When it comes to expanding your business or implementing new retirement strategies, buying a successful website is a great move to make.
However, because building a website is so easy, there are quite a few scams and schemes that you’re going to need to know how to navigate your way through.
Unsavory characters are lying in wait for new investors and entrepreneurs looking to buy a website, only to scam them out of their hard-earned money.
As a digital business broker, I get to see businesses of all shapes and sizes. Unfortunately, I’ve had many shady types try to get me to help them sell their websites to some unsuspecting investor.
I refuse to help those sorts. I take what I learn about their schemes help my clients avoid getting scammed.
Here are a few of the biggest lessons that I’ve learned over the years.
Tip #1: Use an escrow service
One of the biggest scams you could encounter having the seller take off with your money before they transfer the website to you.
This is especially true for websites that are worth thousands or tens of thousands of dollars.
The scam typically involves the website owner saying that they are facing hard times and have a premium website that’s worth substantially more money than what they’re willing to sell it for.
The allure of getting an amazing deal will attract many buyers. Once this happens, the scammer can then set up multiple deals at the same time.
The scammer will have each of the potential victims wire money to the scammer’s account, with the promise of transferring the domain name upon receipt. However, the website transfer never actually happens.
Instead, the scammer will empty their own account and then disappear completely. Because the account was emptied it’s impossible for the victims to chargeback the money that they’ve spent.
To avoid this scam, make sure you’re using an escrow service. By putting the money into an escrow account, you can release it once the website has been transferred to your name. Most scammers will refuse to use escrow, which helps you get out before you face trouble.
Tip #2: Believe nothing until you verify for yourself
The schemer will tell you whatever they think you need to hear in order to push you into buying and get the money transferred into their account.
They’ll even go as far as to create fake screenshots. Screenshots like fake traffic logs, fake revenue reports, and other faked information.
When you’re buying a website, you need to follow one critical rule: believe nothing that you hear and only half of what you see.
Keeping this rule in mind will help you weed out the potential scammers before they get a chance to make you a victim.
When you’ve found a website that you want to buy, get the seller to give you backend access to their stat tracking software.
You can get on a video call with the seller. Have them do a screen share while they log in to their traffic tracking service and the networks that they’re using to generate and track revenues.
By getting on a video call with them, you can see them log in and have them refresh the pages and move around inside the dashboards. This makes it substantially harder for them to fake and will catch scammers off-guard.
If they refuse to give you this access to verify their traffic and revenue, then it’s time for you to run from the deal.
Tip #3: Research, research, research
Scammers love to push a deal through as quickly as possible. They want to make sure the buyer doesn’t have time to gather the proper information or have second thoughts.
Spend time going through the website. Look for areas of concern and get the seller to explain what happened, how the website was built, and get them to review any potential problems on the website.
Remember, no site is perfect. If the seller is attempting to get you to believe their site is, your alarm bells should be ringing.
Tip #4: Ask more questions
If there’s one thing a scammer hates, it’s someone that asks too many questions.
When they have to answer questions, there is a high probability that they’re going to say the wrong thing and kill the deal. That’s perfect for you.
Those scammers will become impatient and even irate with you. That’s when you take your money and you move onto another website.
A legitimate seller will have no problems with you asking questions because each question brings them closer to getting the deal finalized.
Let the professionals handle it
With so much at stake, buying and/or selling websites as an investment strategy can be overwhelming.
There are professionals available that can make sure you don’t get scammed, but also make sure you get the best deal possible. Professional business brokers buy and sell websites everyday. They know how to spot scams and the best way to verify information.
You can buy a website through a broker or you can hire them to consult with you about a website that you have found to buy. They can help ensure the sale price is not more than the website is really worth.
Brokers will also insist upon proper contracts and the use of an escrow service. They can assist you during your due diligence process, which can give you peace of mind.
The key takeaway from these tips is to make sure that you’re taking your time as you move through the process. Scammers will want to move as quickly as possible so they can scam as many people as possible before they’re figured out.
Bio: Jock is the founder of Digital Exits, an online brokerage service. Jock has been featured in Forbes and contributed to numerous websites and podcasts. He specializes in appraising and buying/selling online businesses and enjoys helping other entrepreneurs do business online.