There are many website auction places online today each selling hundreds or thousands of sites. Usually the owner of the site will post traffic figures or show graphics of revenue for the last month or two and post an asking price in the hopes that someone will buy it. However, some of these numbers have been artificially inflated for the last month or two to drive a higher asking price and others are outright fake. This article will help you get the facts and determine if a sale is legitimate or not or if you are just being scammed. It will mainly focus on arcade sites(as that is generally the niche of sites I work with and seen many shady sales for), but can be applied to other Niches as well.
The most popular online website auction site is Flippa, but unfortunately as I've seen, its also where the most scams take place. For many of the auctions I have seen, Flippa does nothing to monitor or scrutinize traffic numbers or revenue numbers that the owner puts up, and as a result, many I have seen in the arcade site realm can be easily determined as fake. Thus, the first step is never to buy or bid on a site at Flippa without doing lots of research first. The best thing you can do is go to a community like talkarcades(for arcade websites) and ask experienced members there what they think of a certain sale. Many of them will recognize scam seller on sight and prevent you from making a bad purchase. Secondly, Alexa traffic ranks are a good tool to determine if a potential sale is a scam. If a site's Alexa rank is above 500,000 and they are claiming to be making thousands of dollars(or even hundreds) per month, then they are probably lying. These are two easy checks you can do to protect yourself. Beyond these two steps, there are a number of more technical steps that I will explain below to protect yourself.
You must look closely at the screenshots of revenue(whether they be adsense or some other source) that they give. Fake stats will look much like real screenshots but they usually have at least 1 small flaw in them. There might be too much whitespace between 2 stats or a column may be aligned completely right. Sometimes you really have to look and ask other people if traffic and revenue stats are legitimate.
If monthly revenue stats look to be legitimate, then you should ask for a history of at least the past 6 months of stats and revenue. Ask specifically for traffic sources. If the seller bulks at this request, do not buy the site as he has probably just inflated his stats for the last month or two to get a high sale price. When you get the stats, looking closely at this for tell-tale signs of large amounts of traffic being bought. Sites with a large amount of non-organic(bought traffic) are simply not worth that much. Some signs of bought traffic include erratic fluctuations on a day-to-day basis for traffic and traffic suddenly peaking in the last month or two. You should also ask for what search engine keywords are major sources of traffic for the seller and how much each word gives.
Erratic fluctuations in day to day traffic is an easy sign that the traffic is not organic at all. Most larger sites don't have such fluctuations. The one exception is between weekdays and weekends where traffic might swing a legitimate 30-40% or perhaps more(if its one of those sites that focuses on school traffic). If you see erratic swings within a week and from week to week not following a more-or-less constant pattern, the seller is probably injecting and buying traffic on certain days to make the stats look better. If traffic has been somewhat steady but has suddenly increased several hundred percent in the last month or two, it is also a sign that the seller is fluffing up the traffic to get a higher sale. Do not buy these sites.
Search engine traffic is the best source for organic traffic and probably the most wanted type. If a site does not have much search engine traffic, its value decreases dramatically. If your seller refuses to give you this information, do not buy the site. When he gives you this information, double check it yourself on Google. If he claims that he is getting 1000 visitors a day from a certain keyword but you don't find him on the top page of results for that keyword, he is probably lying. If he tells you that he did have page 1 results for certain keywords a while ago but doesn't have them anymore but its only a matter of time before the site gets the keyword back, don't believe him. There is a good chance that his site got penalized or more likely Google just recognized his link-farming ways and discounted those links. Either way, the site will not be getting the keyword ranking back and therefore you should not waste the money. Be sure to research and check carefully that all his search engine traffic claims are valid.
In conclusion, do lots of research and ask around in communities first before making a purchase. Try to buy sites with lots of validated search engine traffic and other organic traffic that has been validated to avoid being scammed in a sale.
Archbob, owner of Flash Games and Tower Defense