Domain Investing 101
Do you need to register a domain name?
Your domain name is literally your brand and online business window to the world.
There is estimated to be in excess of 150 million domain names registered worldwide, and more are created every day.
It is very important that you understand that you can never “own” a domain name. This is why you have to renew your domain name every year! Failure to do so may result in you loosing your domain name forever.
There are people out there hunting expiring domain names, buying them and then offering the domain name back to the previous owner (who didn’t notice they had not renewed it) for a large amount of money.
This has actually happened to businesses we know. This is one of the reasons there are domain lawyers. You can register a domain name for 10 years if you are slightly forgetful and don’t want to worry about this.
The easiest way to register a domain name is to keep it with a large well known and reputable domain registration platform.
We do not offer this service, but we can direct you to companies that do. See our list.
What happens when your domain name expires?
Don’t worry, whichever company you register your domain name with will send you many reminders by email to tell you to renew it. Even if you forget you often have a grace period past the expiry date which allows you to renew it.
How do you choose a good domain name?
A domain name will play an important role in your website’s identity. This being said, do not over think it and buy something that works for you and you can comfortably afford.
Which domain extension should you choose?
Ideally, we suggest choosing a .com. The reason is it is the most trusted and recognised domain extension. A .com can cover a multitude of website businesses including, business, educational, governmental, charitable etc.
It is worth paying a premium for a .com as it shows you are serious about your business. However, if you look below you will see our write-up on extensions and you can make your own informed decision on which domain extension your website needs.
Basic domain name information for beginners
You may have some basic questions when you are looking to buy a domain name and below we have endeavoured to answer the most common domain name questions for beginners.
What are domain names?
A domain name simply forms your website address.
For example:
You want to set up an online sweet shop and sell sweets to your visitors. If you rented a physical shop on the high street your shop would come with an address for people to find you. The same occurs when you buy a domain name, it helps people find your online shop.
Why use a countries extension and not another extension?
You might be setting up a directory for British plumbers and so using .co.uk makes sense for your website. It is also an acceptable alternative to a .com if you can not find or afford the .com extension for the domain name you want.
What is a TLD?
When you see someone referring to a TLD, they are referring to the extension part of the domain name only. TLD stands for Top Level Domain. TLD’s are the most sought after and valuable domain names.
Why are .io domain extensions so expensive?
.io extensions became trendy very quickly with Tech startups, hence the price tag increase.
Country domain extensions
Some businesses like to use their countries domain extension for their website. It is often cheaper to own this extension than the .com and also is useful if you intend to conduct most your business in your country.
Examples:
.co.uk and .uk is used by British businesses.
.de is used for German companies.
.us is used for The United States.
Which are the most popular TLD’s?
1 .com (commercial business) is by far the most popular extension and currently over 50% of the worlds websites end in .com
2 .net (network) is the next most used.
3 .org (organisation) is the next most popular.
4. Country codes like .us, .de, .uk and more.
5 All other domain extensions.
Which are the most sought after TLD’s?
.com, .io, .net and .co
What can you include in a domain name?
Domain names have two parts.
The first:
The first part of a domain name can be a combination of numbers and letters and you can also include hyphens, although not at the beginning or end of your domain name.
For example:
techpremiumdomains.com the techpremiumdomains is the first part of a domain name.
A domain name must have at least three letters, which is why you never see a two letter domain. The maximum combination of letters and numbers is 63 characters long.
Domain names are not case sensitive, so you will always see lower case domain names only. No capital letters.
Domain names can be in different languages, so you will see Chinese and Arabic characters and not just Latin based letters. Although, latin based domain names are the most common and valuable.
The second:
The second part of a domain name is called an extension.
There are hundreds of internet domain extensions for you to choose from. The domain extension is the letters used straight after your first part of the domain name.
For example:
techpremiumdomains.com the techpremiumdomains is the first part of a domain name and the second part is the .com (extension)
.com is the most common domain extension that you will be familiar with. However you might also recognise domain names ending in .org, .net, .co, and more.
.org is usually used for non profit websites such as charities, open source projects, NGOs and educational platforms.
.gov is used by official government websites. You must meet eligibility requirements and submit an authorisation letter to apply to have this extension.
.io although this did not originally start out as a Tech domain extension, it has become so popular amongst Tech startups that it is now recognised as the unofficial Tech domain extension.
Finally ….
Why are domain extensions useful?
The extension can be used to highlight important aspects to your business or organisation.
A .com extension covers all aspects of business and organisations and they can be from anywhere in the world. A country extension can highlight where your business is based. An extension can highlight if you are a charity or government body.
Here is a list of all domain extensions you can choose from.
Protecting your domain name
Lock your domain name with your registration company. This simply makes it harder for someone to try to steal your domain name by trying to transfer out your domain name without your permission.
Can you reserve a domain name?
No!
You can (sometimes) buy a domain name and pay in instalments over a specified time period.
You may also (sometimes) lease a domain name to use for your website, and even take an option to buy later on.
You can not however reserve a domain name, you must put down hard cash.
Here are some basic tips when choosing a domain name for your business
1. Ensure that your domain name is easy to spell, pronounce and explain. This includes ideally ensuring non English speaking people can understand it too. If you need to explain to people your domain name or repeat its details a few times you might need a different domain name.
2. Ideally, you want your domain name to be very easy to remember and reinforce your brand. If you already have a company, then you could use your companies name for the domain. If you have an existing trade mark you could use that as your domain name.
3. You may wish to register more than one domain name. You may have a few brands and want to register a domain name for each one.
4. Many businesses register their domain name with a few of the most popular extensions. So, you may have your domain name “bobstoys” registered with .com and .net and .uk for example. The reason people do this is to protect their brand and reduce the chance of a fake site trying to redirect traffic from yours or harm your image.
5. Some businesses go as far as registering mis-spellings of their website.
6. If you are looking to trade worldwide it is worth thinking about registering the local countries domain extension too.
7. Ideally avoid registering a domain name that might later be taken from you. For example a trademarked name or a variety on a well established companies name or one of your direct competitors names.
8. You could use your brand name or keywords for your domain name.
9. A domain name that tells a visitor what your business does before they even click on your link is a popular choice. For example, we own spendingcrypto.com and buybitcoinotc.com can you work out what these websites might do before ever visiting them?
10. Try to avoid using hyphens and numbers (sometimes it works) as it makes it harder to pronounce, spell and remember.
Startup domain names
If you are a startup you have more room to manoeuvre when deciding upon a domain name.
You can find a domain name that will fit your brand and business. You might even consider changing your brand or business name to match a domain name you find.
How much does it typically cost to register and renew a domain name?
The general rule of thumb is it costs around $9-$10 a year to register a domain name. It can be less for an extension that is not as popular as a .com. It is a similar price to renew a domain name yearly. Some platforms give you a small discount if you renew or register for a longer period of time.
What should you do if someone has registered a domain name you want?
First, you need to check that the domain name you want is in use as an actual website. If it is not in use you may try to approach the owner and buy it from them. If you do not wish to buy if from them, then we suggest simply moving on and finding another domain name to use.
What do you do if you find a domain name is registered as your companies name?
If someone has registered a domain name that you might have a valid claim over you may need to contact a domain lawyer. This can be costly and difficult to dispute, especially if they are using the domain as a real business website.
Here are three options available to you if you find a domain name you like
1
Contact the owner and try to buy the domain name.
2
Wait for the domain name to expire and then register it for yourself.
3
If you truly believe you have a stronger claim to a domain name than the owner, then you can approach a domain lawyer and look to take that domain from the current owner. This takes time and money. If the domain is not an established website and business you might have a higher chance of success.
Real life case study (disputed domain)
This actually happened to us in 2017.
We owned a domain name that a fortune 500 company decide that they had a claim. The domain name we owned was not an established business and we simply bought it to sell on in the future for a profit.
We did however have it parked so we could earn an income from re-directed traffic. We did not however receive any income from it as it was a new domain name in a very new industry sector with little traffic.
The fortune 500 company sent us a very aggressive letter from their lawyers stating that they owned the trademark to a particular business word (industry) in Europe and we did not have their permission to use it. They were also not happy that we had our domain available to lend to others (parked). Finally, they demanded that we immediately withdraw the parking and transfer the domain name (give them for free) to them.
We responded by saying that they did not have a right to the domain name. We did not know that they owned the trademark and we did not knowingly use this domain name to cause any harm to their business. We agreed we would immediately stop the option for parking and we did so that day. One of the words in the domain name was bitcoin and we highlighted that their business did not accept bitcoin as payments and this domain was specifically for a company accepting bitcoin. We refused to hand over the domain and reminded them that we had the domain for sale for only $300 and they could purchase it from us. We never heard back from their lawyers.
The funny thing about this is it probably cost the company more money to have their lawyers get involved with the initial letter than it would have been for them to simply buy the domain we had listed for asking price $300.
What is domain parking?
This is also often referred to as cash parking. It is similar to affiliate advertising. A parked domain is the leveraging of advertisements on a parked web domain in order to receive an income on an otherwise inactive domain. Usually a parked website is a non functioning website that has a landing page containing advertisements of which you receive an income for allowing to be placed on your domain.
What do you need to do to maintain a domain name?
Simply renew the registration of your domain name yearly.
How to reduce the chances of a domain name dispute?
The main reason disputes come up is someone registers a domain name too similar to another existing business.
The best way to reduce this risk is to choose a name that is not obviously similar to a famous brand, especially if you are looking to build a website literally selling the same goods and services.
Avoid registering a domain name that uses a competitors trading name or trademark.
There are many businesses with similar names and different extensions but they work in different industries. If in doubt you could check with a domain lawyer when you have chosen a domain name you like.
How are domain name disputes usually resolved?
Domain name registrars operate a first come first serve basis.
Over time using a domain name and website will help establish your right to it. The more time and the more your business uses this name the better.
It is important to remember that although you may register a domain name it does not automatically mean that you have the right to it. Especially if it infringes upon a trademark or existing product.
How do you work out the value of a domain name?
This is a tough question. It is really worth whatever someone is willing to pay for it. If you happen to find someone that really wants this domain name, then you can sell it for a princely sum.
Some of the things that can affect the price of a domain name
1 The SEO-friendliness.
2 Age of the domain. Usually the older the domain the higher the value.
3 Any penalties from search engines or does the domain have a bad reputation online? (bad history).
4 If the websites URL contains a very popular keyword it can be worth more.
5 The extension. For example .com as we know might mean that the domain is worth more.
6 Length of the domain. A 3 letter or 5 letter domain name is highly sought after.
7 SEO rankings and established links (quantity and quality)
8 If the domain is a website and not just a domain name then it could cost more.
9 The language of a domain name. Latin based usually means a higher price tag.
10 Commerciality; there is a difference in value between non-commercial and commercial words.
11 Is the domain name brandable? Short and memorable.
12 History of the domain name.
13 Traffic. Does the domain name have established traffic?
14 Social media presence as well as if it has been banned from any.
These two factors often play out in a dispute
1
Large companies with large resources (money and lawyers) at their disposal may decide to use this to run up large bills to force a settlement or even a domain transfer.
2
The best chance you have to win a dispute is to prove that the other party registered the domain in bad faith. Usually this means, someone bought the domain (related to your trademark) to sell to you (force you to buy it so your competitors don’t) or use the website to make money and pretending it has something to do with your business.
If you have any issues we recommend contacting a knowledgeable domain law firm.
We work with international domain lawyers and can help you if you have a domain name dispute.
Further learning …
Please visit our blog section of this website to learn more about domain investing and ownership.
Read our domain dictionary to learn the industry words and meaning.
Visit our domain articles here
Alternatively, we also have a domain business directory here where you will find fantastic free links and resources for the domain industry.
Visit our domain business directory here
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