Buying Blind and Everybody Lies

Most of us site buyers rely on stats heavily, check, recheck and verify them to try to find any inconsistencies, patterns and derive the averages. And all is nice and clear when you have access to all the stats, numbers and screenshots when buying a site, but many times it's just not the case. The could be a number of reasons why stats are not available:

1. Sometimes it's done in a clear attempt to hide the site's poor performance, inflate revenues and traffic. In this case some regular checks and common due diligence will help reveal a lot of red flags that should tell you not to go through with this. 99% of the time making a few google searches on the site, seller's name and checking it's alexa and other public data will reveal the potential scam.

2. Another common situation is when you have no time to evaluate it properly due to an ending auction, or other pending offers. Or when it just seems too good to be true and you know that if it is actually true it'll be sold in minutes. That is usually a trade off between the potential gain by acting fast and the risk of making a bad decision.

I trust my instincts, but I prefer to take my time and usually don't rush in. Frequently I miss up good deal because of this, but also it helps avoid the bad ones. The general rule is that if something looks too good to be true it probably is, so I believe it's best not to rush in such decisions and take the time to follow with the dd if you have any doubts.

3. When you contact the site owner directly who never listed the site for sale and may not be very interested in selling, it's quite common that he would refuse to provide any stats before you make an offer. Usually since it's a site you're interested in, you should have experience in the niche and have a pretty good idea of how much the site should be making and thus how much its worth to you. Making the first offer is rarely good in negotiations, especially without the data. It's easy to get excited about a site that seems promising and overestimate it's potential. This situation quite frequently leads to bad decisions and significantly overpaying. However when you feel confident enough that you can monetize the site efficiently due a certain competitive advantage it can be a great deal.

4. And finally most frequently this happens because the seller doesn't have his stats in order and is not tracking revenue properly.

With traffic stats it's usually not such a big deal as there is always some server side stats software like awstats and there is frequently google analytics data, or some stat collecting scripts set up, like statcounter.com or extremetracking.com. There is also outside independent data from alexa and compete to verify those. And tools like semrush.com and keywordspy.com to check the seo traffic in depth.

A problem could be with figuring out the sources of traffic - but again pretty much all these sources of stats provide that data.

A much more common problem is when you can't verify revenue. Very frequently site owners that have many different sites and use different affiliate programs don't bother to set up separate tracking ids for individual sites. I've encountered this many times when buying sites. The seller would always offers some kind of estimate as to how much he thinks the site is earning based on his other sites and experience.

Naturally the more trustworthy the seller seems the higher is your inclination to trust his figures. But the ugly truth here is that pretty much everyone would round it up, or exaggerate the revenues. It could be either in an attempt to get a higher price by knowingly misleading you, abusing the fact that those figures can't be verified, or by simply taking the upper bound on the potential revenue range.

From my personal experience I've found that on average the sellers' estimate fall short of the actual revenues , derived from the site after the purchase is complete, by about 10-30%. So now everytime I'm buying blind I take into account that on average, just like in that popular House episode, everybody lies by 20%. Usually it's not a high enough number to turn a good deal into a bad one, but nevertheless something to consider next time you are 'buying blind'.

What's your experience on this?