The internet has been on a continuous upward trajectory over the last decade. According to Statista, the value of global retail eCommerce—just one sector—has risen from obscurity in the late 1990s to a $1.3 trillion industry in 2014. And currently, in 2022, it’s standing at a $5.5 trillion valuation.
Unsurprisingly, eCommerce is still expected to grow to $7.4 trillion in 2025. This simply means that there will be increased demand for domain investors offering premium domain names.
So, if you’re looking to make some extra money as a domain investor, then this article is for you. Let’s get started by understanding what premium domains are and why they can make a good investment.
What are premium domains?
Premium domain names are a subset of domain names that distinguish themselves from others by possessing all of the required characteristics of an ideal domain. They are brief, distinctive, and fit perfectly with the business they represent. They usually also have a top-level domain extension like the “.com.”
Companies that possess premium domain names have significant branding potential. Great domain names, such as Amazon.com and eBay.com, have assisted these businesses in standing out and being easily available to their target customers.
What makes premium domain names unique?
To fully comprehend what distinguishes a premium domain name, you must first grasp the specific benefits it provides a company or a brand. Understand that business owners typically acquire domains to increase brand recognition or simply because they don’t want others to have them.
Many entrepreneurs, however, have made it their mission to discover premium domain names since they are:
- Short and memorable
- Search engine friendly
- Easy to brand or personalize
- Carry well-known extensions like .com, .org, .net, and .io
- Clearly state your service, especially if you’re using keywords
These reasons are just a handful of why premium domains are more popular and will only grow in value.
What is premium domain investing and how do I start?
Premium domain investing is all about purchasing high-quality domain names and reselling them for a profit. It’s no secret that domain investors look for domain names that suit their investing requirements, buy them, and then resell them to entrepreneurs wanting to use the domain name for a website or to other domain investors for a good profit.
As a domain investor, here are a couple of good ways to secure a great domain name:
- Visit and buy from a domain marketplace, such as GoDaddy
- Buy expired domains
- Attend a live-domain auction
- Contact the domain’s owner directly
- Use a great business name generator
Why invest in premium domains
There are several reasons why premium domain investing presents an attractive opportunity for investors or those looking to make some extra money on the side. Here are four reasons why investing in premium domain names can be a good investment.
1. Capital appreciation
Back in the day, you could register a premium domain for a small fee. As time went by and the ecommerce industry bloomed, the value of premium names increased dramatically to the point that Elon Musk had to wait ten years to purchase Tesla.com for $10 million from Stuart Grossman.
Investing in a premium domain name is the best way to secure a digital asset whose value increases with time. Considering the negligible cost of investment and the rewards you can earn from selling sites like cars.com, getting a premium domain name is like striking digital gold.
2. Minimal holding cost
Premium domains have minimal holding costs compared to other assets like real estate, where you may spend significantly on maintenance. Domains only require a yearly renewal fee of $10 per year, and no one else has access to it because you own it.
3. Potential for consistent cashflow
Investing in premium domain names is not only a one-way investment where you’ll only make a living after someone buys your domain name. With domain name leasing, you can rent out your domain name and maintain a steady cash flow until your big buyer comes around.
But leasing isn’t the only way to maintain consistent cash flow; domain name parking involves taking your premium domain live and generating revenue from ads.
4. No barrier to entry
Besides the enormous upside potential on profits, investing in domains has no barrier to entry. Everyone, from a Fortune 500 company to the regular joe on the street, can get into the game. And who knows, you could strike the next golden domain name!
This guest post was provided by Grant Polachek, the head of branding for Squadhelp.com, 3X Inc 5000 startup and disruptive naming agency. Squadhelp has reviewed more than 1 million names and curated a collection of the best available names on the web today. We are also the world’s leading crowdsource naming platform, supporting clients from early-stage startups to Fortune 500 companies.