Buying an Expensive Domain Name Is It Worth the Investment?

Buying an Expensive Domain Name Is It Worth the Investment?

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When you’re launching a new website, blog or business, one of the first things you must think about is your domain name. Your domain name is the address for your website and also plays an important role in how search engines view your site. If you’re thinking about launching a new business and registering a domain name, wouldn’t it be great to own a catchy, memorable and brandable domain name? Unfortunately, most common words are already taken by other people. Expensive domain names are often auctioned off at prices going up to six figures. As much as this might seem like madness, there are various valid reasons for why someone would want to spend that much on a word ending in “dotcom”. Let’s take a closer look at why buying an expensive domain name can be worth the investment.

Establishing Confidence and Brand Recognition

Before you’ve even built your website or started marketing your products and services, the domain name you choose can be the key factor in establishing confidence and brand recognition. A memorable domain name is like a billboard letting people know that you are serious about your business. If someone is searching for a product or service and comes across a website with a catchy, memorable domain name, they instantly have a positive association with your brand. Take a look at the following two websites. Which one would you trust more? - Investment firm XYZ Company has a website at “investmentfirm.com”. They’re a serious company that offers a wide range of financial services, but there’s nothing memorable about their domain name. - Investment firm ABC Company, on the other hand, has a website at “investing-in-the-future.com”. They’ve clearly put some thought into their name and given careful consideration to the words they’ve chosen. This is a brand that they’ve built to last, and they’re confident enough to put it out there for all to see.

Build Traffic and Awareness

Another great reason to buy an expensive domain name is to build traffic and awareness for your website and products. If you invest in a premium domain name, you’ll have to pay a high price for it, which means that you might consider placing ads on your website or running a paid marketing campaign to offset the cost of buying the domain. The good news is that once the domain is registered in your name, you have the power to do anything you’d like with it, including placing ads that generate income. You could also use the domain name to start building a mailing list, which is a great way to build traffic and awareness for your business. You’ll want to ensure that you have a clear strategy for how you’re going to use the domain name to build traffic and awareness, otherwise it could end up costing you more than it’s worth.

Create a Solid Basis for Your Website

Another great reason to buy an expensive domain name is so that you can build a solid foundation for your website. Let’s say you’re building a new eCommerce website and you want your domain name to be “shoes.com”. Unfortunately, “shoes.com” is currently owned by someone else, which means that you’re out of luck. In fact, there’s a good chance that they’ve hired a SEO company to build links back to their site from thousands of other sites, which gives them an unfair advantage over your website. If you choose to buy an inexpensive domain name, you’ll likely be out of luck, but if you’re willing to invest in a premium domain name, you may be able to buy it from the current owner. If you can’t find the owner, then you can contact the registry and see if they have any additional domains that might work for your site.

Keyword Rich Domain Names

Another great reason to buy an expensive domain name is if it’s keyword rich and has the potential to bring in a lot of traffic. Let’s say you’re planning to launch a new blog discussing topics related to online security. You’re hoping to rank high in Google for search terms like “online security”, “online safety”, “cyber security” and “cyber safety”. Unfortunately, these words are all very common, which means that they are highly competitive. Let’s also assume that “securityblog.com” and “safetyblog.com” are both taken. If you’re willing to pay a high price for an expensive domain name, however, you might be able to buy one of these domains and use it for your blog.

Exclusive Domains as an Investment

If you don’t have a specific use for an expensive domain name, you could consider buying it as an investment. There are many domain name resellers who will let you buy their domain for a set price, but keep in mind that you won’t be able to use it until the current owner has transferred it to you. Much like stocks, the value of a domain name will fluctuate depending on market conditions. Some people use this strategy to fund their retirement. Let’s say that you buy a domain name for $100,000 and then sell it for $250,000 in a few years. While you won’t be able to retire on the profits alone, it’s still a nice way to earn some extra cash on the side.

Summing Up

When you’re launching a new website, blog or business, one of the first things you must think about is your domain name. Unfortunately, most common words are already taken by other people. Expensive domain names are often auctioned off at prices going up to six figures. As much as this might seem like madness, there are various valid reasons for why someone would want to spend that much on a domain ending in “dotcom”. Establishing confidence and brand recognition, building traffic and awareness for your website or products, creating a solid foundation for your website and using keyword rich domain names are all great reasons to buy an expensive domain name.