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What Is The Right Price To Pay For Your Domain Name

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Anand Srinivasan
November 18, 2014


Anand Srinivasan
Anand Srinivasan has written 7 articles for DomainInformer.
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Parked domain names are the nightmare of every new business owner – should you pay a premium to fetch that coveted domain name that is parked? Or should you rather save that money and go with a less attractive domain name that is available? When Sol Orwell co-founded Examine.com, a business that recently became a million dollar business, he paid close to $42,000 for the attractive domain name. Sol rationalized that even if the venture failed, the domain name itself would retain value and he could sell it off for $25,000 in a matter of hours.

 

But shelling out thousands of dollars for an attractive domain name is becoming less and less common. Back in the day, domain speculators like Frank Schilling and Kevin Ham built multimillion dollar businesses through parked domains. Over the past few years though, two things have dramatically changed the landscape. Firstly, ICANN, the organization responsible for managing the top level domains have unveiled a slew of new top level domains (TLDs) that have taken the sheen off the limited .com inventory. Also, Google.com no longer provides exact match domains the same kind of importance it used to while ranking search results. If you are an internet business, the domain name you own becoming less relevant in terms of determining the success of your business.

 

Having said that, what is the right price to pay for your domain name? Domain names today are available for as cheap as $2 and can go as high as thousands of dollars. Here are a few things to consider while determining theideal price

 

How Desperately Do You Need The Domain Name

 

If you are a retail giant like Target, there is no way in the world that you would settle for a domain name other than www.target.com. However, if you are the owner of a small business selling t-shirts with the 'Target' brand name in India, you may not mind choosing www.target-tshirts.com instead. The decision on spending top dollars for a premium domain name should be based on how much brand equity you can derive out of a domain name.

 

Features Accompanying The Domain Name

 

There are thousands of domain hosts today and the price that they sell their domain names varies quite significantly. But not all domain hosts are built alike. Hosting a domain is not just about the ownership of the name. There are other features that you might want from your host like ownership privacy, ease of transfer, email forwarding, etc. While some hosts provide some features for free, others charge for the features separately while keeping the core domain ownership cheap. A few other companies like Hostt.com in fact offer free web hosting to their clients with the caveat that the customers have the domain name hosted with the company.

 

Will You Be Looking At A Resale Later

 

To some people, domain names are like real-estate – they are purchased as an investment only to be sold later. Domain squatting aside, a number of genuine businesses too purchase domain names in the hope of building an extended product line down the line. In cases where you might be looking at resale of the domain name alone, it makes sense to invest in a name that can fetch you returns down the line. An alternate way to look at this is to build a product on a less attractive name and buy the more attractive domain name once you are successful. A very popular example of this is Facebook's transition from thefacebook.com to what it is today.

Domain names are an important part of your business identity. But it is also common knowledge that premium domain names don't come cheap. So an attractive domain name alone does not guarantee the success for any business. So understand the dynamics of your business and the relative importance of having a specific domain name before you splurge top dollars for any particular domain name.

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