

Ask HN: How to perform due diligence on an affiliate website? - dglass

I&#x27;ve found a website seller that&#x27;s listed an affiliate site that I&#x27;m considering purchasing. I do not have any experience in affiliate marketing but I&#x27;m a seasoned software engineer that&#x27;s been programming on the web for over a decade. I can think of ways to improve the site in the future to hopefully grow the monthly revenue that&#x27;s already being generated.<p>I&#x27;d like to know what I should be on the lookout for though when doing due diligence. Aside from the obvious things like verifying existing revenue and traffic metrics, how would I determine potential threats like other sites in the same niche, future threats, making sure existing revenue does not dry up, etc.<p>Sorry if it&#x27;s a bit of a naive question. Just looking to get opinions from the HN community. Is anyone else doing affiliate marketing? If so, what has your experience been like?
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justingilchrist
I think first you need to separate doing an Assessment from doing Due
Diligence.

The Assessment looks at things like

\- The domain (does the seller actually own it, can you legally own it - for
example .au domains require an Australian business licence)

\- The site itself (is the copy unique, are there any violations of Google's
Webmaster guidelines, does it rely on any third party apis etc)

\- The traffic (where does it come from and in what proportions, how dependent
is the site on search, which sources convert, how sustainable are they etc)

\- The revenue (can the revenue sources be transferred - e.g. Paypal recurring
subscriptions can't, does the seller have a special arrangement with the
merchant / affiliate network that you won't have access to etc)

\- Operational Requirements (what are the costs / responsibilities / resources
that HAVEN'T been disclosed, how much non-accounted for time (seller's time
usually) does it take to run the business)

\- The Seller (what else do they own, do any of these properties potentially
compete, do any of these properties contain useful backlinks to what you're
purchasing etc)

Due Diligence then covers verifying the information you have been given

\- Does the actual monthly revenue for the last 12 / 24 months accurately
match what has been claimed in the P&L \- Can you prove the transactions ONLY
originated from the site being sold \- Do the customers seem unique and
genuine \- Is the traffic genuine and spoofed \- Are the mailing lists genuine
and in good health \- Are any supplier / contractor agreements in place \- Has
the business submitted tax returns? In the likely event they don't match the
P&L, why?

I've massively oversimplified both processes and doing them properly is more
than a Hackner News post could cover. You can have someone do it for you
professionally ([https://centurica.com](https://centurica.com)) or you can go
down the DIY route ([https://exitplan.co](https://exitplan.co)).

