It’s time to buy. Or maybe, it’s time to sell. No matter which position you take in this website flipping business, you’ve got a lot on the line. If you’re the seller, you need to know that you’ll be paid–that the purchaser’s money is good and will stay in your account, no charge-backs or refunds in the offing. If you’re the buyer, you need to know that you’re getting what you paid for and, if there are any problems, you’ll be able to resolve them satisfactorily. You’re both dedicated to pursuing your money making ideas, and they’re not cheap. An online escrow service could be the perfect way for both of you to protect your interests.
What is Escrow?
You’re probably familiar with the term “escrow” from your mortgage. In this version, a portion of your house payment is held apart in a special account to insure that your insurance and property taxes are paid. In other instances, an escrow account can hold a deposit or a payment, until all parties are satisfied, upon which the money is released. Auction sites like eBay employ escrow to hold the purchase price until the goods are received, upon which time the money is given to the seller. Online escrow services are ideal for big-ticket items where no one can afford to lose–expect to see them in sales involving cars, jewelry, domain names and, yes, websites.
How Escrow Works
Escrow is a very simple process. Once buyer and seller agree on the terms of the transaction, the buyer sends her payment to the escrow service, which makes sure it’s good, and then holds it in an account. The escrow service then tells the seller to ship the product and provide the tracking information. Once receipt is verified, the buyer has an “inspection period,” often two weeks, during which she can decide if she is happy with the purchase, and either accept or return it. After this period passes without complaint, the money is released to the seller, and everyone is happy.
Escrow Benefits for the Seller
You’ve got a lot invested in your website: the traditional time, money, and labor, as well as your creative satisfaction. With its current revenue, potential earnings, intellectual property, and the money making ideas, like any physical property it’s a valuable asset. Add to this the plain fact that you need your sale profits to reinvest in new sites, and it’s clear: you need to get paid. You may be used to conducting e-commerce on PayPal or a similar site. While these are proven, reliable services, they can render you vulnerable to a “charge-back” scam. In this fraud, you send your product and receive the money, but the buyer opens a dispute, claiming that you sent a faulty product or nothing at all. Unless you sent your website via a traceable package of DVDs, the payment portal is unable to verify receipt or contents, and will often side in favor of the buyer. The money is automatically refunded, leaving you in debt–and without your website.
An online escrow service will hold the payment until the buyer receives your website and indicates, either formally, or by not responding during the inspection period, that she is satisfied. After this, the money is released, with no charge-backs. Escrow also provides the invaluable service of verifying your buyer’s payment. You can very well conduct credit checks on your customers, but that leaves you with the difficult task of trying to vet buyers’ financial responsibility with little information. The stakes are too high for guessing games and intuition; your escrow service solves the problem neatly.
Escrow Benefits for the Buyer
If you are in the market for a website to further your money making ideas, you’re doubtless well aware of the potential pitfalls of e-commerce. You may think you’re buying a quality site with plenty of valuable features, but how do you know what you’ll find when you start downloading? More than one dreamy-eyed web entrepreneur has been devastated to realize that he’s spent a sizable amount of cash on what turns out to be two web pages with some boring articles, non-existent backlinks and no monetization. By using an escrow service, you can be sure that the seller doesn’t get your money until you get your website–and you’re pleased with it. If you’re not, you can return it (and you must return it, with the receipt verified) and get your money back. Both delivery verification and the inspection period serve as security measures that help insure you get exactly what you paid for.
As you look for an online escrow service, make sure you use one with a conflict resolution strategies and arbitrations services. Sometimes, even when both parties are honorable, disputes occur and it’s a good idea to have a neutral partner to help resolve them. Also, as one might expect, escrow scams have made their internet debut. Con artists have been known to set up their own phony escrow sites, which take your money and conveniently disappear. The scheme works just as well the other way, with the supposed payment verification being faked and the money vanishing after the product is received. Take these precautions when you begin to use an escrow service:
- Verify that it’s a real escrow service by calling the contact number. You should speak to an actual, professional person, and not a voicemail or fax machine.
- Don’t allow yourself to be pressured into using a particular service.
- An escrow service will never use Western Union or another wire service. Nor will it ask you to direct your payment to an “agent.”
- A professional service will have a professional site. If the site looks “wrong,” it probably is.
- It’s possible to fake security badges, so examine them closely.
- Google the site, and check it out on EscrowFraud.com
- A real escrow site will not feel the need to include “safe” or like adjectives in its name or domain name. Nor will the address likely end in .org, .US, .info, or anything other than .com.
- Don’t use an overseas escrow service.
- Visit bankrate.com for other information on escrow-related scams.
Finally, as with all high-dollar deals and complex business transactions, it may be in your best interest to retain an attorney to handle the details; this is just one more measure of protection for both buyers and sellers.
Congratulations! You’ve received your first payment–or your first website. You’re on your way to becoming a successful web entrepreneur! It’s time to celebrate–here’s to you and your successful money making ideas!