Negotiations for Website purchase

I need some help! I would even be willing to hire a consultant, if anyone has any suggestions where to find one, here's my issue"

I'm in negotiations to buy a website for a significant amount of money. The site is www.thekingofenergy.com. The site generates about $12,000 per month, with net income of about $8,000. (affiliates get about 30%) The seller has answered most of my questions, and seems to have the right answers. He has given me access to his automation account to view the sales data. The only this that worries me is that sales for the last two months are down from the average. He claims traffic is 90% affiliate generated, so little to no marketing is required.

Here's the listing http://www.websitebroker.com/site-details-999962509.html

I'm looking to make sure that this is a legitimate site, and to protect my self.

Any suggestions for questions to ask, contractual language or anything that I can do to get more comfortable with this sale. The seller is from Australia, if that matters.

Thanks

 

I would recommend meeting up somewhere in person for a purchase of that size.

 

You should also look at the traffic log files on the server. Verify that the referring affiliate URLs are there and take a look at how they are promoting the ebook. Make sure these have not been incentivized sales such as the affiliate giving something illegal in exchange for buying the ebook.

It is also common to require that your own tracker be placed on the site for a number of days (Google Analytics, StatCounter, etc...) that only you have access to.

In the contract you want terms that require that the reported traffic and sales figures are accurate. Include this specific data in the contract.

Contact whoever is processing their payments and ask them to verify that the account is in good standing and that nothing looks unusual.

When you say that little to no marketing is required because it has affiliates, realize that instead of marketing the ebook you will instead be marketing the affiliate program to webmasters. So this isn't an automated money machine that you can just let sit there and think affiliates are going to appear and do all of the work for you. If you stop marketing to affiliates, the site will slowly die as they stop promoting it.

Ask him how he recruited his affiliates, and make sure you feel comfortable continuing that process. Is he willing to halt all communications with existing affiliates after the sale? You don't want him to email them two minutes after the sale saying "I just sold thekingofenergy, but I have another one you can promote at ___.com."

 

Try using a revenue guarantee clause in the agreement or incremental payment once your revenue is flowing. 25% upfront, 25% after a month etc.
If the cash doesn't flow, you are liable to get a refund