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Do you think it's worth it? Website on Flippa

by kallensmommy Banned
7 replies
I was on Flippa today as I always am and I'm looking to invest in some sites. I found one that's pretty interesting and need some advice. The listing is for an almost 7 month old SEO company. It's apart of a web design company that the seller owns. She is willing to allow a partnership so that she can send me new customers and in turn I'll send her design customers. It's made over 100K since it's launch and all income proof is posted. She didn't do any SEO work which doesn't scare me because she has an extensive client and mailing list. What do you guys think? Too much risk or great opportunity? The listing is for fwbpages dot com i can't post the link yet but you should be able to find it on flippa that way.
#flippa #website #worth
  • Profile picture of the author sbucciarel
    Banned
    That site looks like the real deal. One thing not mentioned is all of the work done. Is it outsourced? If so, what is the cost? Will you keep the outsourcers if it is outsourced?
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    • Profile picture of the author kallensmommy
      Banned
      Hi Sbucciarel thanks for your fast response! I've heard so much about the scams out there especially on Flippa that it's always nice to have someone else's opinion! I reread the listing after messaging the seller, she responded that like the listing states the work is outsourced and the outsourcer she's uses is very reasonable for instance an order for say 1000 backlinks would cost 5.00 from the outsourcer. It seems I missed the entire sections on orders lol. This was the part where she said it in the listing:

      Orders: Beginning to End
      When a customer places an order they are taken to their cart where they are able to use several payment methods to complete their orders. In the backend of the site you receive the order details and customer's information, all work is outsourced so you pass on all information to the outsourcer. Luckily I have been working with the same outsourcer for over a year and she does all of my work at a super low price. She completes the work very quickly and you than pass on the completed order and details to the customer. Easy as that!


      How the heck did I miss that? Guess it's been a long day. Thanks for your help!
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  • Profile picture of the author sbucciarel
    Banned
    Yeah ... I missed that too. Sounds like one of the more genuine auctions I've seen lately on Flippa. Lot of money involved, so do due diligence on the income screenshots. Try to get more income verification if you can and of course, you would use escrow for this transaction if you should buy it.
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  • Profile picture of the author Thomas Smale
    I would be very careful of any business where it (sounds) like most of the business comes from her other design business.

    Whilst you can make a partnership "agreement" these can get messy and there is always a conflict of interest. If it's a reciprocal agreement it can work, but I'd just be careful and make sure you have a good lawyer. You'd definitely want a non-compete to make sure she doesn't just replicate the business and keep all new clients for herself.

    That said, had a quick browse over the listing and the seller seems genuine enough. You should still take that at face value and do all appropriate due diligence as with any other purchase of this size. For example, at first glance, the profit margins look too good to be true so you'd definitely want to verify all the costs associated with an order.
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    I specialize in selling websites over $10,000 in value. No obligation, confidential valuation here.
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  • Profile picture of the author kallensmommy
    Banned
    Thanks for the helpful advice, when I went back to the auction she seemed to beat us to the chase and commented that she will be signing a non-compete to include past, present and future customers from both sites. What type of due diligence should I really be doing as far as income verification is concerned. Her proof seem legitimate what more should I be asking? I'm new to something of this size and money!
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    • Profile picture of the author Thomas Smale
      Originally Posted by kallensmommy View Post

      Thanks for the helpful advice, when I went back to the auction she seemed to beat us to the chase and commented that she will be signing a non-compete to include past, present and future customers from both sites. What type of due diligence should I really be doing as far as income verification is concerned. Her proof seem legitimate what more should I be asking? I'm new to something of this size and money!
      Can't really comment on that without knowing exactly where it's coming from, however:

      Ideally, you'd want a tax return for the site, which should be possible if it's being run as a legitimate business. I believe it's tax season in the US right now, so getting one for 2011 shouldn't be a problem.

      More likely, you'll just get merchant account proof. I'd want a TeamViewer session to go over all of the numbers live. I'd want to make 100% sure I was happy with the source of income. Don't be afraid to clarify small details to make yourself feel comfortable with regards to the legitimacy.

      As well as income, make sure you verify outgoings, too (most people forget to do this). Nothing worse than buying a site, finding the revenue is the same as claimed, but costs being substantially higher!
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      I specialize in selling websites over $10,000 in value. No obligation, confidential valuation here.
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      • Profile picture of the author LegitIncomes
        Originally Posted by Thomas Smale View Post

        Can't really comment on that without knowing exactly where it's coming from, however:

        Ideally, you'd want a tax return for the site, which should be possible if it's being run as a legitimate business. I believe it's tax season in the US right now, so getting one for 2011 shouldn't be a problem.

        More likely, you'll just get merchant account proof. I'd want a TeamViewer session to go over all of the numbers live. I'd want to make 100% sure I was happy with the source of income. Don't be afraid to clarify small details to make yourself feel comfortable with regards to the legitimacy.

        As well as income, make sure you verify outgoings, too (most people forget to do this). Nothing worse than buying a site, finding the revenue is the same as claimed, but costs being substantially higher!
        It's really too early to get a 2011 return for most businesses, considering that if they are on a Jan-Dec year, we are only 10-days past the close of the year. For most that's not nearly enough time to complete tax filings.
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