As domain brokers, we’re constantly in talks with companies about why they should acquire, upgrade and/or launch on a premium domain name instead of settling for a lower quality one. Inevitably, whether we’ve pitched the sale to a company or they have inquired about a domain we represent, one of the biggest deciding factors is the cost of the acquisition.
Oftentimes when finally presenting the potential end user with a price for a domain, we’ll get a response that it does not fit within their “budget”. Many investors negotiating a domain sale would likely cringe when they receive this type of response in their inbox and assume the deal is dead. However, this is actually a great opportunity to further educate the prospective buyer about exactly what kind of purchase they are considering and how it can impact their business.
The purchase of a premium domain name is an investment in an appreciating asset that offers a lifetime of utility, SEO, security and enhanced brand alignment. It provides the business a return on that investment that is quantifiable and pays dividends in perpetuity. This is much different than an expense coming out of a budget which is usually a recurring cost (for example, a web hosting bill).
So, we can actually agree with the end user prospect who exclaims that the price is too high for their budget. The domain they want (or need) is simply too valuable to be denoted as a line item expense. If you’re a growing business with aspirations to become a heavyweight in your industry, then the acquisition of the perfect URL to match your company name is one of the most important investments you can make and is not likely to fit into your preset budget.
The world is becoming more and more digitally connected and as tens of millions+ people gain access to the Internet annually, it is for certain that the best one word, short, highly brandable and keyword .com domains will continue to rise in value and become increasingly expensive. The biggest companies on earth already recognize this and have made significant investments in domain names. Not only have they acquired their brand matching .com but many also hold hundreds if not thousands of ancillary domains that describe the products or services they offer. That said, if you zoom out, it is still very early and there are great opportunities for businesses and individuals to capitalize from investments in domain name assets.
Authored by: Michael Law, Grit Brokerage Domain Broker
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Questions this post answers
Is a premium domain an expense or an investment?
The post calls it an investment in an appreciating asset that offers lifetime utility, SEO, security and brand alignment. It contrasts this with a recurring expense such as a web hosting bill that comes out of a budget.
What should a seller do when a buyer says it is over budget?
The post says this is a chance to educate the buyer about what they are considering and how it affects their business. A domain this valuable is too important to treat as a line item expense.
Do large companies invest in domain names?
Yes. The post says the biggest companies have made significant investments in domains. Many own their brand matching .com plus hundreds or thousands of ancillary domains that describe their products or services.