The website flipping industry is a lucrative one – Sitepoint recently cleared $1,000,000 in sales monthly for the first time and those are just public deals.
Sadly, in any industry where there is so much money, there is always going to be people looking to scam newbies out of money. Here’s a few tips to stay safe, both when buying and selling.
When selling:
1. Always take payment up front. I don’t care whether you’re a new member on a forum and your account was created two minutes ago – anyways that asks for the website up front will usually be trying to scam you.
2. If possible, use Sitepoint. Although it costs you to list, it’s a lot safer than Digital Point (there is the verification process – which requires a phone verification, as well as site verification for sellers) and if you’re selling anything worth more than around $50 you will usually get 30 – 70% more for the sale than you would at Digital Point or other webmaster forums. Sitepoint has a higher class of clientele, with more money to spend.
3. For larger deals, use Escrow.com – for me, I take my chances with Paypal (however I follow the next step to the letter), however you guys should use Escrow for larger deals. What quantifies as a large deal? Depends on the person, but for a newbie it would be anything over $500, for a slightly more advanced webmaster it would be anything over $1,000. It is a hassle, but it’s THE safest way to do business online.
4. If you’re too lazy to use Escrow (*coughs*) and go through services where chargebacks can be done, wait 24 hours before you transfer. The thing is that a lot of scammers pay with hacked Paypal accounts, whose real owners report unauthorized activity and get their money – Paypal will NEVER side with you in this case.
If you wait 24 hours there is a good chance the real account owner will find out before then and chargeback, saving you from transferring and losing everything.
5. Pay attention to the buyer. On forums, there are things that can tip you off – some forums have the ‘iTrader’ or past history as a feature, while members with large reputations and large post counts should be trusted more easily than those without. However, do not blindly go with anyone, no matter how reputable they seem – remember, forum accounts can be hacked too.
If a buyer is jumpy – wanting to close a sale quickly, that’s usually a sign that something is amiss. Don’t be pressured.
You can also look at a person’s Paypal record – someone that is verified and has a few hundred as their rating (mine is something like 420~) is a lot more trustable than someone that is unverified. However, remember that the Paypal account may be hacked so follow the previous step.
What you do is look at all of the above – if there are too many things that you feel uncomfortable with, don’t go through with the deal, no matter how good it seems. Remember that the more unrealistic it is (for example, a buyer offering you $2,000 for a website worth $100 at best) the higher the chance that you’re dealing with a scammer.
When buying:
Do the above in reverse.
Seriously though, take a note of the user’s history, reputation, Paypal level. Other things:
1. Ask the user to put up a page – something like /forsale.html – to prove they have access to the website.
2. Check WHOIS details and see if it matches the name of the person you’re dealing with.
3. If you can get access to statistics, make sure you verify them. If someone has a website promising thousands of hits daily and wants a high amount for it, ask for them to make you a Google Analytics account on the domain so that you can check if they’re lying or not.
If the website has a truckload of income, check where it’s from – for example, if they tell you that it’s a digital product which has been marketed on forums, ask for the forum thread and see how active those threads are.
3. Ask for profit. If they have expenses, you want to see proof of them. You don’t want to buy a website with $10,000 in revenue only to learn that it was making $100 profit monthly. If they tell you that they’re spending X on marketing, you want to see screenshot proof of that X.
4. For larger deals, try and discuss the sale with the buyer via a phone or even just Skype. Ask all questions you have before concluding a sale – including those about how they advise marketing the website, whether they provide after sale support (to you) and whatnot.
5. Don’t go for unrealistic deals. If it sounds too good to be true, it probably is – or there’s something you’re not being told.
Do you have any other tips you use when buying or selling a website? Let us know 
July 25th, 2008 at 4:38 pm
These are some good tips to stay safe Jason. All of these and flipping websites are sort of like a series, a good series at that. As I am new to buying and selling websites, these are some great tips for me. And Jason, are you giving these tips out of experience (like you were scammed) or are you giving them because you heard them somewhere else?
Nathaniel’s last blog post..Go Green, Stay Green, Live Green
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July 25th, 2008 at 4:41 pm
One of my first few website sales was a $650 sale for a proxy – I got scammed then. Have been a few other times too, but for nothing as much. Most I’ve learned by myself, some from just using common sense
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July 25th, 2008 at 4:43 pm
Sad to get scammed, but then you still have learned something from that. And yes, I forgot to add common sense to the question. A lot of things do just come from that, you know what to do, that is how most find their way (though they might be scammed in the process)
Nathaniel’s last blog post..Go Green, Stay Green, Live Green
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July 25th, 2008 at 5:26 pm
Your last few posts have been fantastic, including this one. Very useful for people flipping and such.
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July 25th, 2008 at 5:30 pm
Gah double post… Also I notice that many scammers will rack up a successful list of small deals and suddenly go for a large deal and scam them.
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July 25th, 2008 at 5:37 pm
Great post Jason, as I’m going to start my website flipping career soon. One question, where do you usually go to put your sites up for sale besides DP and SitePoint? Just wondering.
Ralph’s last blog post..Rid’s Review – Hancock
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July 25th, 2008 at 6:04 pm
I think escrow is a great way to protect BOTH parties in these situations. Learning alot here about flipping, might try my hand at it soon. Unload some old inventory.
Sell Porn Make Money’s last blog post..Friday Freebie – Free Porn Video – Take 2
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July 25th, 2008 at 6:10 pm
Great post Jason! I didn’t know about that website escrow.com like you, I just take my chances with paypal.
Germz’s last blog post..How freelancing can help your business.
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July 25th, 2008 at 6:53 pm
cant we mail to the id from which buyer has paid but offer 24 hours of payment just to ensure it was not hacked.
will the above one be a good step?
anyway you pretty much summed up everything.i have noted a few points already which i was not practicing yet.
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July 25th, 2008 at 8:47 pm
Thanks for your helpful info once again, Jason! I’m working on my first flip project with the help of one of your previous posts, and this post has convinced me to go with Sitepoint. The cost to list the website initially turned me off. But I’m suddenly seeing the advantages.
Rob’s last blog post..Don’t Buy Google Nemesis
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July 25th, 2008 at 8:55 pm
Very true and helpful information here.
Many people are scammers, and you really need to be careful nowadays.
Regards,
– Mark Cuda | http://monkeyblogger.com
Mark Cuda’s last blog post..5 things to do before publishing your post
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July 25th, 2008 at 9:39 pm
I would like for you to explain something more about how to avoid scamming chargeback from PP?
Aleks’s last blog post..Funny picture of the day – Waiters
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July 25th, 2008 at 10:50 pm
Great tips, i’ve been burned a few times when buying websites, when the seller has taken my money and run.
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July 26th, 2008 at 1:05 am
Some seriously good tips I that could be really helpful to me when I start in the whole flipping business, thanks Jason! By the way, I would give your content a 5/5 this month, keep it up!
Rajaie AlKorani’s last blog post..10 Tips For Writing Better Posts
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July 26th, 2008 at 2:16 am
Thanks for the info! Know what? I got fooled by 2 customers already.. Damn! Those scammers paid me with hacked Paypal accounts.. Gawd! I already lost $105.. Gesssshhhh..
Dhadha’s last blog post..Win Cool Prizes!
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July 26th, 2008 at 7:12 am
Yeah I remember back when you got scammed for the $650, you have come a long way since then!
Looks like you are providing a lot of website flipping information here free to the readers, do you still plan on doing this as a paid course? Maybe this is just a primer for that?
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July 26th, 2008 at 8:31 am
Jason : was the 650$ scam for a proxy site? I think I remember it.
Anyway, great tips – they’ll certainly help many people and hopefully decrease scams.
PS : did you realize that your blog has turned to PR4?
Congrats man!
Suraj’s last blog post..July 2008 google PR update
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July 26th, 2008 at 5:15 pm
Good stuff Jason. I haven’t dealt much in sitepoint and places like that, but this is a good list to follow with any online sells/buying activity.
You would think most would do this stuff, but sadly, many don’t. Especially the wait to transfer tip, most newbies transfer that money as soon as it hits the account! lol
JK Swopes’s last blog post..Non-cash cashflow and indirect profits. How much are you really making?
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July 27th, 2008 at 11:26 am
Great post. I would LOVE LOVE LOVE a post on how to begin making money from selling websites.
Like really practical stuff. Like how to list it, how to transfer all the data over to another persons name (that is where I get confused).
Ryan McLean’s last blog post..How Can I Run a Competition
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July 27th, 2008 at 6:14 pm
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