Being in the Ecommerce business game myself I am always looking around at other businesses to see how they tick. By looking at them, ideas are spawned for me that help me change and grow. A lot of times you can find good deals in business from people that are giving up due to frustration or they have another project to pursue. Of course there are the people out there that are selling total junk. A lot of the time you find the junk for sale on Ebay in the websites for sale or home based businesses for sale section. This is unfortunate since Ebay puts so much money into marketing their site deeply throughout the internet. But someone has figured out that they can find someone who is unwilling to do their homework and make a bad purchase. I am NOT saying that all businesses for sale on Ebay are bad, in fact there are a lot of very good businesses that are marketed their. What I am saying is that you should do your homework. I am going to attempt to walk you through this sample site for sale and talk about it and give you some ideas on what to look for. In my opinion most of it is common sense mixed in with a little knowledge of what to look for.

I have highlighted the points I wish to elaborate on and I have also labeled certain areas with a callout balloon for your reference. Let's dig in and figure it out.

First of all you will notice that this site is advertised with a $1 starting bid. Right away you think something a little fishy is going on with this particular tactic. Maybe the seller is trying to save money on the insertion fee or to generate excitement. But this is a heck of a chance to take if he does not get many hits to the ad and ends up selling it for $10.

A

The first paragraph is somewhat confusing in regards to what he is selling. I am inclined to think that this site is part of a series of site which confuses me as to how much this site actually makes.

B. This website will make you mighty rich. This sentence is highly suspect. Anyone claiming that you will get rich by buying what they are selling is usually full of it. If its such a great money maker, why is he selling it?

You cannot go wrong. Well in the business world, things change that can put you out of business. There are so many parameters that you have no control over. Google could change something in their ranking algorhythm and the next thing you know, you don't exist.

Over 600 current customers. Is this 600 transactions or 600 repeat customers?

C. This site sells about 800 different products. Yes it does and that is a problem. In today's market you have to cater to a niche specific market. The days of trying to carry a little bit of everything do not work in general and definetly don't work for someone new to the industry. Walmart carries a little bit of everything, but their business plan allows them to dominate and you would never have a chance at being "mighty rich"

It is no risk, and that is how 90% of the products are sold on the Interent. This statement is not factual. It may be more correct to state that 90% of all new businesses in the ecommerce field tend to start drop shipping style businesses.

D. The author is really a middle man for someone who imports products. By the way, none of these products are unique and all are easy to get. Because of this fact, everyone carries them, because its easy. Easy and "mighty rich" do not belong in the same sentence.

E. The words NO inventory, no worries actually worry me. This means that he thinks that the lower margin strategy of drop shipping is better than inventory based businesses because its much easier. However when you look at the first sentence you would tend to think that this is a contradiction. "Money just keeps flowing in" People have a hard time selling profitable businesses, and if they do sell them, they don't risk selling them for a dollar. So ask yourself this, how much money is he reffering too? It could be a dollar or it could be much more, the exact amount is a mystery.

F. The next part is a disteration on how your potential customers are depending on you to be in business and provide the service. They are counting on you. I can almost hear the music as this really is pretty tacky. This is business, not sentiment. Do a good job, offer a good product at a good price and you will be successful if you rank well and have a lot of traffic.

G. Two hours a day? I would say any decent business doing decent quantities requires a full eight hours or even more a day. I never have enough time in the day, ever.

H. There is no phone number listed on the site.

I. Three competitors. There are much more than three. The real issue is not price. The price that the customer pays is not the determining factor at all in the value of the business. The real issue is margin. Margin is everything. If he gets a decent margin than his profit is based on that, times the number of sales he makes. Drop shipping sites are notorious for having low margins. If you have a good wholesale source it can make your margin good. Most sources have lousy prices because they make retail sales as well. In essence they really are not wholesalers they are in the same business as you, your competitors. If they raise their prices, you have to as well. This is where it comes in handy to have more than one inventory source.

J. Three places to advertise but he cannot reveal. I have serious doubts about that. If the return on investment is that high, why are you selling? (again the red flag)

K. Two hours? If I sold my business today, I would need to give the new owner at least a month of full time help. If only two hours will do it, then the business plan is mighty thin. There are so many variables to an ecommerce store that you have to get right; two hours would not even be close to work through anything that is remotely important.

Paypal and a merchant account.

Paypal is a merchant account.

Question and answer

Hosting is $14.95 per month I would tend to suspect that this is the real reason for selling the site.

L. Business valuation is a tricky thing. There are several real variables out there that can assist you in finding the value of a business. Most can be argued about and if you ask ten different people you would get ten different answers. The bottom line really falls down to revenue. Most businesses are valued by assigning some multiplier times revenue. In drop shipping scenarios this can be somewhat hard because people are interested in margin and that is quite different than revenue in the drop shipping sense. You would have to add some value of intellectual assets and the links that the site has, the content and the time that it has been in business. In order to command a high selling price you have to prove to a customer that the site is worth it. You do that by having a reviewable business plan, a detailed revenue chart, statistics on traffic and conversion. None of this is mentioned and thus raises a red flag. Instead he would seem that he is plucking a number out of thin air. This number contradicts the starting offer on his auction. He would command more respect for the ad if he had a high starting bid, thus indicating that he wants serious bidders only and that he has a respectable well documented business. Then there is the word "could" I could be better looking and have a full head of hair, but I don't think that is going to happen.

M. Why is this number different than the other numbers?

N. Template built? I think so

O. Earning Potential. The word potential is almost as dangerous as "could"

Looking to the left you will notice that none of the products are related. This is hard to rank for when you are trying to assign keywords to your page. I would have to bet a sizable amount of money that if you asked the seller if Google ranked pages or websites he would say websites. Google ranks pages.

A. Why in the world would you put Google Adsense on your product pages and risk the fact that someone might click off of your site and go buy from your competitor?

Page rank of 2 after two years. After two years you should be doing much better than that.

Here is a sample list of products from the tools section. These particular tools are the typical importers offerings. They have no brand name and are super inexpensive. Often times you can buy them by the pallet and you can get them anywhere. I could build this site in a couple of hours for nothing and stock it full of all this type of products. I would not even bother to spend the money to optimize and link it because its soooooooo general and just like everyone else, why bother?

The last picture talks a little about SEO. It shows that there are 23 keywords in the meta tag description. This is way too many and shows that the owner does not really want to stand out in any one specific market. Although he may sell some items, this is not a good long term plan. In the end it will only frustrate you. On a good not, he does have links to the site.

In summary, I would not recommend buying a site like this for beginners. About the only value the site has is the links and the fact that its two years old. Both of those factors are not that motivating.