Last updated: September 30, 2020
Expert Guide To Buying A Registered Domain Name In 2020
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Selecting the right domain name for your website is one of the most critical aspects of establishing yourself online. Your domain name has to be engaging enough to catch the eye, evoke your business in the mind's eye of anyone who sees it, and memorable (and pithy) enough for easy recall.
What to Do When Your Perfect Name Is Taken?
What do you do when you've picked out a name and selected a hosting provider, but your perfect domain name's already been registered by someone else? Sure, you may have access to other domain suffixes like ".biz" or ".net" or even ".tv", but if you've got your heart and mind set on getting YourSite.com when someone else already owns it, you'll need to enter the world of aftermarket domains.
Registered domains that don't have a website associated with them have often been purchased by speculators who are banking on making a profit from buying a name they hope will be irresistible to a future purchaser. In the early days of the Web, speculative purchases gave rise to such shenanigans as URL (uniform resource locator) hijacking and "typosquatting."
These terms refer to the purchase of a domain name in order to strong-arming a company or person into purchasing a site with their name (or the name of one of their properties), as well as the (slightly) less nefarious practice of purchasing domains with spellings that are very close to, or deliberate misspellings of, well-known domain names in order to collect information, install malware, or—yet again—force a business owner into purchasing the domain. Thankfully, these and other cybercrimes have become the target of serious prosecution.
Domain Brokers and Auction Sites
Today, domain names have reached a level of commoditization that means most folks who buy up a bevy of names are more likely seeking a modest profit than malicious mayhem. Domain brokers and auction sites are as easy to access and use as eBay, and using one is, for most, much more attractive than trying to track down the individual owner of a domain on their own and work out a deal. These sites add some much-needed security and accountability to the process, protecting both you as a customer and the domain vendor from fraud or other chicanery. You may also be able to access after-market domains through your hosting provider, depending on the features they offer.
If your chosen domain name is an essential part of your brand and company, then it's worth the time and effort to investigate these services in order to obtain it.
Also See: Our Guide to Buying Dropped Domains
Editor's note: Reply All did a few podcast episodes (here related to the topic of tracking down and buying domains that are already registered. Worth a listen for the sleuthing tips.
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How to Buy a Domain that's Already Registered
Domains once registered by another user are referred to as aftermarket, or secondary market domains. They become available for purchase when they expire, or when the owner decides to sell it. These domains often hold great inbound link, traffic, and branding value. Some have sold for millions. Before getting started in the market, it's best to know the landscape. Here are the basics.
How It Works
Some aftermarket domains are put on auction via marketplace sites such as:
Think of it like eBay for domain names.
Escrow.com offers domain names on escrow - where they're held by a third party until the transaction is complete.
On JustDropped.com, you can research which domain names have expired in the last 24 hours, 7 days, 30 days or 60 days.
SnapNames.com will register expiring domains on your behalf. If two or more people attempt to "snap" the same expiring name, it will be placed up for auction between the interested parties.
According to iGoldRush.com, there's sometimes more than 20,000 domains expiring on one day.
Why It Works
A good domain name can be hard to come by - many are already taken. It's worth researching if the domain you really want is up for auction.
A great domain name that is memorable and brandable allows you to "punch above your weight."
Measuring Domain Value
Domains are valuable Internet real estate because unlike a search engine, there's no middleman between you and the visitor.
Domain price trends are not detached from the rest of the economy, they are comparable to the fluctuations of stock prices.
According to Sedo.com, prices tend to run parallel to the NASDAQ 100 index, the stock prices of Google, or total revenues from online marketing in the U.S.
Sedo research shows that domains rapidly gained value between 2006 and 2007 with prices peaking at a 76% YoY increase, before falling by 34% in the subsequent five quarters.
They have steadily regained their strength since, with average sales prices climbing to an all-time high in May 2011 at a total sales volume of $84.4 million.
Sedo.com is among the world's largest global domain name marketplaces, selling 3,500 domains per month for a total of approximately $6 million in transaction volume.
In July 2013, $2.3 million of domain transactions took place on Sedo.com and Afternic.com withinone week.
Prices vary depending on factors such as keyword use, search engine ranking, traffic, etc. Generally, the higher the bid price, the higher the commercial value of that domain.
According to DomainNameSales.com, most domain name re-sales occur between $5,000 to $80,000.
The average price of a common phrase ending in .com hovers between $9,000 and $30,000.
Every week, the collective domain name industry consistently sells an estimated $5-10 million of domains at prices buyers are more than willing to pay.
Check out Namebio.com, which show historical sale prices, allowing you to judge worth vs. sale prices.
Examples of high-value domains include: HomeLoans.com, CriminalLawyer.com, BusinessSoftware.com, TowerCraneRental.com, and CommercialCoffeeMachines.com.
Some of the most expensive domains ever sold were:
- Insure.com - $16 million in 2009
- Sex.com - $13 million in 2010
- Fund.com - $10 million in 2008
- Business.com - $7.5 million in 1999
- HolidaInn.com - $3 million in 1995
Test a Domain before Buying It
Last thing you want is a domain on Google's blacklist.
Do a Google site search (site:yourdomain.com) and check Google's Penalty Tool to verify an aftermarket domain doesn't have any penalties against it.
Check the Internet Archive's Wayback Machine (archive.org) to indicate the site's industry and the type of content that was published.
Conduct a search of brand-related queries to identify any issues prior users had, as well as any past complaints that could damage future traffic.
Check UpName.com to see how the domain has changed hands over the years.
- Top 40 Costliest Domain Names Ever Sold - fedobe.com
- IDNX: The Domain Name Price Index - sedo.com
- Buying Domains in the Aftermarket? Read this First - websitemagazine.com
- Why a Premium Domain Name - domainnamesales.com
- Sedo Has Sold over $35 Million in Domains Sales YTD - This Week Sedo and Afternic Add Another $2.3 Million in Weekly Sales - robbiesblog.com
- Finding and Buying Expired Domain Names - igoldrush.com
Last update: Dec 19th, 2016