There are several reasons why we are seeing these extreme price increases in domains. Unlike other assets that might be in a bubble, some argue that these prices actually reflect the real value of what a premium domain brings to a business.
Founders of several internet success stories have come out to tell the world the positive role their big domain purchase had in their business. This includes the founder of Investing.com, CarCovers.com, TeamWork.com and many others.
The first 5 months of 2021 generated 11+ million for the top 10 names. Compare that to 5 million for the entire year of 2020.
Two word domains recently started closing very often at high 6 figures. For example, SelfMade.com sold for $977,000, LiveWire.com sold for $632,000 and GoBet.com for $850,000.
Startup founders went through a phase of wishful thinking, a very costly phase in their domain choice. They made the mistake lots of founders made and thought that they could get away with buying a name with some random extension. If only they listened to what happened to Overstock.com when they decided to rebrand to o.co a eye opening story that anyone that is not looking to destroy their idea should pay attention too and not think they will beat the odds.
This is what Patrick Byrne of Overstock had to say “O.co was my bad call” and that “about eight out of 13 people who were trying to visit us through O.co, eight were typing O.com”.
Becoming a success story is very difficult. Add a low quality domain to the mix and you just lowered your chances further.
With more brands everyday rushing to fix their mistake and buying the dot com version of their name, they are sending a message to others who prefer to learn from others mistakes. The message is, don’t buy crappy domain extensions and crappy domains.
Most people are late to the party and trends so you still have some founders gambling with these other extensions. Imagine how much money is lost in ad dollars alone because of these silly choices?
The good news is that some domain sellers did not update their pricing so really good deals are still to be found. Domain financing with no credit has also become a thing more domain holders are open to so that helps founders as well.
Our advice has been consistent. You either do it right or don’t do it. Every single day startups collapse that had good ideas but they didn’t go all out. In many cases another entrepreneur comes along and does it right and becomes a success.
The world is full of people that had a company that flopped because of their half hearted approach. All these people could say when they see someone succeed with their idea is “that was my idea, I even has a website etc.”. A sad story of so many lost dreams because these people refused to follow what works or even worse, they listened to complete losers with no experience.
The problem is that almost everyone writing about domains is a domain broker. Naturally the feeling is “well, you sell names, this is why you say what you say”.
We took the time to present you with some facts in this article. If our goal was just money, we would be selling those other extensions. They are easier to market and lower in cost. Some people have a passion in seeing someone take an idea and make it happen. Just like we enjoy seeing a beautiful building go up or a new beautiful shop open up.
We also cringe watching someone with a good idea mess things up. People invest their heart and soul in their idea, who wants to see all that go to waste, it’s so sad to watch.
You have a dream, don’t let anyone destroy it. People could care about you but still innocently give you bad advice. Stop that by always asking yourself what experience do they have on the matter and what do they know that Fortune 500 companies don’t.
2022 continues to be really strong with .com prices as companies realize they need to give it all to make their dreams a reality.