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Thread: Yet another Flippa scam

  1. #1
    aka "meathead1234" Thomas is a Premium Member
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    Yet another Flippa scam

    I don't know the exact number of scam listings on Flippa, but there are a worrying number of buyers who get ripped off for $XX,XXX or more on a regular basis.

    Here's a good example of a listing where your average first time buyer would never be able to figure out it's a scam, but to the trained eye it has very obvious red flags. I haven't gone too much in depth but my 5 minute analysis is enough to make me ignore the listing and move on. Hard to get 100% objective proof at first glance - which is why you often have to go with your gut.

    Listing here: https://flippa.com/2986502-pr-3-ipho...-yr-background

    Firstly, the traffic itself (and claimed numbers) look legitimate. The traffic is "verified" by Flippa so that will add confidence to the average buyer. No red flags there.

    Seller is using a username that doesn't seem relevant to anything or connected to his real name. Flippa shows seller as being located in Romania - this alone would make me look closer.

    Adsense revenue also appears to be fine. This has been "verified" and the screenshots seem okay.

    The problem comes with the affiliate program and income claimed. The affiliate program used pays out $19 per sale. Fine. If you look at the affiliate reports it shows the domain name on the account reference (https://flippa.com/auctions/2986502/...nts/911506.PNG) - many would take this as verification that all sales originate from this site. This is not true but is smart from the seller as most people wouldn't notice.

    The real giveaway that this is a scam is the number of clicks the affiliate program gets and the conversions. For a site with ~40,000 visits a month the seller is claiming ~5000 clicks a month on his affiliate link and then a 5% conversion rate from there (not totally unbelievable although unlikely with a high % of traffic from traditionally low paying countries like India - http://www.alexa.com/siteinfo/clearcydia.com). That would mean the banner/affiliate link CTR would be around 12.5% based on seller's claims. Anyone who runs sites knows this isn't going to happen with a small banner on the homepage and extremely poorly written content on the site. I'd expect the CTR to be more like 1.25%. So that would be 500 clicks and only 25 (rather than ~250) conversions. This would reduce the revenue to $2000 (Adsense) + $500 (affiliate) a month based on my assumptions.

    So, I believe the site to only be making $2500 a month. It's very smart on the seller's part as when (assuming everything else is legit) revenue comes in at ~$2500 a month he will get away with it and can blame all sorts of uncontrollable variables. Much smarter than selling someone a complete dud as in this case he will live another day to sell again on Flippa.

    This listing is a good example of something looking so good it's probably not true... and that it always pays to do your due diligence.

    Before someone comes in here telling me I'm getting overly cynical and making assumptions, here's a more objective check I made after my initial assumptions:

    http://www.who.is/whois/newestiphone.com (affiliate program being "promoted)
    http://www.who.is/whois/clearcydia.com (website being sold)

    Both hosted on the same IP. What a coincidence

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  3. #2
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    I've been looking into ways of verifying websites that generate revenue from affiliate programs like this one. I have had people ask me how they can know that the income being generated is coming only from the site mentioned or featured in the sale - it is a tricky question.

    Thomas's evaluation is the first step I would take - look at the traffic, the numbers, and then do a "does it make sense" check.

    Secondly, I highly recommend using domainttools.com to see what else the seller owns.

    Obviously this isn't entirely fool proof, but the thing about scammers is that they don't need to be fool everybody, they just need to fool 1 person.

  4. #3
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    Wonderful post. This is a mistake that I may well have made myself (assuming that affiliate income posted to account was necessarily flowing to the site listed.) Surely enough, i googled the registrant, and he is affiliated with several other blogs in the same niche. Someone is going to have a serious case of buyer's remorse on this one.

  5. #4
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    I saw something similar in another auction:

    The screenshots of the affiliate payouts are like what Thomas posted, very bare, and it's likely the same ploy w/ owner controlling both the site & the affiliate company. A google search on the affiliate company reveals a past buyer complaining that the affiliate payments mysteriously stopping after a couple of months.

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