Buying an online business website is different from buying some other type of website. When you buy an online business you are also buying existing assets, products, customers, business practices, marketing methods, revenue, social media reach, and contacts. Considering how the “package” you are purchasing is bigger, there are more chances for a seller to rip you off.
If you are looking into how to buy online business websites for the first time you will notice that it is similar to buying an offline business. Consider the differences in buying a restaurant and buying the location of the restaurant. When you buy a restaurant you are getting recipes, employees, and business practices.
When buying online business websites, the website is the building and the online business is the restaurant located in that building. There is more potential for scams when you are buying both the business and the website. These scams are of course different than offline scams. We will go over some practices that will help you safely buy an online business.
One of the easiest ways to trick anyone online is by providing data in the form of screenshots. This trick can be used for any type of information. A seller might send you screenshots of generated revenue, traffic, amount of sales, etc. Screenshots are easily altered in Photoshop and, while they can serve as an initial source of information, you should not base your decision to buy an online business on screenshots alone.
Before deciding to buy an online business website you should request access to Google analytics. This is the only way to know for certain if the website has good traffic. In addition, you will want to check other information that Google Analytics gives you; like what kind of customers visit the website, what time of day do they visit, etc.
If the seller of the business refuses to give you complete access or only offers limited access, they usually have something to hide. Always insist on getting complete access, and avoid buying online businesses from any seller that refuses to grant it.
A lot of online businesses earn money through AdSense. You should check to see if the website has verified AdSense income, or if the seller is just claiming that his income comes from AdSense. If the website is currently not earning money from AdSense you should check to see if it is banned on AdSense. Otherwise, you might later realize that the website is banned there when you try to use the service yourself. If you don’t intend to earn money that way, knowing about the ban is still a good thing as you will be able to negotiate a lower price for the business.
We already said that buying an online business means you are buying all its assets. You should make sure that you are getting all the intellectual property critical for the functioning of the business. It is possible that some of the crucial intellectual property doesn’t come in the package with the business.
For example, the website you are buying might be a single brand from the same owner, and the true reason why people are visiting could be other, more successful brands. If that is the case, buying such a website would be the same as buying a restaurant that relies on the two recipes not included in the sale.
Websites with high revenue might have a lot of hidden costs the seller didn’t tell you about. Even if the revenue is high, the profit of the business might still be negative. You should find out the operating costs of the website. Information that is important here is the cost of the hosting, all the outsourced factors, and how much the current owner pays to the necessary employees. If you are not careful you could actually buy a business that is losing money.
Always find out if the business you are buying is growing. A successful business could be on the market because it has started to decline. Even if the business is currently making a profit you might start losing money in a few years if the business is gradually declining. If the business is growing check to find out what factors are responsible for the growth, and whether or not you can expect the growth to continue. If the business isn’t growing, do the same, because you might have the solution to the stagnant growth of the business. If you can’t sustain the growth of the online business then it’s best if you don’t buy it.
When buying an online business website approach the transaction with the same level of responsibility you would if you were buying an offline business. If you are experienced in buying offline businesses, don’t get ripped off because of your confidence. Tricks and scams that happen when buying an online business are different from those in offline business. Be on guard; research both the business you are buying and the seller of that business. If you follow these steps you will reduce the chances of being ripped off.
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