You might be on the market for a domain. But, what many don’t know is that the decision is more than what domain name they want to get. You will also face the decision of whether to purchase a premium domain or a standard one and how you plan to execute the transaction.
Premium Domain Definition
A premium domain is a high-quality domain that has been previously registered but is available for sale at today’s market prices.
Unfortunately, there is no clear set of rules that allow users to define a premium domain name. What domain purchasers can do is consider if the domain possesses any or all of the high-value characteristics that suggest it is worth the price.
Characteristics of High-Quality Domains
Length: As a rule of thumb, the shorter the domain name, the better. For this reason, two and three-letter domains are usually considered premium. One contributing factor is if a company may use the domain as an abbreviation of their existing company.
How regularly users search for them: A good domain name may include several keywords searched for by your target audience. In this case, more traffic will likely land on this domain, suggesting less SEO work will be needed.
The ability for a domain to be used as a brand name: Domains may be more likely to be used as a brand name. If so, it may also increase in price. The “brandability” of a domain isn’t dependent on the length either. Many long domains may also be premium.
Buyer interest: As the natural laws of supply and demand would state, even if something doesn’t look valuable, it can easily become a premium domain if enough people are interested in purchasing it.
In summary, high-quality domains are categorized for their length, how regularly users search for them and how closely they are associated with the actual service or industry.
There is a second type of premium domain, typically priced higher by the registry organizations that manage the top-level extensions. This category of premium domains is not yet registered and comes with a higher price than a standard name with the same extension.
Cost of Premium Domains
Now that you know what to look for, domain purchasers might be wondering what they can expect in terms of domain cost? Similar to our answer above, there is no set price. The price of a domain might be quite high and may or may not also include the cost to register or transfer the domain. Looking one year out, there will also be a renewal price that may be more or less than the initial fee charged.
For first-time buyers, it is important to look ahead at these costs, so you aren’t caught off guard later. You’ll also want to use a safe transaction method, like a domain escrow service.
Considering the Advantages and Disadvantages
Since the cost of purchasing a premium domain is higher, buyers are encouraged to carefully weigh the pros and cons. In many cases, purchasing a premium domain will be worth the money. But, in others, you won’t’ be able to justify it.
One of the main advantages is that a premium domain is probably the best possible domain for your purchases. It was likely your first choice for a reason.
Depending on your uses, many people purchase domains hoping that a company will pay more for them later. In this case, purchasing a premium domain may be part of a longer-term investment strategy.
A final advantage worth considering is the added traffic a premium domain may help you draw in. If the number of people coming to your website will result in justifiable income, paying more for your domain may also be worthwhile.
Seeing a domain positioned as “premium” may be enough to convince you. But, consider that while the cost is higher, a more specific and slightly longer domain might be more applicable for your purposes. In this case, the added expense may not be worth it.
Additionally, the cost of purchasing a premium domain might not be in your budget or may require you to get creative when attaining funds. While a good domain is important, several other pieces might be more worth your investment as a business owner.
How to Purchase A Premium Domain
One of the most common ways to purchase a premium domain is by contacting the owner directly. To do so, you may choose to use a domain lookup service or an online marketplace. After engaging with the seller, many parties will sign up for a domain escrow service to help facilitate the remainder of this transaction.
Domains are not tangible, meaning sellers cannot physically hand them off at the time of sale. Therefore the presence of a third party can help to ensure that sellers are paid for their product and buyers gain ownership of the domain.