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Why People Pay Big Bucks for Aftermarket Domains…

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You can easily register a domain name for less than $15, but what if the perfect domain name for your site is already taken? Some companies have turned to the so-called “domain name aftermarket” to buy domain names that are already registered.

We’ve analyzed a large selection of recent purchases that took place at domain name marketplace Sedo. We discovered some interesting data on why people and companies pay top dollar to buy existing domain names rather than registering new ones.

Here are the four main motivators we found and a few examples:

1. Looking for a great name to launch a new company or brand

Whether it’s a brand new company or just a new product line, finding good domain names can be tough. Many companies turn to the aftermarket to buy domains that were registered many years ago.

  • German publisher Axel-Springer-Strasse wanted to start a food-related site. FoodBarn.com was already registered, so the company paid  €17,500 to buy the domain.
  • A new technology development group wanted trustworthy brand. They picked Trustwork and paid $30,000 for Trustwork.com in the aftermarket.
  • Great domains aren’t always short. The domain SayYestoTheDress.com is perfect for a wedding products site. And the buyer sure liked it; they paid $10,000 for the domain!

2. Owning the same domain with a different extension

There are lots of domain name extensions (called Top Level Domains) available. Often companies that start a business on a “country code” extension end up buying the matching .com that was already registered when they started their business.

  • Italian web services company Noovle uses the Italian country code domain Noovle.it, but purchased Noovle.com for $16,000.
  • A German telecom company called Starface uses the German country code domain Starface.de. It paid €10,000 to get Starface.com.
  • Not all domain names sell for a premium price. Online research company Owlit bought Owlit.com for €3,000 to go along with its Owlit.de domain.

3. Shortening the domain name

Long domain names can be a burden, so once they get established, many new companies will buy an aftermarket version of the domain that’s shorter and more in line with their branding. They will either use the shorter domain as their main website or forward it to their existing one.

  • Consulting firm West Monroe Partners has a long domain name (and long email addresses for its 1,000 employees). Instead of WestMonroePartners.com, it can now use WMP.com after paying $275,000 for the name.
  • Logistics software company Ehrhardt + Partner GmbH & Co. paid $50,000 for EPG.com. That’s an elegant improvement over ehrhardt-partner.com.

4. Seeking a descriptive name for marketing or a brand

Domain names that describe a company’s specific product or service are prized by marketers.

  • What would you expect to find at HighlandParkHomes.com? Probably homes in Highland Park, a wealthy part of Dallas. That’s why Breunig Realty Group paid $7,000 for the domain name.
  • HR trade organization Human Resources Professionals Association (HRPA) bought the descriptive domain name HRConference.com for $3,000.

As you can see, these companies believed there was great value in the domain names they bought and were ready to pay handsomely to get them. While the outlay of cash was quite high, these companies fully expect the new domain names will lead to additional profits, making the purchases beneficial to the companies in the long run.

How high a price would you pay to secure your perfect brand or business name online? It’s something to keep in mind the next time you are thinking about a new domain name.

And when you’re ready for your next domain, Namecheap’s ready for you. Register your domain today!

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