Flippa Friday: How To Spot Scams on Flippa

I’m a big fan of Flippa, they a great selection of websites and fully-fledged online businesses for sale on their site. I’ve had some great sales on Flippa and I’ve also purchased some awesome sites through the service. What I find most people are concerned with when trying an online marketplace like this is – scams.

There definitely are no shortage of scams on Flippa, just like there are on eBay. These things are very hard for large marketplaces to regulate and believe me, both Flippa and eBay do a lot to stop scammers and prevent them from using the system. Still, scams are out there and if you’re just getting started buying web businesses they can be hard to spot.

In general I think there are three basic ways you can at least do an initial spot-check to make sure you buy a legitimate site. Below are three things that should raise an eyebrow and make you dig deeper before making a purchase:

  1. High revenue claimed when the site has only been around for a month or two. These are all over the place and it just takes logic to figure this one out. If someone claims to have tens of thousands of visitors all from search, all in a month or two, and thousands of dollars in revenue from it, something is usually fishy. In many cases this means someone is using a traffic generation service or they could just be completely lying about the traffic and revenue. Definitely look-into this and ask the Seller if you can do a Skype screen share and watch them login to their analytics and adsense account to verify the revenue.
  2. Sites not providing traffic or revenue screenshots. Let’s be honest, if your site is really making money and getting good traffic, why would you hide it? This is a major selling point! Be weary of anyone not providing traffic or revenue stats and ask them to post them. If you’re spending more than a few hundred dollars I’d also recommend doing a screenshare and verify that they aren’t falsifying the screenshots.
  3. Sellers that don’t respond to questions. You want to do business with someone you can trust, if you ask them questions and they don’t respond is this really someone you want to buy from? You should be basic logic but it’s amazing how many people buy sites from Buyers they can’t get a hold of who aren’t providing any proof behind the stats they claim. As in any business deal, make sure you trust the person you’re doing business with.

While this is far from an exhaustive list, these three tips can help you spot scams. Remember, these qualities don’t make something a scam, but they are a warning sign. The best thing you can do is ask questions and work with the Seller to understand all the details you need to make a truly informed purchase decision. There are great websites on Flippa being bought and sold every single day, if you can learn to avoid the scams and spot the deals, you could walk-away with a nice passive income stream.

{ 5 comments… add one }

  • Jeff September 9, 2011, 5:10 pm

    > you could walk-away with a nice passive income stream

    This is a pipe dream! Most websites that make decent money are far from passive.

    Reply
  • Zonqor September 10, 2011, 6:12 am

    Kindly define screenshare pls.

    Reply
  • Zonqor September 10, 2011, 6:15 am

    Morgan, Can you lead us to some good buys once in a while? tnx …

    Reply
  • Jon September 10, 2011, 7:21 am

    Morgan, there are always going to be fools out there that fall for these scams, it’s just the way of the world!. Unfortunately, Flippa seems to be more interested in their listing fees and commissions instead of protecting their buyers, IMO!.

    Reply
  • Zonqor September 12, 2011, 2:34 am

    Sedo does it best as they verify every member, unlike CAX and others.

    Reply

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