Bought a site, got scammed

[Antti]

"Learn the basics of the industry".

I think this is suitable section for this thread...

I have a quite a long story which I would like share to fellow newbies so you won't repeat my mistakes:

I bought a site recently, but the transaction didn't go quite smoothly as I would have expected and got scammed at the end. I still have to point out that the site itself is good and I'm happy with it.

However, the seller was from hell and I was thinking of backing out many many times due to him being an asshole. For example, he had a competing site which I found during due diligence. But I'm confident to see ROI on this one, so I bought the site anyways. You could say I'm greedy and maybe got what I deserved.

Originally we settled for 12x valuation for it and I sent the funds to Escrow.com. Just when the money arrived, traffic got huge spike and the seller wanted to increase the price to 15x. I was of course very pissed about it, but thought the price was still acceptable. I paid with Paypal, which in retrospect was a serious mistake as I didn't trust the seller one bit. I just thought that I could use Paypal's Buyer Protection if something went wrong.

We transferred the site and had a 10 day inspection period. Naturally the traffic increase was just a spike and didn't stick. I said I want a refund for the 3x or will decline the site. Seller accepted this, but said he will return only after Escrow funds were released. I had to agree to this as he definitely wouldn't refund the money if I backed out and I really wanted the site anyways.

You can probably guess what happened after the funds were released...

As it turns out, Buyer Protection doesn't cover business transactions. So I'm starting the recoup period bit behind.

Luckily I got the ad placements optimized for 4x increase in RPM so that helps a bit. Losing traffic to seller's competitor site at the moment, but we'll see...

What I learned:

1) If you discover the seller is hiding something, he's probably hiding a lot more
2) If the seller is selling a site on false claims, he's probably willing to scam you too
3) Never use Paypal for business transactions

Hope this helps!

 

[shiftymcnab]

Unfortunately I’ve been hit a few times from various Ventures using paypal.. What I will say is this. If you use PayPal ensure you have 0 funds in the account and pay with credit card balance. You are better protected and can claw your money back by various different actions. (Many I’m sure know how, but unfortunately scammers also use these safety nets so I won’t put in public for any unsavoury folks to jump on)

 

[Ryuzaki]

I guess you would have listened to the red flags if you didn't know you were getting a decent deal. Even at 15x you've already trimmed the time to being ROI positive down to 4 months? (Unless display ads aren't the only earning aspect). Either way, sounds like you have the skills to not regret this too much.

Yeah, I'm to the point in my business that I won't even accept Paypal any more unless it's with someone I know and trust and for measly amounts of money. It's definitely not worth it at a certain point when the transaction fees start to hit $100's of dollars when a wire transfer might be $15 max.

Even credit card payments are risky. It doesn't seem to take much for a card holder to tell the bank that they didn't make the transaction.

Escrow was there to protect you completely. What you could have done was kill that specific deal and set up another one back at 12x, rather than send the guy extra money.

This was like Lemony Antti's Series of Unfortunate Mistakes.

But in the end you got the site. And since he's playing games as a competitor now, you can just let him do all the keyword research and see which terms he ranks easily for and write for those. You can "outsource" a lot of work to him now as a way of getting some of that lost money back.

 

[Antti]

Thanks for comments, guys. I really appreciate the peer support.

Unfortunately payments were made from debit account, which I believe is not protected at all.

I guess you would have listened to the red flags if you didn't know you were getting a decent deal. Even at 15x you've already trimmed the time to being ROI positive down to 4 months? (Unless display ads aren't the only earning aspect). Either way, sounds like you have the skills to not regret this too much.

I guess that's how it is. High risk, high reward type of situation. In a way I'm playing with the house money as I had funds from another site sale and I'm willing to lose it.

Display ads are indeed only monetization method on the site, so tweaking placements had major impact. However, significant effect on recoup period is only theoretical as I'm not 100% sure I can get the traffic to similar levels / higher as it was when I bought it.

Either way I can probably at least get my money back and break even when I sell the site if I can maintain this level of performance. I'm on -80% ROI after 2 months, but performance is not that steady yet.

Escrow was there to protect you completely. What you could have done was kill that specific deal and set up another one back at 12x, rather than send the guy extra money.

This was like Lemony Antti's Series of Unfortunate Mistakes.

I know and I thought of that, but I was half lazy and half scared I would lose the deal. Costly mistake though. Not going to do it again.

But in the end you got the site. And since he's playing games as a competitor now, you can just let him do all the keyword research and see which terms he ranks easily for and write for those. You can "outsource" a lot of work to him now as a way of getting some of that lost money back.

That doesn't apply completely as the site is about checking player stats on a particular game. In a nutshell, user makes a search on site and the stats are brought using game's API. So it's not a blog and the keyword pool with volume is relatively low.

But of course there's a lot of things I can copy from him and also have ideas for development/marketing which he most likely can't replicate.

Wish me luck!

 

[shiftymcnab]

If your site is about player stats for a specific game you have the whole game and it’s community to lean on. Huge spectrum of topics and traffic generating options.

You can reach out to the top players to do pieces/interviews/game clips of battles and have them do your marketing for you in game.

Sorry went off thread topic there. :/

 

[bernard]

Scammed or not scammed, you bought a site, not the traffic.

 

[Antti]

If your site is about player stats for a specific game you have the whole game and it’s community to lean on. Huge spectrum of topics and traffic generating options.

You can reach out to the top players to do pieces/interviews/game clips of battles and have them do your marketing for you in game.

Sorry went off thread topic there. :/

Hehe, no problem. Thanks for the ideas.

Scammed or not scammed, you bought a site, not the traffic.

I have to disagree. The site itself is worthless without earnings which requires certain amount of traffic.

 

[Saulkaroo]

Whatever has happened, you have got a website. Now, it’s up to you how to use it or make money from it. I agree that you have lost a big amount but what is the benefit of crying? Just make the best use of it, you will surely earn the spend money within a number of days. You can also take help of someone who can guide you the best.

 

[nanexo]

Never use escrow.com either there are various ways in which the buyer can say the site was never transferred due to alteration of data even if you did for a whole site transfer not just domain

 

[en3r0]

Thanks for sharing your adventure. I was similarly burned several years ago. Do your due diligence and always be willing to walk away if things get weird.