September 23, 2019

Domain Name Investing: Invest in Premium Domain Names

written by

Joe Uddeme

Joe Uddeme

Domain Name Investing: Invest in Premium Domain Names

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There’s more to a premium domain name than a high price tag – a great one can accelerate business growth and promote long-term financial stability. NameExperts.com Director Joe Uddeme explains why landing a beauty could be essential for your company.

 

Here’s a question for every company to tackle. Small businesses and startups in particular need to consider if it is worth investing a quarter of their funding, say, on a premium domain name rather than better office facilities or company cars.

The answer to that question is seldom simple. That’s because it is dependent on the kind of business the domain name will be used by, together with a number of other aspects.

A domain name is critical because, quite simply, you can’t run a website without one. It will be the title of your site and email – and will play a crucial role in your marketing strategy once you’ve purchased it.

In this guide, we’ll study everything there is to know about premium domain names so you can decide whether you should buy one for your business.

Even if the name you want ends up costing $10,000 or more (LOTS more, in some cases), it might prove to be one of the best investments you make for your company.

Two rolls of dollar bills on white table to denote high cost of premium domain names

 

When is a Domain Name Considered a Premium Domain?

The process of buying domain names usually involves several disappointing moments. Such as when you first think of an especially excellent name… only to search for it and discover it was bought in 1999 and is currently up for sale for $100k.

The crazy thing is, these domains do nothing special. There’s no rocket science involved with coming up with them – which is kind of the point. Premium domain names with a high price tag are familiar-sounding and catchy. Everyday words. It’s why cars.com sold for almost a billion dollars.

A great domain name will help your site gain more traction much faster – and will prove to be one of your greatest investments if you have chosen wisely. This is the reason why a domain becomes a premium one.

 

The Precise Definition of a Domain Name

The cost of a domain name will give away that it’s a premium one. Usually, a regular premium domain name is a domain name that is already owned by a registry or a person. If you want it, it’ll cost you.

The name’s costs are exponentially higher than a typical domain and can vary from a few hundred dollars to millions. This is because of the perceived value which it might have for a company within a particular industry.

In order for a name to achieve a high sale price, there has to be somebody who believes it is worth it. Until a domain name is sold, technically speaking it is worth virtually nothing. Try getting a million bucks for a domain name if the internet permanently goes down!

A domain name is considered premium due to its brandability, keywords and overall desirability. All these are highly valuable for a business that wishes to branch out on the internet.

Not every premium domain price is set by a person. On occasion, the relevant registry (such as .info or .design) sets the cost for this.

 

The Potential Problems With Choosing a Not-So-Premium Domain

There are a few issues a company might run into if they don’t choose the best domain name they can. Here are the main difficulties:

  • Trust and Branding Issues. Often, having a .com domain is the best way to show that a company is serious and trustworthy. A good deal of experts say to always go with .com, but there are lots of other options too, including .org, .co and .io. A trusted domain name consultant can guide you on the best choices here.
  • Little Potential to Grow. When you’re stuck with a lemon, you can limit your business opportunities. Numerous businesses end up thriving after purchasing a premium domain name for around $500,000, particularly if it matches with their institution’s name.
  • It Might Confuse the Client. If a business opts for an inferior domain extension, they may lose lots of customers. Some of these would-be visitors might believe the support is down or that the site doesn’t even exist because what they have actually done is visit domain.com rather than your site – domain.co.

Cute puppy dog looking confused

How a Premium Domain Name Can Help Your Website

The fantastic thing about ultra-premium domain names is the fact that they are pretty much household names – so you don’t have to make additional investments in making them known. As a result:

  • You’ll have to spend less money on internet PPC advertisements. Why? Because you are going to get organic visitors to your website as soon as you’ve launched it.
  • You’ll enjoy better SEO and site rank – resulting in more traffic. Individuals are already searching for your website and will be glad to find it.
  • There are more trust and authority involved using a premium domain name, which will make reliable companies link to your site. This can further boost SEO.
  • A short, catchy name functions really well on social media and people will remember it.
  • The domain will provide prospective clients with a strong indication about what they will find on your website, so you don’t have to invest money and time describing it to them.
  • Simply speaking, it is much simpler to make a premium domain popular. You’ll have to devote a good deal less money on advertising it.

Summing up

If you’re doing business in a market where word of mouth is essential, than premium domains are definitely something to consider – whatever the cost.

Not all small business owners and startups, however, should start with a premium domain name. A business can definitely be effective with a less-than-perfect domain name if it is catchy enough.

If the domain name you’re considering matches your branding, sometimes that is all you’ll need. It can work well even if it doesn’t match your business’s name.

If you can’t get the .com extension you want, it is possible to go with .co, .ai or many other top-level domains (TLDs).

But when you start to hit it big, securing a premium domain name could be a very wise move – because there’s a high possibility it will pay off handsomely within the next few years.

 

About the author

Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

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Always be sure to check out a .com’s history before buying, though – there could be some nasty surprises if it has been used before. Professionalism: Many well-established businesses, particularly in competitive industries, prefer .com domains. If a competitor has the .com version of a similar name, they may be seen as more professional or legitimate than a business name using a less common extension. Having a .com gives you an edge in appearing professional and trustworthy. Versatility to Ensure Growth Future-Proof: As your network grows, the .com extension is flexible enough to accommodate expansions into new products, services, or geographic markets. Unlike some niche TLDs, which may be associated with specific industries (like .tech or .store), a .com can grow with your entity and remain relevant in any market. Resale Value: Premium .com domains can become valuable assets if your organization is ever sold or merged. The high demand for .com domains, especially short, brandable ones, means they often increase in value over time and make them an easier sale for the seller in a reasonable range. Some names exceed all expectations, however, and command seven-figure price tags or higher.   What other TLDs Are Good Options? Clients ask regularly if there are decent top-level domain alternatives to the .com for transfer. There are many, including .org, .net,.co, .io, .ai, .xyz and .club domains that a degree of power and authority. Top Extensions: These extensions are popular for use in the crypto and web 3 space. There are many organizations that capitalize on the generic value such as the banking industry with the .bank top-level domain. With more than 2,500 new GTLD domain extensions, you can now register and transfer anything from .legal to .car for your business, which is worth knowing if you’re securing a unique domain name for a startup in particular. Here are a list of some top extensions and how they’re often used: .ai: artificial intelligence, machine learning support, reasonable renewal cost .net: internet infrastructure sites, more technical, fairly reasonable renewal cost .co: abbreviation for commerce, corporation and community .org: non-commercial org and non-profits .io: tech sites, business or commercial use support You definitely don’t need to use a website builder for every domain name you purchase. Make sure you forward any additional domain names you register to your primary site and add a secure server to protect your organization. The .com Domain Should Be Your First Choice When we talk about long-term investing and ROI, we think about the stock market, commercial or residential real estate investing, gold bullion and Forex – but domain investing is a legitimate business pursuit, too. Domain names hold value and add instant equity to the branding strategy and ownership in the purchase and sale of domain names. There are hundreds of thousands of prime opportunities to invest in the domain space – and as the last 30 years have shown, the .com is the most credible TLD on the market, both domestically and abroad. This holds true if you are buying your domain for your business or to hold and transfer at a later date. Whether this is your first domain or you own many, the .com creates easy accessibility for consumers and brands alike. Brand Protection: Companies work hard to protect their domain brands, accounts and marketing tactics. They invest millions of dollars and countless resources at building that beach-front real estate and maintaining their Internet presence in the world. As leaders in the domain space, the NameExperts.com team continues to recommend the .com as the superior domain with considerable upside and long-term equity potential. Case Study: Tesla.com domain acquisition Here’s a case study of a .com domain acquisition transfer that highlights the importance and benefits of acquiring a premium .com domain for a business. The study involves Tesla’s acquisition of Tesla.com. Background: For many years after its founding, Tesla, the electric vehicle manufacturer, operated under the registered domain TeslaMotors.com. Despite its growing success, the entity didn’t own the highly sought-after Tesla.com domain. TeslaMotors.com was functional, but having Tesla.com would better align with the company’s image as it expanded beyond cars to include energy products like solar panels and batteries. The domain Tesla.com was originally owned by a man named Stuart Grossman, who had registered it long before the organization existed. Grossman wasn’t actively using the domain, but he also wasn’t interested in selling it easily, making the acquisition a challenging and lengthy process. The Acquisition Process: Need for Rebranding: As Tesla grew and became a household name, the organization realized that TeslaMotors.com was limiting its branding. The “Motors” in the domain name suggested a narrow focus on cars, whereas Tesla’s long-term vision encompassed energy solutions, solar products, and batteries. The organization needed a simpler, cleaner domain—Tesla.com—that reflected its image as a leader in the broader tech and energy sectors. Complex Negotiation: Elon Musk, Tesla’s CEO, revealed that acquiring Tesla.com was a difficult process, taking over 10 years of negotiations. The domain owner, Grossman, was reluctant to sell the name for many years, leading Tesla to offer a significant amount to finally secure it. Musk later hinted that they had paid $11 million to acquire the domain, though exact figures weren’t officially disclosed. Hands-on Approach: Tesla’s approach to acquiring the domain involved: Patience: Tesla waited until the domain owner was ready to sell, all while continuing to build their company. Persistence: Tesla remained in contact with the owner over a long period, signaling ongoing interest and ensuring the owner knew they were serious buyers. Strategic Timing: Tesla finally closed the deal when they were ready to reposition their entity from just a car line to a broader energy and technology company. Outcome: In 2016, Tesla successfully acquired and completed the transfer of the Tesla.com domain and immediately rebranded their website and digital assets. This acquisition allowed Tesla to secure its concept and image across all its product lines and simplify its online presence and customer support tools.     About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Joe’s specialty is helping clients secure .com domain names that appear unreachable – and at the right price, too. Contact Joe at: [email protected]

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