As a domain name broker that specialises in one-word .COM domains, one question that I often get is, ‘Why so much?’
It can be hard to comprehend how something that you cannot physically touch, smell or taste can be worth millions of dollars.
Even those with deep pockets often can’t imagine shelling out such massive sums for something they can’t live in, drive or fly.
And planning to invest this level of capital into a digital asset, such as a domain name, can be difficult to explain to your business partners, investors and possibly even yourself.
If you are unfamiliar with the domain name aftermarket, it is only natural to question why a particular name is priced so high and whether or not it is worth it — for you and your business.
So, let’s take a look at precisely why certain domain names command such high prices so you can make informed decisions about your own domain transactions.
Why is a domain name valuable?
A domain name is the foundation upon which you will create and grow your online brand and business. It is how your customers will remember you and find you online, so getting it right is essential. Not only will it set you up for success, but it will save you time, resources and money in the long run.
The most valuable and sought-after domains are short, popular one-word .com names that can be found in the English dictionary. Prices start in the strong five figures (USD) and go all the way up to eight figures. For example, Voice.com sold for $30M in 2019.
In fact, as of early January 2021, 66% of the top 100 reported domain sales of all time were one-word .COM names, and the average sale price was $3.5M USD. [ Source]
Why does it cost so much?
You’re probably familiar with the real estate adage “ location is everything “. And if you think of domain names as being like real estate, it should be a lot easier to understand why everyone wants these prime properties.
They’re easier to reach, they’re going to get more traffic, and your customers will be more likely to find them, return to them, remember them, and recommend them. What more could you ask for?
One-word .COM domain names enhance your overall brand positioning with benefits such as authority, trust, memorability, flexibility, organic type-in traffic, marketing effectiveness, and search engine optimization (SEO).
That’s why several leading brands and start-ups have invested in one-word .COM Internet addresses, including Amazon.com, Answers.com, Apple.com, Box.com, Dish.com, Dove.com, Gap.com, Hotels.com, Orange.com, Slack.com, Target.com and Uber.com, to name a few.
You could argue that some of these are natural choices because it’s their business’ name, but that’s precisely the point! Some of the most successful businesses have one-word names for many of the same reasons that one-word domain names are so attractive: they’re easy to remember and great for branding. Apple’s business has nothing to do with fruit, but everyone knows what they sell — even non-customers.
Of course, not all one-word .COM names are equal, which is why you’ll see a variety of prices. Here are some of the factors that can influence an individual one-word .COM domain name’s price:
* Ease of saying, spelling and recalling: If a particular word is a long one that many people spell wrong, it won’t be nearly as desirable as something short and simple.
* Popularity/trends: In the early days of the internet, sticking an “e” or “i” at the beginning of a word was popular. Then, adding “-ly” or “ify” was in vogue; you know who you are! These trends will come and go, and words that use them can cost a lot while they’re in fashion and then start to feel dated as trends evolve.
* Connotation: What the name implies may be just as important as what it is literally saying, so consider the word from every angle to assess its value.
* Length: The fewer characters, the better. In addition to being more memorable, they are a lot easier to type-in, especially in today’s hectic world where everyone is in a hurry and possibly typing with one hand on a cell phone while holding a coffee in the other hand.
* Extension: As we’ve discussed, .COM is by far the most valuable extension right now, and that is not expected to change in the foreseeable future.
* Radio test: One measure of a valuable domain name is whether people can spell it when they hear it. While you might argue that the radio isn’t nearly as popular as it once was, it’s a sentiment that also applies to word-of-mouth referrals — for example, telling someone about the website at a coffee shop — as well as giving someone your email address containing your domain name over the phone or talking about it on a podcast.
* History of name/term: A domain name that is linked to something negative — whether it’s a historical figure or event or a word that may come across as racist, sexist or otherwise offensive — isn’t going to be highly valued in most cases. It’s also very important to research any past and/or present legal disputes connected to the domain name.
* Domain usage: There may be cases where a domain name was used by someone in the past who incurred Google penalties or bans, and that could impact the value of the domain name in the future, as well as search engine rankings.
Comparing domain names can be a bit like comparing apples to oranges because they are all unique and need to be assessed and appraised on a case-by-case basis.
Is it worth it?
Instead of thinking about how much the domain name costs, think about how much your business or project could benefit from owning it.
How would it affect your business if a competitor acquired the domain name?
Are you losing emails and traffic to the domain name?
Exactly what will it cost you not to secure the domain?
What if I can’t afford it right now?
If the price of a domain name is not within reach, that’s okay. You can possibly explore options like a lease-to-own, payment plan, lease-only, equity deal, or joint venture. There is often some flexibility available at these price levels.
However, I’d strongly advise engaging a reputable and experienced domain name broker who can navigate these more complicated waters (negotiations, legal, escrow, etc) on your behalf.
One thing is for certain: If you are looking for a one-word .com domain name, you do need to act quickly. There are only so many suitable single words in the English dictionary, and the pool of available domains is getting drier by the day — and the ones that have already been snapped up, will typically never be for sale again.
Who can help me buy or sell my domain name?
If you require a trusted broker who can help you navigate the complex world of buying and selling one-word .COM domain names, get in touch with our team today.
Leveraging more than 20 years of experience in the domain name industry, Evergreen.com provides brokerage services to confidentially and securely acquire and sell one-word .com domains on behalf of public figures, investors, start-ups and major brands around the world.
Some of the valuable one-word .COM domains currently for sale on Evergreen.com’s marketplace include Boating.com, Cybersecurity.com, Runner.com, Gleam.com, Midnight.com, Face.com, Kitty.com, Robot.com, Pineapple.com, Sustainable.com, Tomorrow.com, Gurus.com, and Lilac.com, to name a few.
Don’t underestimate the power of a great domain name — because great domains grow great business!