Why are good domain names so expensive?
We are moving quickly away from traditional brick-and-mortar businesses to an online world. You gain a global customer base by having a presence online. Most people now shop by browsing their favourite shops online, they no longer need to travel to the mall. What took an hour of travel and three hours searching can now take minutes and a few clicks. The COVID-19 outbreak of 2020/2021 further confirmed the movement from physical to online stores. Standing out from the crowd and having a recognisable brand is paramount. The number of competitors is growing.
Is Dot-Com still King?
Today there are so many top-level domain (TLD) names but every company needs to own the dot-com. It still holds the number one spot. There are phases where other domains do see a rapid rise, for example, tech start-ups opt for .IO (Indian Ocean), but as the company matures and develops and venture capitalists enter the scene, the search for the dot-com begins. Legitimacy is established with the dot-com globally.
The shorter, the better. One-word short names are the best, two, three letter domains are amazing but over the years the prices for these have skyrocketed. See the list below:
- Business.com $345 million
- Las Vegas.com $90 million
- Car Insurance.com $497 million
- Insurance.com $35.6 million
- VacationRentals.com $35 million
- PrivateJet.com $30.1 Million
- Voice.com $30 Million
- Internet.com $18 million
- 360.com $17 million
- Insure.com $16 million
For the majority of businesses, two-three word domains without punctuation can have a real impact. The prices for these have increased every year. They are considered by many as digital real estate, your piece of the world wide web. A good domain will ensure you will not need, a name change many years later. The price may seem high today but it will be much higher in ten years. Recent examples clearly show that the cost of domains will continue on an upward trajectory.
In 2021, Meme.com sold for $1.25 million, Engage.com $803,025, Bookstore.com $175,000, Bico.com $350,000, Spectacle.com $100,000, VIV.com $129,000 and Weights.com sold for $52000,
Country-specific domains command high figures The price paid for ecommerce.de (German) was $180,880 and FV.de sold for $70,000.
The start-up space is still running up .IO, prices Ledger.io, sold for $120,000.
Brandable domains are also commanding top prices. These are domains that sound like a short one word domain but have an alternative spelling. Newz.com sold for $70,000.
These are, of course, examples of prestigious domains. Other domains two-three words can sell for a few hundred dollars to a few thousand dollars.
Your Start Up needs a name?
Your brand will be built on this name; this is the single most crucial decision you will make. Not every one can name the CEO of Amazon, Apple, Google, Microsoft, but the domain name will outlive them all. The name is your identity; it is more than just a detail. Get the best domain name you can. Invest in the name, so it does not need changing in five years.
Buy the alternatives?
You own the dot-com. You do not want your competitor setting up the same company using dot-org, dot-net ,dot-co, control the space. Some domains refer to the country-specific TLD. For example, in the UK, they use .co.uk; this specifies that this is a UK-based company and has a presence in that market space. However you may still want to own the dot-com. Buying the domain after you have set up and established a business can be very expensive.
There are domains of made-up letters; these are called brandable domains. They have become more fashionable. For example Google did not previously exist as a word, but now it is part of the fabric of our language. Newz.com is a play on News.com, Luxry.com, a play on Luxury.com. However a big budget may be required to get the brand to grow, as people may confuse the website for a similarly spelt website. However with the right Search Engine Optimisation you can really build on a brandable name. No hyphens, numbers or underscores though!
Make sure that no other company already running is using that particular domain name, as they will be quick to sue if you try and benefit from their marketing budget! You can, of course, trade-mark your name once you are up and running.
What to do when the name is taken
Contact a broker to search for the owners identity, then offer them an incentive to sell; it may be an old website no longer in use or a dormant domain. Or find the owners details and send an email. Remember low speculative offers rarely get a response.
When building a brand, remember to take up the social handles on Facebook, Twitter, LinkedIN, TikTok and Instagram. This ensures the brand has legitimacy across platforms.
Registering the domain and renewing the name
First, remember to register the domain in your name or your company name. Many issues will arise in the future if another person owns the domain name of your brand. Second, remember to renew the domain and diarise the date, or you will lose the domain.