At one time domain names were free…..
That was then.
Today there is an active domain resale market, mostly governed by the law of supply and demand. Factors influencing domain prices include:
- Is it a .com? The usual cost of a .com is 10 times that of a .net or .org. Pure generic names like loans.com or solarroofmembrane.com have sold for from a few thousand to millions of dollars.
- Is it brandable? These sales are driven by the purchaser’s needs.
- Is it nice and short? Easily-typed and memorable domains command higher prices.
Long tail geos (also known as exact search term) prices are influenced by size of the metro, business sector (is it a carpet cleaner in Utica or a lawyer in Chicago?) and in North America, even location (both coasts trend to higher prices). Competitiveness of the sector and economic benefits of high search rank also influence pricing. (An orthopaedic surgeon may benefit less from rank than an insurance broker.)
Examples of early 2012 sales
atlantataxattorney.com — $1,750.
- Exact match for a profession in a major metro.
- The buyer got the best deal.
austindwilawyer.com — $17,000.
- Seller received very good money for a high value profession in a minor metro, but consider that the new owner could pay for this domain name by defending a single client.
- Price about right.
urologygroup.com — $4,000.
- We consider this to be a brand, short, easily-typed but of limited value as only a group of urologists would need it and it does not identify their whereabouts.
- Price seems about right.
atlantainsurance.com — $6,000.
- High value business in a major metro.
- Just a terrific buy.
carolinaautosales.com — $5,500.
- Auto sales are more local than state-wide but this name is memorable, easily-spelled, and has great brand potential.
- An okay buy.
parkcityrealestate.com — $69,000.
- This sale took place in 2011 and seems high for this minor metro. However, it did include a basic website and reports are that the buyers are dominating their market.
dudu.com — $1,000,000.
- A very short, memorable brand of limited value unless it was your major brand.
- The price seemed to be driven by the buyer’s specific need.
When faced with a decision, consider all the factors that will add value to your commercial venture.
- Lower advertising costs.
- Lower or no search engine charges.
- Lower print advertising costs. Your ads can be smaller with just as much impact.
- Investment value. Domains do have asset value, and can be resold.
- Greater potential profitability from increased sales and retention of existing clients.
- Increases the overall value of your company for potential future sale. A great domain name is a valuable asset.
- Look for domain prices to increase. As the need to rank high and PPC costs go up, the value of domains will rise accordingly.
- Domain names are a finite resource. There are 78 lawyers in Barharbor, for example, but only one can be barharborlawyer.com.
We suggest the ROI approach. Spread the price of the domain over three years and consider hosting and development costs as an operating expense. But also consider the results of NOT buying your ideal name.
It would be very unlucky and unusual if your new domain, once deployed, did not pay off in less than three years. Also remember, it will continue to enhance your competitive position indefinitely, for almost no further investment.
Make certain that your ideal domain name is working for you —
not your competitor.
For most, this ship has sailed, and every day more domains are snapped up.