Let me start by saying that Flippa has come a long way over the past decade. There is no hiding the faults of the past, but the Flippa of today is running a clean, streamlined business, taking multiple steps toward verification for both sellers and buyers to be sure that they operate a fully legitimate marketplace to buy or sell online businesses. They even offer their own due diligence service at this point if you are looking for extra security.
However, when I first started out browsing Flippa, back in 2013, a lot of sites were obvious scams, or were selling things that looked pretty scammy to me. For example, there were a ton of turnkey sites that offered “social media followers”, back when it wasn’t against the Terms of Service of places like Facebook to sell fake followers.
These sites were fairly questionable. Were the followers they sold legit? Was this a legit business model? Would it even make money? The fact they were turnkey starter websites meant there were no claims being made about income, which probably appealed to the people who bought them, but did that mean they were any less of a scam?
To Flippa’s credit, they’ve largely eradicated this type of junk site from their marketplace, but there ARE still sites where you look at them and think “Is this a legit thing? Or is this dude trying to scam us?”.
In fact, one of my biggest fears when I was trying to learn due diligence was that I’d buy something that was a complete scam.
Not just that the seller was lying about their numbers, but that they were also lying to the website audience itself. That would be a double whammy.
My worst experience was when I bought a site that came with an eBook. My due diligence was focused around the eBook sales. I saw there was a very low refund rate, which was great. My initial worry was that someone could create a bunch of fake sales in order to boost their numbers, but I couldn’t see how $5,000 worth of sales for 3-4 consecutive months and only 1-2 refunds could be faked.
While these sales indeed weren’t faked, I later found out the eBook itself was based on completely made up stories. It was a weight loss guide, and the testimonials on the sales page were fake. After taking over the site, I started receiving an email from someone saying their IG images had been stolen, the quote wasn’t theirs, and the results they’d received didn’t come from purchasing this eBook.
As it happens, the sales themselves were legit, but I felt terrible selling people a “scam” eBook so I had to get it re-written, changed the sales page to be legit, and ultimately saw a loss in conversions as a result. I slept better at night, but made less money.
This is a prime example of what I’m talking about when it comes to buying a site with false info. The sales data might be legit, but if the site is scamming people, that’s a small consolation.
There are other sites that I sometimes wonder about legitimacy too. For example, sites that review paid surveys. I used to wonder whether there were any legit paid surveys, or if these sites were just driving unsuspecting people towards scams. The same is true for people who positively review blatant scams like Binary Options or other BS “make money online” opportunities.
It turns out that there are plenty of legit surveys out there, as this site shows, and there are also plenty of make money online opportunities that are legit as well, which makes it even more important to be careful when reviewing a site like this. It can be quite nuanced.
You have to first ask, is this a legit niche? If it is, is everything on the site legit? Is this a site I’d be ashamed to show people?
Niches like trading, make money online, even dating, have a mixture of high quality products, and outright scams. Only experience and thorough vetting will help you buy the right websites.
Another thing to consider is what the long term prospects of the niche are. The payday loan niche for example was full of scams, but probably had a few legit sites that helped people with consolidation or just understanding whether or not they should take one.
Then in late 2013 Google released a “Payday Loan” update which pretty much ended that niche, thankfully. It likely ended some legitimate sites too though, as Google threw the baby out with the bathwater, but ultimately made the search results better.
If you’re looking at a site doing well in a new niche that might be called into question in future, that’s something you need to consider (and could well be why the seller is offloading the site).
For example, crypto back in 2017, or CBD sites now. Some of them will be genuine websites with quality products and information, others will be selling snake oil and get rich quick, or they’re selling products which make become illegal in the near future.
How To Avoid Buying The Wrong One
The easiest way is to simply not enter any niches where there’s a gray area, unless you’re experienced in the niche. That said, I still think it’s a worthwhile pursuit to learn about the site, the niche, and the things that could be legit or not. The more you become familiar with this type of site, the better you’ll get at due diligence (which was also the subject of my last post).
It’s perfectly fine to have no-pressure conversations with a seller. You’re not wasting their time, because you may conclude the site is legit and decide to move forward.
The golden rule though is that if you’re unsure, just pass on the deal. You don’t lose money by avoiding a purchase.
My final word of advice would be to just be a little less naive, be skeptical of a site and look for reasons not to buy it, or not to trust the information on the site. If you can’t convince yourself it’s a legitimate business, then err on the side of caution.