Why People Pay huge amounts of Money for Aftermarket Domains

You can readily acquire a domain name for under $15, but what if the ideal domain for your new website is already taken? To overcome this, many businesses explore the “domain name aftermarket” to purchase pre-owned domains. 
Andrew Allemann examined domain acquisitions on the Sedo marketplace in 2017, revealing intriguing insights into why individuals and companies opt to invest significant sums in existing domain names instead of registering fresh ones. Below are the primary incentives he identified, accompanied by illustrative examples.

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

Whether it’s the inception of a fresh company or the introduction of a new product line, securing desirable domain names can pose a challenge. Consequently, numerous companies resort to the aftermarket to acquire domains that have been registered for many years.

When German publisher Axel-Springer-Strasse sought to launch a food-related website, they found that FoodBarn.com was already taken, prompting them to invest €17,500 to buy the domain. 
Similarly, a newly established technology development group aimed for a reputable brand, leading them to select Trustwork and invest $30,000 in acquiring Trustwork.com from the aftermarket. 
Notably, premium domains don’t always have to be succinct; for instance, SayYestoTheDress.com proved to be an ideal fit for a wedding products site, with the purchaser willingly parting with $10,000 for the domain.

2. Owning the same domain with a different extension

There is a plethora of domain name extensions, also known as Top Level Domains, available. Frequently, businesses that commence operations using a “country code” extension end up acquiring the corresponding .com domain, which was already registered at the outset of their venture.

The Italian web services company Noovle initially operated on the Italian country code domain Noovle.it but later acquired Noovle.com for $16,000. 
The German telecom company Starface utilized the German country code domain Starface.de before purchasing Starface.com for €10,000. 

However, not all domain names command a premium price; for example, the online research company Owlit secured Owlit.com for just €3,000 to complement its Owlit.de domain.

3. Shortening the domain name

Long domain names can become cumbersome, prompting many new companies to opt for shorter aftermarket versions that align better with their branding. These shorter domains may then serve as the primary website or be forwarded to the existing one.

For instance, consulting firm West Monroe Partners, burdened with a lengthy domain name and correspondingly long email addresses for its 1,000 employees, opted to purchase the shorter domain WMP.com for $275,000, streamlining its online presence. 
Similarly, logistics software company Ehrhardt + Partner GmbH & Co. upgraded from ehrhardt-partner.com to the succinct EPG.com after paying $50,000 for the domain, achieving a more elegant online identity.

4. Seeking a descriptive name for marketing or a brand

Marketers highly value domain names that succinctly describe a company’s specific product or service.

HighlandParkHomes.com likely hosts listings for homes in Highland Park, an affluent area in Dallas, explaining why Breunig Realty Group was willing to pay $7,000 for the domain. 
HR trade organization Human Resources Professionals Association (HRPA) acquired the descriptive domain HRConference.com for $3,000.

These examples illustrate how these companies perceived significant value in the domain names they purchased, demonstrating their willingness to invest substantially in obtaining them. Despite the considerable financial investment, these companies anticipate that the new domain names will generate additional profits over time, ultimately proving to be advantageous in the long run. Consideration of the price one would pay to secure the ideal brand or business name online is crucial when selecting a domain name for future reference.

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