Are you interested in buying the domain name insurance.com? That’ll be $35.6 million. Meanwhile, insuranceguys.biz can be yours for $23 per year.
Market forces have determined that insurance.com is a premium domain and insuranceguys.biz is not. The former conveys legitimacy and contains a valuable keyword that interested shoppers often type into search engines.
If you’re laser-focused on your business’s online success, a premium domain can help solidify your brand—and they don’t all cost millions of dollars. There’s an entire industry dedicated to buying and selling premium domains, cashing in on prestige and traffic. Here’s an overview of premium domains, and why people register them.
What is a premium domain?
A premium website domain is a highly desirable domain name that’s typically short, memorable, and marketable. A premium domain name is often associated with a popular search keyword, making it more valuable than other domain names. Such domains are usually sold at a higher price due to their perceived marketing potential.
There are two principal types of premium domains:
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Pre-registered premium domains. These are domains already owned by someone else. In the early days of the internet, some entrepreneurs bought up what they considered good domain names with the intention to resell them at a premium rate. They may be available for purchase by contacting their current owners or a representative broker.
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Registry-designated premium names. These are domains identified by a registry as high-value due to their desirability. A domain registry is an authoritative source for top-level domains (TLDs) like .com, .net, and .org., maintaining a database of all registered domain names within that TLD. Registries may flag domains as premium based on factors like being short, clear, and containing common dictionary words.
What is the difference between a premium domain and a regular domain?
The difference between a premium domain and a regular domain hinges on two main factors: perceived value and price. Typically, premium domains cost significantly more than regular domains because their owners bet they’ll attract organic traffic for their website, presumably leading to more customers and revenue.
These domains can run into the thousands or even millions of dollars. You may be able to register a premium domain through a typical registrar, but most likely you’ll need to contact the site owner directly or work with a specialized broker. Most domains considered premium have already been taken.
Regular domains, on the other hand, cost much less—in most cases ranging from $10 and $50 per year. If you’re building an ecommerce site, you can use Shopify to generate and register a domain name.
What makes a domain premium?
- It conveys professionalism and authority
- It’s memorable
- It’s useful for branding
- It features common words
- It helps with search engine optimization (SEO)
- It has resale potential
Here are six key attributes and benefits that make a domain premium:
1. It conveys professionalism and authority
One reason premium domains are priced higher is that they often make a business appear more authoritative and established, improving customer confidence. This is especially true when the domain name contains a broad, generic term. The URL hotels.com (which famously sold for $11 million in 2001) sends a message to users looking to decide among various hotel rental options. Its simple, broad name tells them they’ve arrived at an established marketplace for the product they’re seeking. Of course, other factors like price and selection ultimately influence whether users convert to paying customers, but the premium domain creates a foundation for a strong relationship by attracting customers in the first place.
2. It’s memorable
Premium domains have short, catchy, and memorable names. These help generate direct traffic because they stick in users’ heads. For instance, car shoppers will have no trouble memorizing the URL cars.com. It’s short, simple, pithy, and it concisely describes what the site sells.
3. It’s useful for branding
A premium domain is industry-relevant, and easily associated with a product, service, or niche. Take vacationrentals.com, for example, which sold for $35 million in 2007, and offers total clarity about what site visitors can expect. Users can trust that when they visit the site, they’ll be shown listings of vacation rentals. The domain name is the product and vice versa, which makes for strong branding.
4. It features common words
Single-dictionary-word domains are often considered premium due to their memorability, search engine optimization (SEO) benefits, and high market demand. Entrepreneur Vinit Bharara ran the wildly successful diapers.com, which sold exactly what you’d expect. (The brand was eventually purchased by Amazon.
For his next act, Vinit snatched up the domain cafe.com—not because he planned to open a cafe, but because he recognized its value as a premium domain due to its simple, straightforward name. Cafe.com ultimately became a political site, which Bharara sold to Vox Media. When comparing Bharara’s two sites, a difference emerges: diapers.com literally sold diapers while cafe.com offered political discourse. Even though one name was more literal than the other, both were premium because they consisted of a single, commonly used word.
5. It helps with search engine optimization (SEO)
One reason that companies pay top dollar to acquire premium domains is that they work hand-in-glove with a holistic SEO strategy—optimizing your site’s content and structure to improve its search engine rankings.
Say your business sells furniture. Having the word “furniture” in your URL can improve your position in search results by improving user trust (potentially leading to high click-through rates and more inbound links), increasing organic traffic, improving backlink potential, and helping with keyword relevance. But it’s not a magic fix on its own. SEO depends heavily on other factors, including content quality, user experience, and backlinks. Nonetheless, starting with a good domain name can give you an edge.
6. It has resale potential
Premium domains tend to appreciate in value over time and can be resold for a significant profit. In some cases, a domain owner may never set up a proper website. Instead, they “squat” on their parked domain name, waiting for someone to make a profitable offer to buy it. Even if you’re not running an ecommerce business, you can think of a premium domain name as an investment.
How to buy a premium domain
- Research domain names
- Set a budget and negotiate
- Purchase and transfer the domain
- Finalize registration and set up automatic renewal
- Secure related domains
Here’s how to identify, purchase, and register a premium domain:
1. Research domain names
Identify domain names that would benefit your business and check their availability. Visit domain registrars to see if your domain ideas are up for grabs or already taken.
If the domain you want is already owned by someone, you can potentially go through brokers or marketplaces like Markmonitor, Flippa, or Sedo to try to buy it. You can also use a public WHOIS listing to find the name of the domain’s current owner. Domain owners can make this listing private, so this approach won’t always work. In the case of headphones.com, cofounder and CEO Andrew Lissimore was able to track down the domain’s owner. “So I sent him a message and I said, ‘Hey, I’m interested in your domain. Are you looking to sell it by any chance?’” Andrew says on the Shopify Masters podcast. The two negotiated, and, eventually, Andrew was able to purchase it.
If you can’t track down the owner, or if the owner insists that you work with their broker, you can use this to your advantage. Brokers may come armed with more information about the domain than you’d get from an owner selling it on their own. When possible, ask the broker for data on the domain’s past performance. Be wary of domains with a lower click-through rate. Lower click-through rates mean that fewer people click on a link when it appears in search results, and thus fewer visitors are engaging with the site. If you still want the domain, use that low click-through rate as grounds to get a lower price.
2. Set a budget and negotiate
Premium domains can be expensive, so create a budget based on your goals and expected market demand. Some registrars offer financing or lease-to-own options to make access easier. When Andrew purchased the domain name headphones.com, he paid it off in installments. “I was able to get it tied to the business,” he explains. “So we were just paying for it monthly and then, as the business grew, our payments would grow.” If a broker or site owner holds firm on an unreasonable price, or if they won’t let you pay for the domain over time, you may have to consider alternatives.
3. Purchase and transfer the domain
Once you agree on a price, complete the purchase through a secure platform that supports transfer and escrow services. Transfer services move domain ownership from the seller to you, which usually involves unlocking the domain, transferring it to your registrar account, and updating the registration details. An escrow service holds the payment until the buyer confirms the sale terms are met. After the transfer, you gain full ownership rights.
4. Finalize registration and set up automatic renewal
File your domain registration with your chosen provider. Set your registration to automatically renew to ensure you don’t lose it in the future.
5. Secure related domains
To protect your brand, consider securing similar domain extensions and variations. For instance, if you manage to register the domain pizza.com, maximize its value by also registering pizza.net, pizza.app, and other relevant extensions. This helps prevent others—especially competitors—from acquiring similar domains that could confuse your audience.
Premium domain FAQ
What is an example of a premium domain?
Cars.com is a premium domain. The URL is short, contains a keyword, and is industry-specific, making it a valuable property.
Is it worth paying for a premium domain?
If you’re starting a new business, a premium name can help you build credibility quickly—but this strategy only works if you have a lot of startup capital or can negotiate a payment plan. If you have an established business, buying premium domains that are closely related to your brand name can help protect your brand.
How do I know if my domain is premium?
Premium domains tend to be short and memorable and have popular extensions like .com. Start by checking the price of the domain through a domain registrar. If it’s significantly more than normal fees ($10 to $40 per year), it could be considered premium. You can also use domain checkers or registrar tools for details that suggest it’s a premium domain. Or, if the domain is listed on aftermarket platforms, like Hover or GoDaddy’s Premium Domain Market, for example, it could be considered premium.
