Domain Buying & Investment Guide
Brandable domains are ones which can be easily turned into a recognizable brand. They are generally short, easy to pronounce, and have no alternative spelling(s). The brandability of a domain is highly important, especially for enterprises which are designed and expected to reach an extremely large audience. This is not to say that brandable domains are not useful for other projects, but the general high cost (unless they are hand registered) of such domains will put them out of the reach of most small entrepreneurs.
Brandable domains can also be an easy way to get into domain investment, as they are generally less expensive than other premium domains (assuming they are not single-keyword domains). By putting in a bit of time and expending creativity, a diligent domain investor can come up with good brandable domains for hand registration, or scour databases for domains which might be for sale at a reasonable price, or get these domains at auction.
Things to keep in mind when evaluating the brandability of a domain are:
- Ease of spelling
- Ease of pronunciation
- Length (shorter is better)
- No or few variety in spelling
- Be evocative of the product or service which will be offered on the domain
- If the goal is for international expansion, it should be verified that the domain wording does not mean something unwholesome in another language
Keyword Match Domains
Keyword match domains have always been popular and continue to lead the market in desirability and price, especially if they are single-word domains of highly valuable categories. The reason for the popularity and importance of keyword-based domains is not only the ease of branding (mostly in case of single-word domains), but the ability of those domains to become category defining web properties with the ability for high search engine rankings (assuming proper SEO implementation and high end content and marketing strategy).
Things to keep in mind when buying or investing in keyword-based domains are:
- Single-word domains are the most valuable
- The more lucrative the market for the keyword category, the more expensive the domain can be
- The domain should at most have two words (as an investment) and three words (for end use)
- Singular version of a word is exponentially more valuable than the plural, as it provides for not only topic specific property development, but huge branding opportunity
- City and country names can be valuable if it is of a major city or country. Other smaller cities can also be of value, depending on city demographics
A numeric domain is one where it is comprised of numerals exclusively (no letters or dashes). Currently, the popularity of one-, two-, three-, four-, and five-character numeric domains is due to the demand from Chinese investors, but has the market for such domains has the potential to collapse if the Chinese demand dries up, so it is important to understand the risks before investing in numeric domains for a future (profitable) sale. If you are looking to buy as an end user or an investor, you can expect to pay several hundred to several thousand dollars for four- and five-character numeric domains. Prices for three-character numeric domains can range from tens of thousands to hundreds of thousands of dollars. Two- and one-character numeric domains are very rare, and if available for sale have prices reaching into the millions of dollars.
Things to keep in mind when buying numeric domains:
- The shorter the numeric domain the better
- Paired repeating numbers are considered lucky and valuable
- Sequences (e.g. 1234.com or 789.com) within the domain increase the value
- Certain numbers are not desirable, depending on position and value. The number 4 is not a desirable number to have in a numeric domain, and neither is zero (unless it is at the end of the domain). The number 8 on the other hand is highly desirable. The numbers 9 and 6 are also desirable, but not as much as 8. The domain also gains value if the pronunciation of the numbers in the domain vaguely corresponds to Chinese words.
- Patterns (e.g. 188188.com or 9090.com) are valuable Keep in mind that these are general rules, but there are many other factors that can contribute to the value of a domain, numeric or otherwise.
4 & 5 Letter Domains
Like numeric domains, the 4-letter domain market is mainly comprised of Chinese investors, so it is important to keep in mind the needs, and wants of those buyers when investing in such domains. Of course, if you are purchasing the domain as an end user, then the considerations fall more under the branding section criteria.
Things to keep in mind when buying (investing) in 4- and 5-letter domains:
- There should be no numbers or dashes within the domain
- Patterns (e.g. htht.com or pddd.com) are highly valuable
- The first and late letter of the domain play a significant role in determining the value. For example, if the initial letters (or the entire domain for that matter) are acronyms (e.g. Dr or PC), they can impact the value of the domain in a positive way. Similarly, if the last letter(s) are shorthand or acronyms (e.g. tv or HK for Hong Kong), then the value is also considerably enhanced.
- Vowels are not as valuable as other letters (for Chinese buyers), so keep that in mind if your purchase is an investment. The letters A, E, I, O, U (and V) will reduce the desirability of a domain, especially if they are the first letter of the domain.
- Pronounceable domains have an improved value. Examples of such domains are CVCV, VCVC (in domaining jargon 'V' stands for vowel, and 'C' stands for consonant).