Ethics Applied – Scammy Sarah Learns a Lesson

Ethics Applied – Scammy Sarah Learns a Lesson

First of all, sorry for the radio silence this week. It’s National Dance Week (yay!) and, as part of that, I have five performances this week, plus rehearsals and classes to get ready for all of them. It’s been a blast so far, but yes – I’m pretty tired right now!!!

However, I did want to take a few minutes to talk to you guys today about something that came up in my Talk Marketing Now chat show this past Monday. As you all know, ethics in internet business is a major focus of mine – both as part of my educational philosophy on this site and on the affiliate sites that I build.

The thing is, though, it’s really easy to talk about ethics in a theoretical way. Like, we can sit around and say, “Of course I’m going to make purely ethical decisions when it comes to my internet business,” but when we’re actually faced with decisions that require us to make these judgment calls, it isn’t always so easy to clearly see what’s right and what’s wrong.

As an example, I want to share with you the story of scammy Sarah and the acai berry…

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Most of you know that I’ve been involved with site flipping throughout my internet marketing career. It all started with the site I sold that launched my article writing agency, but since then, I’ve bought and sold dozens of websites in plenty of different niches. In fact, I still spend lots of time on Flippa keeping an eye out for promising “fixer upper” sites that I can buy and turnaround for a profit.

In early 2009, I spotted a listing that met my criteria for promising sites to buy. It had some traffic, but wasn’t taking advantage of some strong opportunities that I could implement. It had some content, but there was definitely room for expansion. And it was making some money, which shows me that a site is likely to continue to convert once I buy it.

And oh yeah… Did I mention that it was one of those “flogs” (fake blog sites documenting someone’s “experiences”) that were popular a few years ago?

Or that it was promoting acai berry and colon cleanse CPA offers – two of the scammiest products on the market at the time?

(2009 Sarah clearly wasn’t as concerned with business ethics as 2011 Sarah is…)

When I bought the site, it was making around $200/month through these offers, and I got it for around $800 – roughly four times the site’s monthly income, which is a pretty reasonable price. In my experience, sites tend to sell for 4-8 times their monthly revenues, so I got the site for the low end of what I was willing to pay.

I had guessed – correctly – that with some changes to the site’s traffic model, I could get it closer to $800-$1,000/month. It took a little while, but after a few months, I had the site earning at this level. Sounds great, right?!

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Now, here’s the tricky part. If you aren’t familiar with the issues surrounding these products, there’s two big ones – first, that the “free trials” automatically enroll buyers into forced continuity programs that are nearly impossible to get out of, and second, that the companies responsible for these products were notorious for signing people up in other forced continuity programs, based on consent given in the fine print.

So basically, you – as the affiliate marketer – send visitors to these sites, and if they don’t read all the fine print, they aren’t just auto-enrolled in programs that charge $80+/month for products that can be found at any health store for much less, they can also be signed up for similar programs without their explicit knowledge and consent. Pretty shady dealings…

(On a side note, did anyone watch South Park this week? Pretty weird episode, but the same basic premise…)

Now, you can argue that it’s the responsibility of the visitor to read through the fine print of any offer before clicking on the “Sign Up Now” button. You can even convince yourself that putting something like, “For best results, use these products along with a healthy diet and exercise plan,” alongside your banners or text links is enough to say that you’re being reasonable and encouraging healthy behaviors.

But I’ve got to tell you, it’s still hard to deal with the fact that you’re profiting off of people who are seeking an easy solution to a common problem and getting scammed in the process.

That said, it still wasn’t an easy decision to sell the website. Scam or no scam, $1,000/month puts a lot of groceries on the table. And while I’d like to say that the decision to sell the site after three months was motivated purely by ethical considerations, there were a number of other factors that made it advantageous to get out of that market (ie – increased media scrutiny, truth in advertising legislation, etc).

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As far as site flipping goes, the project was a definite success. I sold the site for $4,000, which recouped my initial investment and put a healthy profit into my bank account. But to this day, it’s not easy for me to justify the fact that that profit came from the dozens of people that I knowingly sent to buy scammy products.

Now, the moral of this story isn’t that you shouldn’t promote CPA offers – it’s that you need to get comfortable with your own ethical limits. Personally, I can’t stomach sending people to that particular type of offer, and for my own mental health and sanity, it’s important for me to promote affiliate products I believe are ethical. If you don’t have an issue with these CPA offers, that’s entirely your own business, and I’m by no means trying to say that your moral compass needs to match up with mine.

But in most cases, finding those ethical limits can be tricky, and it’s often a process that only happens when we unknowingly stumble across that line.

So my advice to you is this – listen to your gut feeling and trust yourself to make good choices for your internet business. You may not always get things right on the first try, but at the end of the day, you’ll find that running a business you can be proud of can be both profitable and tremendously rewarding.

Have you ever been in a situation that compromised your ethics or helped you to figure out where your own ethical limits are? Talk about it in the comments!

Image: Steve Snodgrass

10 Responses to Ethics Applied – Scammy Sarah Learns a Lesson

  1. Sarah,

    I’m shocked! Shocked, I say. Although it might seem odd to say it, it’s nice to know you have some clay on your sandals. 😉

    I have a sense that my ethical limits may be a bit farther afield than yours, but I have to agree with you on this one.

    Even more damaging is that these types of scams often target those least able to afford them. I think “ethical marketing” is all about empathy.

    Dan

    • Sarah says:

      Dan – Thanks for the comment 🙂

      And like I said, my goal isn’t to make everyone share the same ethical values – just to have everyone be aware of the implications of some of the things we take for granted as status quo in IM.

      Very few things are wholly ethical or wholly unethical, so it’s more about figuring out what you’re comfortable with.

  2. Howie says:

    Your WSO is still in my cue to be read, Sarah. I’ve had some military training requirements that have taken precedence.

    From an ethical standpoint, I’d be interested to hear what you think about my last blog post. Needless to say, I’m not making many friends online because of it.

    • Sarah says:

      Howie – No worries on the WSO – military requirements come first 🙂

      Anyways, just read through your post – quite a thesis! I have mixed feelings on it, and here’s why…

      Maybe it’s being jaded after a few years working online, but I operate on the basic assumption that everyone’s lying. Whether it’s on their income claims, the techniques they’re using – maybe they’re only lying a little (or maybe they’re lying about everything), but I assume that even people like Pat Flynn aren’t 100% truthful.

      So, for me, the question isn’t “Is it wrong to lie?”, which is irrelevant if everyone does it, but instead, “Does it matter?” If I learn useful techniques from the info Tyrone puts out that help me grow my business, does it matter if he’s lying about his own success?

      Lying on that level isn’t something I’d be comfortable with, but I don’t have the time or energy to police what other people are doing. I don’t agree with using falsified claims to sell products (especially expensive courses), but I also don’t know whether the content in that course is worth it or not (lying non-withstanding).

      At the end of the day, yes, I wish we could all behave in an ethical manner, as that’s obviously something that’s important to me. But I also don’t feel like Tyrone, Pat or Yarik owe me anything for engaging in deceptive behavior or implicitly endorsing them.

      We’re all responsible for the business decisions we make, whether that’s the actions we take to grow our own websites or the products we support with our dollars.

  3. Jon says:

    Sarah,

    Lesson learned. That’s it. It’s in the past now and you know how those tactics and topics make you feel. Now you are sharing from a perspective of experience not simply theorizing and suggesting we “don’t do this or that” based on opinion.

    So, thank you. It’s important to know where we draw our line and to strive to uphold our values in every decision we make.

    Scammy Sarah Taught Us a Lesson 🙂

    -Jon

  4. Perhaps it’s not quite as scammy as acai berry, but I still worry a bit about promoting Clickbank products that I’m not really sure are great products that I’d actually recommend. Some affiliate marketers defend this by claiming that any buyers can easily get a refund if they don’t like the product they buy. I’m sure this is true, but I still have reservations since I think it’s unlikely that unsatisfied buyers will always seek refunds. Do you have any thoughts on this? (apologies if this is already answered elsewhere on your blog).

    I’m really enjoying the content on here, Sarah! It’s nice to hear a fresh perspective on online marketing.

    • Sarah says:

      Jeffrey – Thanks for stopping by and commenting!

      You’re right that Clickbank products vary *hugely* in terms of quality. There’s some good stuff on there, but there are also POS products.

      If at all possible, try to get a review copy of the product. Some Clickbank merchants will give you a copy for free as an affiliate, or if it’s something you’re really concerned about, it might be worth it to purchase your own copy to review.

      Yes, it’s true that Clickbank buyers can get a refund easily, which does make it less of an ethical issue in my eyes. The thing I’d be more concerned about would be the loss of potential repeat buyers. If you promote a crap product, you lose authority in their eyes, which will kill future product sales.

      Just my thoughts, of course 🙂

  5. Pawel Reszka says:

    I couldn’t resist to comment on this post. I have quite an experience with these offers from 2009. The problem is: Who do we blame for this entire fiasco? The CPA networks that were encouraging affiliates to sell these offers and even providing these fake blog templates(you bet they did), or the affiliate who didn’t really know the laws and that these companies were taking their customers for a ride?

    I still remember when one network offered me free flog style sites and other affiliates’ traffic sources if I just redirected my clicks to their offers. It’s a cut throat business for sure.

    • Sarah says:

      Yeah, it was crazy for a bit – that’s for sure!

      As far as blame goes, though, I think that we can only really be responsible for our own actions. I can’t take the blame for companies putting out unethical products or consumers not reading the fine print closely enough, but I can hold myself accountable and decide whether or not that’s the kind of activity I want to be involved in.

      But then again, that might be why I’m not a mega-millionaire sitting on a beach drinking mimosas, so take what I say with a grain of salt… 🙂

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