How Much Does a Domain Name Cost? (2022 Update) | Inc

Tuesday, July 19, 2022
How Much Does a Domain Name Cost? (2022 Update) | Inc

Why is domain name cost such an important issue for new businesses? It’s because a domain name is needed to host a website – and the better the domain name, the higher the cost. With over 1.7 billion domain names sold to date, it’s important to choose the right domain name in an intelligent way.

Asking the question “how much does a domain name cost” is a little bit like asking “how much does a house cost”. The answer will depend greatly on the choices you make and what your underlying needs are.

This article will outline the various options you have, how expensive they are, what hidden costs you might face and how you can get the perfect domain for your project or business.

What kind of domain do you need?

There are multiple factors that will increase domain name cost

  • Certain top-level domains cost more (.com, .org and .inc would cost more than a .biz)
  • Shorter domains tend to cost more (abacus.com will cost more than abacusfinancial.com)
  • Domains with only common English words cost more (medicine.com, hotels.com will be expensive)
  • Country level codes (.fr for France, .es for Spain) can be cheaper but can be a poor choice if you have a global market and need global reach and SEO

Therefore you need to ask yourself the following questions:

  • Do I need my domain to be short and concise?
  • If you are a company, do you want a domain name that is an exact match for your brand? For example, a company called Pathway could purchase pathway.com orpathway.org as exact-match domains
  • Do I have a global audience?

If the answer to these questions is ‘yes’, then you need to consider purchasing a premium domain. Premium domains are those which registrars (domain sellers) know have the highest demand. You’ll pay more than you would for a regular domain. 

What is the domain name cost for budget domains?

If none of the factors above were particularly important, then you can get a domain for $10-20 and the two biggest registrars (sellers) are GoDaddy and Namecheap. You can visit these sites and do a search for available domains.

Budget domains are basically domains that nobody has ever bought before – or bought and decided not to keep. They tend to be long and not particularly memorable. The cost is low and you can generally buy them instantly. Some of the webhosting services will include a domain name for free so if you pay for the hosting annually – they throw in a budget domain name.

What hidden costs can be associated with domain name purchases

Many registrars will offer you a cheap initial price – but the price of renewal can be higher. It’s important to be aware of any promotional introductory price and the full cost of renewing the domain each year.

You will also potentially pay a fee to activate privacy for your domain name purchase. This is a good idea because otherwise, anyone who searches that domain using a WHOIS service will be able to get hold of your contact details.

Also note that buying a domain from one registrar (say GoDaddy) and then transferring the management of that domain to another registrar (say Namecheap) will incur a transfer cost. I personally believe there isn’t much point in paying this because you don’t access your domains frequently. Apart from payment of purchase and renewal, the only time you need access is when you are setting up your domain to point to your website.

What is the domain name cost for premium domains?

A premium domain is one which is marked as highly valuable by registrars.

To give you an idea of how expensive these can be, some of the most expensive transactions (i.e. highest domain name cost) of 2021:

  • Hippo.com $3.3m
  • Christmas.com $3.15m
  • Floor.com $3.14m
  • Marketing.com $2.5m
  • Forge.com $2.2m

Most businesses can’t afford to pay this much for a domain.

Even if you had this much money, an established international brand that owns such a domain will never consider selling to a competitor. That’s why poker.net sold for $750k last year – because the buyers knew that poker.com was not for sale! 

How can I buy a domain that is already owned?

Not all premium domains are owned by genuine businesses. Many of them have been purchased with the sole aim or resale for a profit. The owners bought these domains as investments – hoping that they could sell them later at a price that justified their original investment.

Auction Sites

You can find domain auctions at sites like Sedo, Buydomains, Flippa and Afternic. Here you can browse, search and filter for domains that are listed for auction. If you have previously bid on a product on eBay, then you’ll be familiar with the dynamics of online auctions.

 

Brokerage Services

If there is a specific domain that you want, you can use a WHOIS service to find the registrar and contact them. At this point, the registrar typically offers brokerage services to help you contact the buyer without revealing the buyer’s identity. Naturally, they charge for this go-between service.

At the time of writing, if you wish to get GoDaddy’s help buying football.com (for example), that will cost you $69.95 for this service – plus an additional 20% of the sale.

Owners of premium domains have costs annually and have invested to buy this domain in the first place. It’s unrealistic to expect to buy such a domain for $10 or $100. You are likely talking thousands of dollars. Adding 20% on top to maintain the buyer’s privacy and not to be able to negotiate with them directly – you have to ask yourself if its worth it?

How can I reduce my domain name cost?

Once you have identified your domain needs, you’re naturally going to ask “is there anything I can do to reduce the necessary outlay?” There are several strategies that you can use to reduce your spend.

Use a budget domain name

If you don’t have customers trying to find you on the web – and if brand is not a particularly important aspect then you can find a cheap domain name by just making the domain name longer and longer, less memorable and less common. While no-one would naturally remember it, sometimes this doesn’t matter, particularly if you are just linking to it from one or two dedicated sources. Make your domain the longest and least-memorable as necessary to bring that cost down.

Buy a domain and hosting package

If you don’t have a web hosting solution, you will need one. By investigating the hosting and domain purchase at the same time, you might find a package that includes a domain for free. If you don’t know who will be building the website or if you’re not ready to put up a site yet, then this option may not be for you.

Use expired domain name sites

There are web platforms who list domain names that expire. This means that there was a previous owner who did not renew. Freshdrop and ExpiredDomains are both examples of sites like this. The good news is that buying a domain that has expired is often the same price as what the original person paid for it in the first place – i.e. you avoid paying a premium cost.

The downside is that if these domains were truly fantastic, short and memorable –then why didn’t their owner renew them? So don’t pin all your hopes on finding the domain of your dreams in this way

Consider other TLDs

Because .com is the standard top-level domain (TLD), most people regard it as being the best. However, there are other TLDs that perform equally well in Google and other search engines and engender high trust among customers.

In particular, .Inc Domains have a strong perception among customers and premium domains are available at a fixed price of $1999. So even if you can’t findvoice.com (which would cost you $30m anyway), you can grab voice.inc for $1999 (true at the time of writing).

Consider a multi-year purchase

In general, when you purchase a domain, you have the option of deciding how many years you wish to purchase for. If you’re not sure, a 2 year period is generally enough to know if you’re really going to be using this domain in the long term. Be aware that the longer you purchase for (the more years) the greater deduction in price you will be offered. Therefore, if you just know you will be using this domain for many years to come, then buying for more years can be an effective way to bring down the total cost.

Should I buy more than one domain?

This depends. If you have a recognized brand, then you need to really own your exact match domain (i.e. the domain that is the exact name of your company). And you need to own it across a number of the top TLDs.

The reason for this is obvious. If you don’t purchase them, someone else will. Those could be bad actors who wish to impersonate your company either to steal your customers or to steal from your customers (spammers and fraudsters). The cost of litigation, pursuing these companies, contacting the registrars and waiting for court proceedings or the patent office to make a decision is extremely costly in terms of time and money. Therefore, you need to consider these costs just as much as domain name cost. In summary, you need to buy a portfolio of domains to protect your brand.

If however, you’ve just started a new business venture, then one domain might be enough. In this instance, the key feature is whether that domain helps prospects and customers find you. If it is short and memorable – to the point where people type it directly into the browser- then that’s your mission accomplished. There is no need to buy 100 domains – you just need one short, memorable, exact-match domain.

Conclusion

This article outlined how you can assess your domain name needs and how you can decide whether you need a premium domain name or a budget one. This is the main determinant to domain name cost and a factor that needs to be considered carefully. We introduced the concepts of exact-match domain and the characteristics of good domains – namely short, memorable and exact-match.

We discussed potential hidden costs of domains (privacy fees, renewals) and why some registrars will offer you an initial discount.

Assuming that you don’t have hundreds of thousands of dollars to spend, we outlined ways you can reduce the amount you spend by considering expired domains and using other TLDs such as .Inc Domains which have premium domains at a lower cost.

Finally, we explained why established brands will purchase a large portfolio of domains, while a brand new project might just need one really good domain. Choose wisely because purchasing a domain name is one of the most important decisions you will make!

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