Last updated on March 21st, 2020 by Chris Griffin

What’s the first thing most entrepreneurs do when the inspiration for a new business strikes? They check to see if the domain for the name of the new business they’ve dreamt up is available and how much the domain name will cost.

It’s pretty obvious why a domain name like lasvegas.com is so pricey ($90 million!). But if you set out to spend a few bucks on a domain for your small landscaping business, you were probably floored when you saw that sullivanlandscape.com was going for $4,888.00.

Why do some domain names cost much while others are so cheap? And is it worth paying a steep price to register the perfect domain name for your business?

In this blog, we’ll explore the world of domain names and give you some tips to determine whether or not it makes sense to shell out for a premium domain name. 

For starters, what is a domain name?

A domain name is an easy to remember address that is used to access a resource on the internet. In plain terms, it’s what people type into a browser to access a website. If you think of a website as a building, the domain name is its address. 

The internet is a giant network of connected servers located around the world. Every computer on the network is assigned a unique IP address by which it can be identified. Since an IP address is a numerical string, a domain name is assigned to it and then mapped to its corresponding resources. So, a user won’t have to remember eight seemingly random numbers to navigate to titan.email.

Anyone can buy a domain name. To do so, visit a domain name registrar, such as GoDaddy or Namecheap, punch in the domain you want, and buy it. I’d also be remiss to not mention the fact that we’ll help you get a domain name when you register for Titan.

How is domain name cost determined?

Of course, getting the domain name you want isn’t always a super easy process, which is why you’re reading this article. There are over 350 million domains registered in the world, so quite a few of them are already spoken for. Availability is the major reason why a domain name can be so pricey and because of it, an entire industry for aftermarket purchases has emerged.

But assuming you’re not willing to engage in a bidding war, let’s look at why it might be expensive to get the perfect domain name. 

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Before a registrar can sell you a domain name, they must reserve it through a domain registry. Registries control the Top Level Domain (TLD) –– think .com, .net, or .biz –– and work under a contract with the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN is a nonprofit organization that coordinates the databases related to the namespaces and IP addresses of the Internet. Both the registry and the registrar pay a fee to ICANN. 

It’s helpful to think about it in terms of consumer goods. You can’t just buy a can of Coke directly from Coca-Cola, you have to go to a store. Registries are like Coca-Cola and registrars are like the stores. Registries sell the domain to a registrar at a set price and then registrars sell the domain to consumers at a slightly higher price.

Cool, so I want mycompany.com. Why is it a fortune?

Unlike a can of Coke, you’ll see a lot of different prices for domains. It’s clear why cars.com would be worth more than buycars123.biz. But for entrepreneurs in a localized, more niche space, a hefty sticker price on a domain can be a little baffling. Especially for those who had no problem legally registering the name of their business. 

Ultimately, a domain name is worth whatever a buyer is willing to pay for it. But let’s look at some of the common causes that spike the price of a domain name:

Availability: Again, availability is everything. You’re not the first person to turn a hobby into a side business, so if you’ve decided to start professionally teaching guitar, it’d be crazy to think guitarlessons.com is readily available.

Simplicity: The most valuable domains are typically memorable and easy to spell names that end in .com. 

Location: Just like buying real estate, location is a huge factor in the price of a domain name. If you’re trying to purchase a domain for a real estate business in New York City, you’re likely going to spend more than a buyer in Monowi, NE.

Google search: Search Engine Optimization (SEO) is a practice built around optimizing a website so that it shows up higher in Google’s search results. Therefore, a domain name containing a popular keyword will most likely be pricey.

Well, is it worth paying a high domain name cost for the perfect one?

Your domain name is an essential part of your brand and it should be treated as such. It will be listed everywhere, from Yelp to Angie’s List to LinkedIn. It can also be used to brand your email, so you don’t have to communicate with customers using an address like mynewbiz2020@gmail.com. 

Depending on your business, the right domain name could be worth every penny you spend on it. Ask yourself the following questions and then go scoop up the domain name that will best serve your business:

  • Am I planning on touting my URL offline, on billboards, or print ads?
  • Do I need a premium domain to build trust and credibility for my business?
  • Am I operating in a highly competitive space for search results? If so, is it worth grabbing an aftermarket domain with a positive history to get a higher rank in Google?
  • Is it worth grabbing a domain name, so my competitor doesn’t?
  • Are there other domain names that I can live with that are a better fit for my budget?

Have the perfect domain name in mind for your business? See if it’s available and put it to work with Titan!

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Originally published 22nd January 2020 02:00:00pm, last updated on March 21st, 2020

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