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.