-reference these details against their own records. This will allow them to pick up any discrepancies.

The campaign will be launched later this year and will specifically target eBay traders and other small businesses and private ventures such as personal tutoring or tradespeople.

The Inland Revenue has suggested that if you are in a category about to be targeted and feel that you might have been ‘less than honest’ about your tax affairs, that now is the time to come forward – don’t wait until you are caught later in the year.

Mike Wells, director of Risk and Intelligence explained,

“By being open about our areas of interest for the coming year, we hope to maximise the exchange of information and help customers pay what they owe.

We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people so I urge them to come forward and disclose voluntarily.”

Does this affect you? Have you been enjoying a tax-free income from eBay or some other online source? If so, it looks like the good times may be coming to an end and it might be time to start thinking about putting your affairs in order. And if you have been under-declaring tax for a number of years, it might be time to start saving up…!

Fulfilment by Amazon

I don’t know about you but my least favourite part of selling products via the Internet has always been the packing and shipping element. I just don’t enjoy it but if you want to sell physical products, it is a job which has to be done.

Drop-shipping goes part-way to getting round this task but for me there have always been too many ‘cons’ and not enough ‘pros’ when it comes to this method of trading. The ideal scenario would be to have someone who would happily store, pick, pack and ship your products as you sell them. Someone trustworthy, someone with reliable and tested systems already in place, someone who isn’t going to charge a fortune to do this for you. Someone like Amazon perhaps?

Yes, its true, Amazon are now offering a pretty amazing service called Fulfilment by Amazon which does exactly what the name suggests. Amazon will store your entire inventory (from one item to thousands of items) and pack and ship your products as you sell them. This service isn’t just designed for those who are selling their products on the Amazon website (although it integrates perfectly if you are) but you can also use Fulfilment by Amazon if you are selling on eBay, from your own website or pretty much anywhere else online!

It’s affordable too. Amazon charge a fee for handling, picking and packing and a weight-based fee. Obviously with such a range of products available charges will vary widely but to give you an idea, fulfilment by Amazon (for a product sold on Amazon) of a 1kg electrical product would cost just £1.85 plus normal Amazon Marketplace fees. Fulfilment for the same product sold somewhere other than Amazon would cost £3.85 which is still a pretty good price in my book when you consider the amount of work saved.

If you are selling high value products on the Amazon Marketplace, things get even better as Fulfilment by Amazon are currently charging absolutely nothing to fulfil products with a value of £300 or more (they simply make their money on the normal Marketplace fees). For high value products, surely the Fulfilment by Amazon service is a complete no-brainer?

Amazon have for some years been catching up with eBay and some would say they are already over-taking them as the place to sell. Offering a complete fulfilment service will put Amazon way in front for many sellers. This is particularly the case when you consider that eBay has always attracted buyers looking for a bargain whereas many sellers find that Amazon buyers are happy to pay higher (and often more realistic) prices.

There is one other huge advantage of using Fulfilment by Amazon and that is that it will give sellers the flexibility to take time off and actually go on holiday. If you sell on eBay or anywhere else online, you will know that your business is open 24/7. This means if you want to take a break, you either need to arrange for someone to ship orders for you or you just have to close things down for a week or so. I tend to close my eBay shop down when I am away as it just easier but if I was using Fulfilment by Amazon I wouldn’t need to. As long as I had an Internet connection to keep an eye on orders etc, I could sit back and let Amazon handle everything for me. The ideal scenario in many ways and one which is long overdue. Well done Amazon!