Renting a retail location on Madison Avenue can cost upwards of $1,500 per square foot, while retail units in Columbus, Ohio, can go for a mere $8.57 per square foot. It’s all about location and demand: Location drives traffic and interest, and demand drives prices. The same can be said for the online equivalent of an oceanfront property or a store on the Magnificent Mile: a Web domain.
There’s no single element more important to your online (and even offline) business success than a memorable, recognizable, and brand-appropriate domain name. If you’re currently in the startup phase, gearing up for a rebrand, or preparing to re-launch, you should carefully select your online home.
Are you still doubting the importance of your domain? Just look to the market to see how valuable these seemingly simple domain names can be. In 2007, VacationRentals.com sold for $35 million. That’s a lot of zeros for 15 letters. (A close contender, PrivateJet.com, sold for $30.18 million.)
What’s in a Name?
If you’re a new startup without an existing brand identity, the sky’s the limit. Depending on your industry and overall identity, you can go the literal route (Dating.com) or create an abstract name that still expresses who you are (Zoosk.com).
Going the latter route is obviously easier from a purchase perspective, but abstraction can create problems, such as consumers misspelling or forgetting the name. This hasn’t stopped Google, but it’s a serious consideration.
Here are some essential tips on choosing your company’s best domain option:
1) Dot-com is the way to go: There are dozens of new address extensions (.org, .ly, .net), but if you intend to have serious online credibility, a .com address is a must.
2) Make it short and sweet: A Web address is not the place to be wordy. The shorter your domain is, the easier it will be to remember.
3) Avoid creative spellings: Some companies choose alternative spellings as a way to secure a .com address because most traditional domain names have been gobbled up. If you’re a startup selling tires, it may sound like a good idea to brand yourself “Tyres.com,” but this is generally an ill-conceived strategy. You may just end up funneling more business to Tires.com. Don’t take that risk.
4) Don’t forget SEO: A descriptive domain name means it will be easier for consumers to find you online. People don’t usually search for “Zappos,” but “sexy shoes” is a popular search term for shoppers.
5) Avoid hyphens and special characters: Just like alternative spellings, special characters throw search engines and human brains off in a big way. Never buy Checkmate-chess-supplies.com just because Checkmatechesssupplies.com is taken.
How Much Is Too Much to Spend on a Domain?
When domain names sell for millions of dollars, it’s hard to know what’s considered a logical budget. This is primarily determined by your company’s individual launch budget and the competitiveness of your industry. Hotels.com sold for $11 million, and I doubt that David Roche has ever regretted his decision.
Most domains sell for between $5,000 and $20,000, but Fred Wilson, a venture capitalist, suggests that startups invest around $50,000 in a quality domain name. This is no small budget item for most startups, so you need to seriously consider how the domain name will improve your ability to be competitive in the market, boost your SEO or marketing efforts, and bring the right kind of traffic to your business. There are still domains that can be had for much less, but these are harder to find. It also might take a longer negotiation period before you can secure the property.
Should You Buy Multiple Domains?
As you shop for your domain name, consider common misspellings or phonetically similar spelling assumptions, and purchase those if they’re available. You should also buy the natural plural version of your domain (Handbag.com and Handbags.com should ideally go together.).
It’s usually easy, inexpensive, and strategically sound to purchase .net versions of your domain. Although you don’t want a mountain of redirects to your parent domain, you should grab the obvious ones to prevent your competitors from doing the same.
Your domain should be the very first marketing and branding element you decide upon. Remember: you don’t want to change your address because it essentially puts your SEO and branding efforts back at square one.
Searching for the perfect domain name is like looking for the right storefront for your business: You wouldn’t lease a space out in the middle of nowhere with no foot traffic, access to highways, or ability to expand. By the same token, you need a domain name that fits your brand, grows your business, and ultimately, makes your company easy to find.
Daniel Wesley is the founder and CEO of CreditLoan.com, a website that educates consumers about various personal finance issues. Among some of the topics discussed are bad credit loans, credit cards, auto financing, and many other credit and financial help issues. Connect with Daniel on Twitter and Google+.