Shill bidders are a clever lot. They setup new accounts on different IPs. They buy accounts. They ask friends to bid (and they reciprocate the favour when the friend has a domain or site he’s selling).

The net effect of the shill bidder’s activity is that you end up paying a higher price than if the auction was a fair competition among competing bidders. Places like Digital Point, Sitepoint and Flippa seem to make no attempt at shill control. True, they’ll ban you if you try to open another account from the same IP you currently use to sign into their services. But that’s pretty much their own defence. And, let’s face it, pretty useless. We’re talking a webmaster crowd here – people who know their way around using a proxy, people who know how to monitor their IP and are aware when the ISP changes it. If there’s extra profit to be made you can be sure people will try to make it even if the method is dishonest. Bear that in mind the next time you’re bidding – there’s a good chance there’s a shill bidder competing against you.

The latest news is that one of the biggest domain name resellers, Snapnames, has been caught with their pants down. For the last four years or so they’ve had an employee who’s been pushing prices up, causing people like you and me to overpay for our domains … and making Snapnames a huge chunk of extra profit in the bargain.

Unfortunately, many auction sites are designed so that the owner stands to gain if the auction item sells for a higher price. I point no finger at Flippa, I believe they are perfectly honest in their business and above what happened at SnapNames. But, a percentage link between sale price and earnings at the holding company – whether it’s eBay or SEDO – is always going to cause some level of suspicion.

It’s a rough world out there. Take care.

Flippa, controversially, charges a “success fee”. While you still pay for listing a site – albeit, a slightly lower price than before – there’s a hefty 5% success fee (capped at $500). A summary of what has changed is on this Sitepoint thread.

Flippa does offer more filtering options and allows site buyers to specify just high PR sites, low Alexa ranked ones or those selling for more than $10K, for example. There are a few other improvements though it’s hotly debated whether the Web 2.0 look is an improvement on not. The overall Flippa concept and implementation come in for scathing attack in the comments on Flippa’s own blog triggering a frantic response from Flippa that they really are taking feedback.

The name, Flippa, and the overall design and focus of the new enterprise seems to cater for the lower priced-lower quality sites at the expense of the better ones. For example, anyone interested in buying a listed site at the BIN price is expected to complete the transaction immediately via Paypal. All well and good but Paypal has a limit of $10K. It’s apparent that Flippa doesn’t expect to list a lot of websites at above that price point. Interestingly, that’s the price point at which their success fee maxes out (5% of $10K = $500 which is the success fee cap).

What do you think of Flippa?

Added: Snapshot of Flippa page when you click the BIN button

So this begs the question: If property is no longer the solid investment that it used to be, could websites be the new boys in town?

There are of course, many factors at play, but I was recently looking at an apartment in a tourist area in Europe, it cost $200,000

I am told that I could rent that out and if I do it right, I could cover my mortgage.

In other words, I could break even.

Now, on the other hand, I could purchase a large entertainment website which also can be bought for $200,000

However, this site is making $7,000 profit per month.

Let’s assume the mortgage on the apartment is $700 per month, and the re-payments to finance the website are $1,000 per month, that is still a $6,000 per month advantage to the website.

I would love your opinions on this, considering the current climate, if you had to choose, would you rather invest your money into property, or into a website?

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Today we ask the question, would a website make a great gift this Christmas?

The short answer is YES, but, it has to be for a certain type of person.

A good understanding of the Internet is a plus, and the person should have an hour or so of free time per day to work on it.

Also, you should match the topic of the website to their passion.

So, for example, if they love football, you can buy them a fansite of their favourite football team.

How To Buy The Site

There are loads of articles on this site to show you how to buy a website, but the first step is to set a max budget. e.g $500

Then, you wanna head over to a site like Sitepoint.com and use their marketplace to find your site.

You can use the search feature to search for your chosen topics, or you can post a “Want To Buy” post which will request that type of site.

Summary

Buying a website as a gift can be a life changing gift, it can give them a whole heap of new opportunities, and potentially set them up with a monthly income for life.

That said, there are some technical aspects to the process, so consult with an expert first.

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Hub Finder

Hubs are known as authority sites by the search engines. Owning one of these sites can be hugely valuable. But how do you find them?

Simple, use this hub finder tool

Trend Finder

Here is a common scenario. You buy a website because it made $2k per month in the past three months, but now it seems to be making only $100 per month. Why is this?

A common reason is because there are trends in any market, and it is best to be able to detect those trends.

You can use this trend finding tool by Google.

As an example, I used the search term “halloween gifts” and it gave the following trend patterns:

Duplicate Text Checker

Are you looking to buy a website with a lot of content on it?

If so, it is vital that you know whether the content was created, or stolen from another site.

Copyscape is a tool that will let you know whether the site owner has been a bit naughty.

Creative Commons Content Source

Have you purchased a website but it looks kinda plain and boring?

What better way to spice it up than with some images and perhaps a video?!?

However, you don’t have the money to create your own, so instead, why not try using content that is free to use under the creative commons license?

Here is an amazing resource for creative commons content.

Source Viewer

Have you ever wondered how Google views a website?

This tool will show you.

This is vital to check for spam. Especially if you are buying a Wordpress blog, as even the authority sites can get hacked.

URL Research

If you are buying a website, the last thing you want to do is spend the next 6 months fixing problems with the code.

This tool will check the site and give detailed information on a number of key areas.

Will the credit crunch mean that people start selling their websites to raise some money?

Will investors see websites as a safer investment than the stock market?

Put your thoughts in the comments below.

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However, the reality is often quite different, and if you are not careful, you could be left heavily out of pocket.

So let’s get straight to the single biggest danger when buying a fansite:

Today’s news could be tomorrow’s chip wrappers.

Or in plain English, that huge boyband that everyone is talking about, may not even be together in 2 years time.

This means that fansites can be a ticking time-bomb investment… you are not only taking a gamble on the website itself, buy you are taking a gamble on the continued fame/popularity of the tv show, or celebrity in question.

Which leads us to the second major issue when buying fansites…

The Expiry Date

Unlike most other sites, fansites have an invisible expiry date, after this point the traffic will drop to a trickle, and so will the value of the site.

Even huge tv shows like LOST carry an expiry date, afterall, there is going to only be 2 more seasons, so you have a max of three years to make your money and get out… but how can you sell the site when there are no more seasons left?

The result is that you are left with a nostalgia website, and trust me, there is not much money in those. I would much rather have a website on a hot-topic.

The Lawsuit

Owning a fansite can bring a whole host of legal issues… infact, it can be a real minefield.

For a start, today’s celebrities trademark their name, they also have copyright over all logos, images, art work, lyrics and videos. So simply by having the celebs name in your URL, you could be in legal trouble.

If you are lucky, the management team will realise that you are promoting their artist, and they will leave it at that, at worst, you will be taken to court for damages and your site will be shutdown.

Summary

Fansites can be a great way to make money from a subject you are passionate about, but you must factor in the above when valuing a potential investment, and always look for the REAL reason the site is being sold.

Websites are businesses, and therefore require time, effort and resources to maintain.

This sounds obvious, but many people purchase websites with the dream of sitting on a beach whilst their website keeps pumping out money.

Yes, there are a few types of websites that can be automated, but they are few and far between, and even automated sites still require some effort to improve them.

For the other 99.99% of the sites on the Internet, you will need to put aside time each day to run the site. This could be anything from answering emails, being available during server or technical issues, adding new content, creating ad deals etc…

What’s more, unless you are experienced in all of these areas, it may require a LOT of time to complete these tasks.

Of course, you could outsource and hire employees etc… but even employees need managing, and don’t forget that they can eat into your profits.

Our advice when buying a website is to ask the owner for a list of tasks that are required on a monthly basis, and a rough estimate of the time taken for each one… once you have this list, add up all the time and then double it, for a more realistic estimation. If the result is more time than you can spare, then avoid purchasing it.

Remember, what may take 5 minutes for the current owner, may take 50 minutes for you.

An area where I often see this is with blog sales. Often the owners say things like “just 5 minutes per day is required for a new post”.

The reality of course is much higher.

A blog post of any sort of quality is going to take at least 20 minutes, and then you have the process of coming up with the idea for the blog post, which for some people can be a very lengthy process.

So be warned, running websites is a time-vampire, and if you don’t treat it like a real business, it will likely fail.

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When webmasters run their sites through the awesome website valuation report at ebizvaluations, they have the option of disclosing contact details if they wish to be contacted by buyers.

Want to see the latest listings?

Here they are

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