Premium domains are domains which are currently registered and available for purchase by their owners. Premium domains have intrinsic value due to their inclusion of clear concepts and keywords that resonate with everyday users.
- The Market for Premium Domains
- What Makes a Domain "Premium"
- Premium Domain Pricing
- Why Buy a Premium Domain?
- Premium Vs. Brandable
The Market for Premium Domains
Every domain name is absolutely unique. Every domain name can have only one owner. And there is virtually no restriction on registering the most domains. Put these factors together and you quickly see that some people will own domain names that other people will actively want. Those buyers are often will to pay premium pricing for domains, and hence the name "Premium Domains".
Domains are digital assets, which makes them very easy to transact. Domain registrars, the companies that hold domains on behalf of end-users offer a robust system for transferring domains from one user to another.
What Makes a Domain "Premium"
There are a number of factors that can add a premium value to any given domain:
- Single word domains that align well with commercial activities usually command very high prices. Similarly, two word domains also have premium values if they are closely related to valuable commercial activity.
- Single word domains that have high branding potential also command premium resale prices. Good examples of these would be a colour or feeling e.g. Blue.com and Happy.com. Learn more about Brandable Domains.
- The domain's TLD (or "Top Level Domain"). The TLD is the extension that follows the domain keyword. In the case of Hazy.com the TLD is ".com". Although .com was initially conceived as the TLD for "Commerce" it has become the de-facto premium TLD.
- Short (2-letter) and 3- and 4-letter acronyms can also command high resale values due to their inherent memorability or general connection with a company name.
- "Exact-match" domains with high search volume generally command high premium prices. An example of this would be CheapCarInsurance.com where the exact match is "cheap car insurance", and the monthly search volume via search engines will be in the 100's of thousands if not millions.
- Domains with high CPC keywords and high number of advertisers will command high resale values. A high CPC and large number of advertisers for any given search term usually indicates very high commercial value. Owning the domain incorporating those keywords can have exceptional value.
- Ease of spelling and memorability are also factors that can add value to a domain.
Premium domains will generally make sense to a large sample of potential customers for a product or service. If your customers cant tell what you do from your premium domain it's probably wrong for you.
The right premium name will help your business stand out from your competition and make it easier to build a brand around your online presence.
Premium Domain Pricing
Premium domains vary is price from a couple of hundred US Dollars, right the way up to multiple millions of US Dollars.
Generally speaking good one-word domain pricing starts from $10,000. 2-word premium domains can start from 2-3,000 USD and go up to 5- or 6-figure amounts. Sometimes even 3- and 4-word domains will command high prices if they have value to a pool of interested buyers.
The general rule-of-thumb is that shorter names command higher prices.
Another rule-of-thumb is that domains that relate well to inherent commercial intent also command higher prices.
As with all rules-of-thumb there will be exceptions!
Why Buy a Premium Domain?
The simple fact of online life is that competition is fierce. A premium domain gives you the following advantages:
- Credibility - if users can instantly identify you and what you offer it makes your site more credible;
- Memorability - premium domains are generally easier to remember;
- Brandability - every business wants to grow their brand, and a premium name often makes a great brand;
- Profitability - most of the biggest and most profitable online players operate on premium domains;
- Investment Security - the price of premium domains has trended upwards over the long term, so your likely to profit on your investment if you sell the domain in the future;
- Competitive Advantage - domains are completely heterogeneous, and once you own a Premium Domain no one can copy it. Competitors can offer substitutes, like other .TLDs, but no one else can operate on your premium domain;
Justifying the cost of a premium domain sometimes puts off buyers. But when viewed in terms of opportunity cost premium domain pricing can suddenly be quite cheap. Compare the cost of broadcast advertising or competitive CPP marketing with the benefits of free type-in and search engine traffic, and very soon the ROI on a premium domain can be exponentially higher than other marketing tactics.