Easy Guide — Should You Invest in Premium Domains?
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Premium domains are like the high-end offices you find in bustling streets. In most cases, they come with a hefty price tag. But the deal can be good for your business.
Figure out this, you have come up with a business name, but on checking the relevant domain, it is $500 or even $50,000. You are torn between going for a cheaper alternative or taking the plunge and buying the premium domain.
This article will take you through all the nitty-gritty of premium domain names and whether it is worth going for one.
What Is a Premium Domain?
A premium domain is a domain name with a higher value than the standard domain price tag, largely because of its unique characteristics like brevity, memorability, brandability, or uniqueness. These domains are mostly owned by domain brokers or registrars who want to sell them at a profit.
Examples of premium domain names that have fetched millions include tesla.com, insurance.com, and voice.com. Most premium domains consist of one or two short words.
What Makes a Domain Premium?
Everyone is calling their domain premium. Like slapping that "Rolex" label on a cheap watch and saying it is luxurious. That begs the question: what sets premium domain names apart?
Although your memory can hold up to 2.5 million gigabytes of information, let's be honest, you're more likely to remember your grandma's weird recipe for meatloaf than some random domain name.
But what about a domain like forbes.com? The domain name takes up negligible space in your memory.
Memorability is a critical factor when branding a domain name as premium. Although a valid domain can be up to 63 characters, you don’t need all that to create a good domain name. Apart from that, they should have a good vowel and consonant combination.
Factors that influence a domain memorability include:
But how can you analyze these domain features? Well, like most jobs, you need a tool, or more precisely, a toolkit like Bishopi, that can help you gauge a premium domain and ascertain its potential.
You will agree that most premium domains are easily brandable. However, this goes hand in hand with marketing. If you go for a domain name that doesn't directly convey what you do, you must be willing to invest to position the brand.
Let's take the example of Google. Although the word was non-existent 30 years ago, the investment in marketing the company and brandability have contributed to its success. Today, words like "search" and "Google'' are synonyms. But we are not ignorant of the innovative part of the business.
Apart from Microsoft and MasterCard, all the other companies in the top 10 most valuable brands in 2023 have no relevant keywords in their domain name. But the choice of brandable and marketable names has set them apart from their competitors.
You should consider the brandability of a premium domain name before splashing out thousands or millions. Keep in mind the longevity of your company and how you can leverage the name to edge competitors.
The originality of a premium domain means more trustworthiness. Jack Ma once said, "You should learn from your competitor, but never copy. Copy, and you die." Any premium domain worth its salt should show a sense of creativity.
The Internet is flooded with millions of junk domain names that are copycats of established businesses. Although it can seem like a witty strategy, there are limits to how far such a domain can go. First, the legal restrictions could mean letting the domain go after spending years building your brand reputation.
How do you determine the credibility of an online business? For most people, the first point of interaction with a business is their website. A credible domain name should be unique and live up to its standards.
When it comes to domain extensions, .com reigns supreme over other TLDs. Most premium domains are .com. There are instances where domain names with alternative TLDs are just a fraction of the price. But does that mean there are no premium alternatives? Not really.
You can use different extensions to come up with premium domain names. For example, although .online is not a popular TLD, casino.online is a good example of a domain hack. This refers to a clever combination of a TLD and a word or phrase that makes it memorable.
When it comes to geo-specific products and services, country code top-level extensions can be better alternatives to .com. For example, if you go for a domain name like shoes.co.uk, it gives a sense of localized products. You can knock out international competitors if you establish a strong local presence and tap into niche markets.
Brandability and keyword inclusion are the primary characteristics of premium domains. A brandable and SEO-friendly domain name is like killing two birds with a single stone. But how far should you go with keywords in a domain name?
A single-word domain name like cars.com has high potential because of keyword inclusion. However, you should avoid keyword stuffing in a domain name. No matter how enticing it is, having a domain with several keywords looks spammy.
As a website owner or domain investor, your objective is to select a domain that enhances search engine visibility, attracts organic traffic, and improves online performance. To achieve this, search engine optimization should be a priority when choosing a domain name.
Domain metrics like authority play a critical role in ranking. One of the factors that influence this metric is SEO. If you get it right at this stage, you are one step ahead of your competitors.
What Is the Cost of a Premium Domain?
The price of a domain name varies depending on its potential. You can get a premium domain for as low as $100, while some have fetched several million. The good thing is, when you buy a premium domain, it attracts normal annual renewal rates (usually between $5 to $20). However, some registrars charge a higher renewal fee for some top-level domains.
If you are curious about some of the most expensive premium domains, here are some:
- carinsurance.com – $49.7 million
- insurance.com – $35.6 million
- vacationrentals.com – $35 million
- privatejet.com – $30.18 million
- internet.com – $18 million
Well, not all premium domains will attract millions of dollars. But this shows this is a lucrative industry for domain investors.
Are Premium Domains Worth It?
I know you don't like this answer, but it depends. A premium domain has no magic wand that will spring your business to success in a day. However, your choice of a high-value domain name is a good head start for your business.
Depending on your business stage, you can go for a premium domain or shelve the ambitions for a later date. For example, when Facebook was launched, the initial domain was thefacebook.com. After the company's success, it acquired facebook.com and fb.com.
Is Premium Domains Flipping Advisable?
If you are into domain flipping, you might wonder whether buying and selling premium domains is a good idea. Although it is a lucrative venture, it needs strategic execution to avoid losses that can push you out of business.
Trending topics offer the best opportunity to flip premium domains. For instance, if you had secured covid.com before the onset of the pandemic, it could have fetched a good deal. However, if you hold such domains for long, the risk of obsolescence is high. Some registrars also charge higher renewal fees, which could mean additional costs, if you hold the domain for more than a year.
That said, you need extensive market skills to identify undervalued domains that can sell at a profit.
How to Buy Premium Domains
When you want to buy a domain name, there are two possible outcomes after the search:
- The domain name is taken
- The domain is available for normal or premium fees
For the first option, you can contact the owner to know whether they are open to selling the premium domain name. But how do you get the details? Again, you need a toolkit like Bishopi! The whois lookup tool lets you get all the information you need about the owner, from their names to contacts.
When a domain name is available in the general listing, you use the normal registration process to acquire the domain.
Premium domain brokers are also an option you can consider. You can share the details of your preferred domain names. The broker gives you a list of matching domains, and you can select the most ideal.
If you want to consider domain brokers, some of the most trusted are:
And if you want to try something exciting, Bishopi is bringing a new approach to domain investment. You get a domain, analyze its pronounceability, simplicity, and readability, and then decide whether it fits your bill. It can’t get any better than that.
There you have it; all you need to know about premium domains. But before you log off, here is a recap of what we have learnt:
- Premium domain names attract an extra cost because of their unique characteristics like brevity, memorability, and brandability.
- Although premium domains don't guarantee business success, they give you a good head start.
- Some domains like cars.com, carinsurance.com, voice.com, and internet.com have attracted millions of dollars in domain auctions.