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Thread: Hello - Another Website Buyer Here

  1. #31
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    If you say unicorns exist, and I say they don't, is it my job to prove that unicorns do not exist? A Made For Flippa site that is a good buy is as rare as a unicorn.



    I've bought Made For Flippa sites for the domain before too, but I'm buying the domain not the site (that should be obvious).



    And, to further that point, it's not the $247 ones that are the real concern. Buy that and you've lost some time and $247. The ones that use fake traffic and earnings and (presumably) sell for thousands of dollars are the ones that should scare people.

  2. #32
    Administrator Clinton is a Premium Member
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    Dave, there's a bit of good in every site.

    I think some people are missing the point. It's not that every single MFF offering is completely worthless. My point is that people who make a living selling MFF sites are people who apparently have to cheat to survive and hence any site offered by a career seller needs to be approached with far greater caution. That the experienced buyer is smart enough to completely ignore the seller's pitch, the earnings and traffic claims etc., etc., because he likes the domain name, or he sees some other value to making the purchase ...is neither here nor there. As far as the amateur buyer is concerned, he doesn't know where the con is. Perhaps the domain is poisoned in some way. Perhaps the earnings/traffic claims are false. Perhaps the unique design and content aren't unique at all. And even if all that adds up, there's possibly some shill bidding going on to push the price up. If 99% of offerings, or even 95% or 90%, are contaminated / very high-risk then the time spent trawling through offerings looking for one on which you can exclude the risks is, for a new buyer of sites, not cost effective even if you value your time at under $1 an hour.

    My advice to newbie buyers: avoid MFF sites. Don't even read the listing. If you find a site you like, check the seller's profile. If he has many sales under his belt he's likely either a broker, which is fine, or an MFF seller, which is not fine. Move on. Is that "negative"? You're damn right, it is. Thomas, successful entrepreneurs find ways around problems, but due diligence isn't about finding positivity! Due diligence itself is about finding the flaws, the cover-ups, the possible dangers ...and nothing else.

    Quote Originally Posted by petertdavis View Post
    Saying that a Made For Flippa site could potentially be a good investment to the right buyer is really laughable.
    Quote Originally Posted by Kay View Post
    No, it's not.
    It's laughable because of the qualification. "Right buyer"? Anything, but anything in this world, is a good investment for the right buyer and that applies to my old, non-working refrigerator as much as it applies to nuclear waste.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

  3. #33
    Administrator Clinton is a Premium Member
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    Quote Originally Posted by Philondon View Post
    I haven't yet figured out what the hell is going on with those sites, or how the hell those sellers seem able to prove such great income and traffic yet are, seemingly, prepared to sell off these golden geese for pennies. But I'm not about to buy one!

    I'll keep on looking at these listing, out of curiosity alone. I figure that when I figure out what these guys are doing - what their 'con' is - I'll be able to add another branch to my due diligence routine.
    I could tell you, in broad terms, what these guys are doing. Because of books like the Chris Guthrie one you read, and numerous others, there seems to be no shortage of people looking to get into making money from websites preferably with an investment of a few hundred or a few thousand dollars rather than six/seven figure sums. As a result of all that hype around making money from sites, and the fact that there's a huge marketplace called Flippa where a large number of low value sites get listed and sold, a certain business model has taken off in a big way. It's about creating the veneer of a profitable website and selling it quickly before those unsustainable profits melt away. Whatever niche lends itself best to this modus operandi will get hit in a big way. Today it's wallpaper sites or social related sites, in the early days it was bespoke MySpace designs. The niche changes, the MO doesn't. But, as long as you're looking to spend a sub-$10K amount you're a target for these sellers.

    My top tips to you:
    1. As already mentioned, avoid career sellers especially career sellers in the third world
    2. Avoid sites without a long history of traffic and earnings. Demand a minimum of a two year uninterrupted history of traffic, earnings AND ownership
    3. Raise your budget and look at broker listings rather than Flippa listings.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

  4. #34
    aka "meathead1234" Thomas is a Premium Member
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    Quote Originally Posted by Clinton View Post
    Thomas, successful entrepreneurs find ways around problems, but due diligence isn't about finding positivity! Due diligence itself is about finding the flaws, the cover-ups, the possible dangers ...and nothing else.
    Somewhat disagree. If you are a DD provider, then yes, I agree. If you are the one buying - you often have to decide what to overlook and what not to. If you expect everything to be perfect in DD you're never going to buy anything. DD by definition is finding the issues - but DD can also uncover hidden benefits of the business (that were either not known by the owner or mentioned). For example, I had a client do DD on a site recently and ended up finding an old mailing list the seller had forgotten about. So, from a practical perspective (assuming you actually *want* to buy a business and aren't just doing DD as a service where your job is to report facts), you often have to look at positives rather than being fixated on negatives.

    Big/regular buyers I deal with are always practical when issues come up in due diligence. Unless a business has been obviously misrepresented, they will make it work - whether that means reducing the price, creative contract clauses, creative financing etc. You may disagree with that in principle but it does work for some.

  5. #35
    Administrator Clinton is a Premium Member
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    Why would I disagree with that statement? Of course a buyer can make it work.

    If you are the one buying - you often have to decide what to overlook and what not to.
    I don't disagree with that either. Once you know what the issues are you can decide to overlook them. As you say, DD is about finding the issues. You then analyse what you've found and decide how to proceed.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

  6. #36
    aka "meathead1234" Thomas is a Premium Member
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    Quote Originally Posted by Clinton View Post
    Why would I disagree with that statement? Of course a buyer can make it work.

    I don't disagree with that either. Once you know what the issues are you can decide to overlook them. As you say, DD is about finding the issues. You then analyse what you've found and decide how to proceed.
    Sounds like we both agreed with each other so let's leave it at that

  7. #37
    Moderator Kay is a Premium Member
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    Quote Originally Posted by Clinton
    I think some people are missing the point. It's not that every single MFF offering is completely worthless.
    I'm a little surprised to have been told that some of us are missing the point. If posters don't want to make a particular point then they shouldn't say what they don't mean. If one says something then people are bound to think you meant what you said. (Unless you're Matt Cutts.) Stick a fork in it (whatever that means) and say what you mean.

    Quote Originally Posted by petertdavis
    No, it isn't true that 90% of these listings are fraudulent, 100% of them are.
    And if anyone disagrees with that it's because they believe in unicorns.

    Quote Originally Posted by petertdavis
    If you say unicorns exist, and I say they don't, is it my job to prove that unicorns do not exist? A Made For Flippa site that is a good buy is as rare as a unicorn.
    Sure, I'll agree that unicorns don't exist (probably). But to say *all* MFFs are bad isn't the same thing. Most MFFs are a bad investment, especially for newbies, but they're not 100% bad nor are they 100% fraudulent. Some of us have posted in this thread to describe those rare occurrences when there is some possible value in an MFF.

    If you're saying to newbies that MFFs are usually a bad move, then I'd agree with you wholeheartedly. But that's not the sentiment in this thread. It's the negative "run away from this" attitude which IMO is misleading. It's like dumbing down the rules to suit the lowest common denominator.

    And given that some of you have commented on the DD aspect of buying a website, I'm curious to know why so few of you have commented on Clinton's assertion:

    Quote Originally Posted by Clinton
    Assessing: There are so called "due diligence" services you can purchase. Don't rely on those! If you cannot do the DD yourself to your full satisfaction ...don't buy sites. People selling you those services won't tell you the simple truth that you should avoid investing money based on their advice. I don't know of any one such service that's fully independent anyway. If they have a vested interest - via being connected with the seller or the marketplace or having a business relationship with either of those parties - you wouldn't be smart to pay them to advise you.
    After all, it's your own valuation and DD that will help you to determine whether a site is a good investment for you or not, regardless of whether it's an MFF or any other type of site.
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  8. #38
    Moderator Kay is a Premium Member
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    I have to pick up on these points as well:

    Quote Originally Posted by Clinton
    My top tips to you:
    1. As already mentioned, avoid career sellers especially career sellers in the third world
    2. Avoid sites without a long history of traffic and earnings. Demand a minimum of a two year uninterrupted history of traffic, earnings AND ownership
    3. Raise your budget and look at broker listings rather than Flippa listings.
    The apprentice dares to ask the master to clarify.

    1. Already discussed.

    2. Not so, because of the reasons Crabfoot gave at post #28 and which some others have agreed with. There are other reasons too. For example, if you're talking about a sub-$500 deal, it's more bother than it's worth to attempt to give a detailed history, including traffic and earnings and even ownership of all that a site has been through. That's why some people might list a site without those figures and prefer not to claim any income or traffic. It's just easier. To be fair, I've never seen one of these yet listed on Flippa, only my own listing on here.

    3. Not everyone can raise their budget to, say, $100k for their first purchase. And in most cases it would be very inadvisable to do so. Mostly we (EP) advise people to get their feet wet by starting small. I'd not advise any first time buyer to buy a site in a broker's price range unless they're very sure of how to run an online business. I'd also not advise a first time buyer to buy on Flippa - it seems to me that it's a pretty sure way to get burned when you're learning.
    British Expat - helping people to live and work abroad since the year 2000.

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  9. #39
    Top Contributor Dave McM is a Premium Member
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    Quote Originally Posted by Clinton View Post
    Dave, there's a bit of good in every site.
    So unicorns do exist, then?

    But I take the point as you subsequently explain it - not that MFF sites must by definition have no value and be fraudulent (which is what petertdavis appeared to be arguing), but that by the time you've found a worthwhile one you'll probably have wasted more time (⇒ money) looking for it than you'll get back. That seems a much more defensible proposition, though happily I've never taken the time to test it from personal experience.

  10. #40
    Administrator Clinton is a Premium Member
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    Mostly we (EP) advise people to get their feet wet by starting small.
    That used to be the advice I gave. Not any longer. The lower end of the market is so filled with scams - and some very sophisticated scams - that even people like Peter and I would get burnt badly with most low-end purchases made at Flippa. Ken (and others) keep talking about positivity and about explaining the opportunities that do exist at the more affordable end of the market and about how to exploit them. Sorry, but I just don't see many and the few that are around are exceptionally difficult to find because of all the noise. If we had taken the kind of line taken by various players out there providing advice and services in this market - bloggers, summit organisers, "DD providers" etc - I've no doubt we'd have a lot more members with a lot more active discussions. But it would be peddling a lie, AFAIAC. Those players may genuinely believe the line they're pushing and that's their business. I'm sure at least one or two of them know that they're leading people up the garden path but they continue to do it because it's profitable.

    I'm a little surprised to have been told that some of us are missing the point.
    You're still missing the point.

    Most MFFs are a bad investment, especially for newbies, but they're not 100% bad nor are they 100% fraudulent. Some of us have posted in this thread to describe those rare occurrences when there is some possible value in an MFF.
    My contention is that 100% of MFF listings from career sellers are fraudulent in some way or the other. That's not the same as every MFF site from those sellers being 100% fraudulent. A listing that has several elements of fraud may still have an element or two - like the domain name in crabfoot's example - that an experienced buyer is interested in ("a bit of good"). But the experienced buyer's interest in a particular element does not make the listing less fraudulent or less dangerous to someone who doesn't have his experience and expertise assessing sites.

    If you're saying to newbies that MFFs are usually a bad move, then I'd agree with you wholeheartedly. But that's not the sentiment in this thread. It's the negative "run away from this" attitude which IMO is misleading. It's like dumbing down the rules to suit the lowest common denominator.
    My advice to newcomers is to run away - get the hell out and don't even bother browsing MFF sites being sold by career sellers. If your take is different, Kay, what advice do you have for these newcomers to filter these sites?
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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