In today’s world of rampant technological advancement, a company or professional’s online presence can often be the difference between leading the market and obscurity. As of January 2020, there were more than 1.7 million websites in existence with that number growing daily. By utilizing a premium domain name in 2020 and beyond, you can improve your website’s chances of having the effect you desire. Read on to learn more about premium domain names and their benefits.

What Is A Premium Domain Name?

The dictionary offers a variety of definitions for the word premium, but the one that best fits domain names is “superior in quality; high in price or value”.

What makes a domain premium are characteristics such as:

1. Have a good top-level domain (TLD), usually a “.com” or “.org”
2. Is brief, concise, easy to remember, and an exact match to what is being sold
3. Is a generic name that has industry-wide appeal
4. Has an established brand reputation inside the market
5. Already ranks high on search engine results

Examples of Premium domains with these five characteristics can be found by looking at the Top 10 most expensive domains ever sold.

The truth is, there is no official definition of a “premium domain”, just like there is no official definition of an art “masterpiece”. A domain becomes “premium” when others are willing to spend a lot of money to get it.

The word “premium” can also be defined as “very valuable, usually because of scarcity”. It has been more than 30 years since the first domain name was registered, and today there are over 360 million domain names registered in the world. 168 million of these (about half) are using the “.com” extension. High-quality premium domains that meet all five characteristics of a quality premium are hard to come by, making them valuable on the market, and expensive to purchase.

Benefits Of Buying A Premium Domain

The most expensive retail space in America is on Upper 5th Avenue in New York City, leasing at $2,250 per square foot per year. The LEGO Store Fifth Avenue, for example, measures 7,100 square feet. So the math says LEGO is paying about $16 million per year to rent that space.

The 5th Avenue retail space is incredibly expensive, yet there are seldom any vacancies (at least pre-COVID). This means a lot of companies are willing to pay a very high price to be seen on 5th Avenue.

Premium domains are the 5th Avenues of the internet. They are not going to be cheap, but there are some major benefits that might make it worth the investment:

• Recognition and Credibility

Many of the stores on 5th Avenue are labeled by the companies as “flagship stores”. This means the company considers it the lead store meant to showcase its brand and products. These companies are essentially “showing off” themselves to potential customers. Companies that want to be the best need to act like the best, and that means putting up flagship stores in ridiculously expensive areas. Perhaps that flagship store will never turn a profit, but the company considers its flagship lease to be a worthy investment.

Your domain is your online flagship. Invest in a prime location so you can show yourself off. You want your brand to be sitting on the internet 5th Avenue, not in a strip mall next to a Chinese take-out.

• Brand Quality

You have invested a lot of marketing dollars into your brand, so don’t go cheap on your domain. Your company will never convince customers you are a prime player in your market if your domain is a long, hyphenated mess. The quality of your domain name should reflect the quality of your brand.

• The First Impression

When your customer wants to research your product, your domain name will be the first thing they see from your company, even before the website loads. Putting a sub-par domain name on an impressive website is like painting a camo paint pattern on a Maserati. Do you really want your first impression to be camo paint? Customers will look away without even realizing there is a Maserati underneath.

• Marketing Made Easy

Your domain is a marketing tool and buying a premium domain should be part of your marketing investment. Having a simple, memorable domain name that perfectly reflects your product will make your marketing team’s job so much easier. When you are finally big enough to buy that Super Bowl commercial time, you don’t want to be forced to show the world some hard-to-read, amateur-looking, “.biz” domain name.

• Search Engine Optimization Made Easy

Having a short domain name serves as a primary keyword that can push your website up the search rankings. Purchasing a domain that is already ranking high gives you a great start.

Theoretically, you won’t even need to depend on search engines to drive traffic because your domain name will be so easy to remember that customers will type it directly into their browser, rather than searching. For example, a customer wanting to buy a hotel room will likely start their journey on Hotels.com. The domain name exactly matches what the customer is looking for.

• Resale Value

Premium domain names are an investment that tends to appreciate in value. If your company ever decides to change direction and re-brand, your premium domains should fetch a nice return on the resale market. Your domain may also add value to your company in any future merger or acquisition.

How To Get A Premium Domain At A Fair Price?

You may be wondering how to get a premium domain cheap — but there is no such thing as a “cheap premium domain”; that is an oxymoron. If the value of a domain does not drive a high asking price, then it likely is not “premium”.

Rather than looking for premium domains that have a “cheap price”, you should be looking for a premium domain that has a “fair price”. You want a domain that can bring you a financial return that is equal to or greater than the Premium domain’s price. Don’t be afraid to spend $100K on premium domains if your numbers guy says it will bring $1M in additional sales.

You won’t find art masterpieces at a flea market, and you are not going to find a premium domain name sitting around a common registrar, selling for $10. If you are serious about wanting to invest in a premium domain name, you should seek the help of a Premium domains name broker

What Is A Premium Domain Broker?

A premium domain broker is an independent, third-party agent that is an expert at buying premium domains. Their services should include valuing the domain to set the best offer price, making contact with the current owners, and negotiating on behalf of the buyer.

Some of the big-name registrars have their own brokers for hire, but a bigger broker does not always mean a better broker. Serious buyers should seek a broker that can exclusively work on your deal. You will want someone to put the time and effort in to value the Premium domains appropriately and negotiate effectively. You will also want a broker who has experience with large premium domain name deals because they will likely be negotiating with industry leaders.

One of the keys to receiving a fair price is to keep the buyer anonymous. If a seller knows a buyer has deep pockets, they may greatly inflate their asking price. Other times secrecy is needed because the domain transfer is part of a larger merger or acquisition that can’t be made public. If you are a company, celebrity, politician, or high-net-worth individual who needs to stay below the radar, then hire a broker that specializes in stealth acquisitions of domain names.

Conclusion

Oftentimes, purchasing a premium domain requires patience and a long-term strategy. It is not uncommon for negotiations to take 6-18 months.

Elon Musk says it took him over 10 years to secure Tesla.com. During that time, he stuck with Teslamoters.com, but he never stopped pursuing his perfect domain name. He wanted a name that was shorter and did not box his brand solely into the car industry. Even a company with deep pockets had to patiently wait for the owner to be ready to sell.

A company not willing to sell its domain today may be open to it next year. You will want a broker that can stand beside you for the long run, and someone who can help you monitor the current owner to look for sudden changes that may make them more willing to sell.

Premium domains provide your website with the best chance for success. If you’re looking to secure your own premium domain names, the brokerage team at VPN.com can help. Check out how today