What Are Premium Domain Names and Are They Worth the Cost?
While estimates vary, there are at least 1.8 billion websites. That’s a lot of domain names that have already been taken – not to mention all the names that are owned but not currently in use. What’s more, some domain names are much more desirable than others.
This is where premium domain names come in. While they tend to cost more, they can increase your visibility and help you stand out against your competition. But purchasing a premium domain isn’t as easy as registering it with a domain registrar. Many are already owned, and nearly all of them come at a much higher registration cost.
Let’s look explore the world of premium domain names, explain what they are, why they tend to cost more, and how to decide if choosing one is right for you.
How Choosing a Domain Name Typically Works
When you create a new website, one of the first things you need to do is pick a domain name. This is its unique identifier, which people can type in to visit your site:
We’ve previously discussed how to choose a domain name, and how to register one, which is usually a simple process. You start by coming up with some potential names, then visit a domain registrar. There, you can use a dedicated tool to see if the names you want are available:
Typically, you’ll keep trying variations and different Top-Level Domains (TLDs) until you find a name you like – and that isn’t already taken. However, what if you really want a name that is already in use? That’s where premium domain names come into the picture.
What Are Premium Domain Names?
Premium domain names are high-value web addresses that are often short, memorable, and keyword-rich. Many are already owned by someone and most come with a much higher price tag than your average domain name.
These domains typically stand out because they include popular keywords, are easy to spell, and have a desirable gTLD. They are considered “premium” because of their perceived value in branding, search engine optimization (SEO), and ease of recognition.
Here are some key points about premium domain names:
- Already Registered: Many premium domain names are pre-registered and sold by current owners or domain registrars at higher prices than standard domains.
- High Demand: These domains are in high demand due to their marketability, such as single-word domains (e.g., Cars.com), geographic locations (e.g., NewYorkHotels.com), or niche-specific keywords.
- Higher Cost: Premium domains are more expensive than regular domains. The cost can range from hundreds to thousands (or even millions) of dollars.
- Branding Advantage: Owning a premium domain can help businesses establish authority and trust, attract more visitors, and stand out in a competitive market.
- Premium Extensions: While most premium domain names are associated with popular extensions like .com, premium domains can also have newer or industry-specific extensions like .tech, .ai, or .store.
- Resale Value: Many people invest in premium domains as assets, as their value often increases over time.
If you’re considering a premium domain, it’s essential to evaluate its potential impact on your branding, SEO, and long-term business goals.
When to Use Premium Domain Names (And When Not To)
The main benefit of premium domain names is that they are often shorter, easier to remember, and more ‘brandable’. The primary downside is the higher domain name price – sometimes ranging between hundreds or thousands of dollars. By contrast, a standard domain name will usually only cost between 10 – 30 dollars:
The decision comes down to whether or not the name is worth the cost. Of course, this is a largely personal decision, and depends on a lot of factors. However, here are some of the questions you should ask yourself when evaluating premium domain names:
- Does it fit into your budget? No matter how much you might want to snag a particularly strong domain name, doing so isn’t worth bankrupting yourself or your business.
- Are there other names you can use? Before you settle for a premium domain name, do some research. See if you can find a slight variation that’s just as good, perhaps by using a different TLD.
- Are you planning to monetize your site? It’s easier to make a case for a costly domain name if you’re intending to build a money-making empire on top of it.
- Is attracting a lot of traffic important to you? Catchy and memorable domain names tend to bring in more visitors, and are good for your Search Engine Optimization (SEO).
If you intend to build a high-traffic site, such as an e-commerce store or another online business, that brings in significant revenue, the high domain name price may be worth it in the long run. On the other hand, if what you’re creating is a basic blog or a smaller niche site, you’re probably better off choosing a cheaper domain name.
How to Buy a Premium Domain Name
As we mentioned earlier, some premium domain names aren’t actually owned by anyone, but are sold at a higher price due to their desirability. For this reason, they can be purchased from a regular domain registrar. While searching for the right name, you’ll find a lot of options at a variety of different domain name price points:
For domain names that are owned, you have two main options:
- You can contact the owner directly. This is often possible by using a domain lookup tool like Whois.net to find information about a specific domain name.
- Check out a dedicated domain marketplace, such as Afternic or DomainAgents. These sites lists thousands of privately-owned domains, that you can buy at a set cost or make an offer.
Regardless of your approach, you’ll want to proceed carefully. There’s some risk inherent in buying a premium domain name, as you’ll often have to pay first and trust that the other party will transfer ownership as promised. Using a marketplace cuts down on that risk, since they often have policies in place to protect buyers.
Finally, sellers are free to charge whatever they’d like for a premium domain name. You’ll therefore need to be wary of over-paying for a name that isn’t worth it. However, you can get a better deal by knowing what makes for a high-quality domain name, and taking the time to estimate the value of the specific name you’re looking at.
9 Tips for Buying Premium Domain Names
Buying a premium domain name can be a smart investment for your business or personal brand, but you need to think about this process strategically. Here are some tips to help you make a smart decision:
- Define Your Budget: Premium domain names are often expensive, so set a realistic budget before starting your search. Remember to account for renewal costs, as premium domains can also have higher annual fees.
- Understand the Domain’s Value: Assess the value of the domain based on factors like name length, keywords, and how memorable it is. Shorter domains are often more valuable, while popular and industry-specific keywords add SEO value. Easy-to-remember domains tend to drive the most traffic and .com domains are generally the most valuable. Many domain registrars have domain appraisal tools that can estimate how much you can make with a given premium domain.
- Research the Domain History: Check if the domain has been previously used. Look for any penalties or spam history in its backlink profile and ensure it’s not associated with a negative brand. Use tools like Wayback Machine or Whois Lookup to check the domain’s history and ownership.
- Negotiate the Price: Many premium domains are listed with negotiable prices. Reach out to the seller and make a reasonable offer—especially if the domain has been on the market for a while.
- Verify Trademark Issues: Ensure the domain doesn’t infringe on any existing trademarks to avoid legal disputes. Use USPTO’s Trademark Search or consult an intellectual property attorney for guidance.
- Think Long-Term: Invest in a domain that aligns with your long-term branding and business goals. Avoid trendy or overly niche names that might lose relevance.
- Check Additional Costs: Some domains may have transfer fees or require additional payments to move them to a new registrar. Be sure you understand the total cost of ownership.
- Consider Financing Options If the domain is outside your budget, some platforms offer financing or payment plans to help spread out the cost.
- Buy Direct: If the domain you want is owned but not actively used, try contacting the current owner directly. They might be willing to sell for less than expected if they aren’t actively monetizing it.
Not sure the cost of premium domain names is worth it for your organization? A2 Hosting allows you to register any domain, making it easy to bundle web hosting and domain renewal costs together. Search for available domains now or transfer your existing domain to A2 Hosting quickly and easily.