Domain Name Case Study


Would You Pay A Million Pounds For A Domain Name?

Would you pay £1,000,000 for a domain name? Before saying no, consider how much a million-pound domain name can make you. If it's more than a million, why wouldn't you buy it?

Domain names regularly change hands for thousands of pounds. Some sell for tens of thousands, even hundreds of thousands. And there are numerous examples of domain names selling for millions of pounds.

But would you pay a million pounds for a domain name?

Most people's knee-jerk reaction to that question is a less-than-polite version of "No way!".

That's because they see only the price tag and not the value of a domain name, and we all know the old saying about knowing the price of everything and the value of nothing.

Buying a premium domain name is an investment in the future of your business, and one that will pay dividends for many years to come. That's where the value of a domain name comes from.

And that million pound domain name might turn out to be the bargain of the century because it may end up paying for itself.

"No way!" you say. "Paying for itself?"

Well, think of it like this: If a domain name is priced at a million pounds, but will help you earn a million pounds, it is effectively free.

In fact, it's better than free because once it has earned you a million pounds, there's no reason why it won't earn you a second million. And of course you also have the domain name as an asset that you can sell on should you decide to do so.

Why a great domain name pays dividends


Suppose you want to open a Widget Shop in Anytown. You want a website to help promote your new business and register the domain name, WidgetShopAnytown.co.uk.

In terms of business strategy, that's not a bad move. Your domain name says what you do and where you do it. Anyone in Anytown will know you are local to them should they need to buy a widget.

But what if you have bigger ambitions? What if you want to sell widgets not only locally, but nationally? You could still do that using WidgetShopAnytown.co.uk, but to do so will handicap your efforts. People not in Anytown will look at your domain name and assume that you are a local, not national business.

A much better option would be to own WidgetShop.co.uk. Just by changing your domain name, you give the impression that you are a bigger player in the market place. That will inevitably lead to more business because potential customers will assume you are an online retailer of widgets that serves the UK.

And if you want to portray yourself as a leading national supplier of widgets, you could do a lot worse than own Widgets.co.uk.

Potential customers will assume that Widgets.co.uk is a bigger business than WidgetShop.co.uk, and that WidgetShop.co.uk is a bigger business than WidgetShopAnytown.co.uk. That's because we assume the biggest businesses own the best names. That immediately brings credibility and trustworthiness to your offering, key elements of online business success.

I discovered this for myself just over a decade ago. I paid just under £10,000 for a domain name not unlike Widgets.co.uk. Not quite a million, granted, but a sizeable chunk of change. At the time, I was heavily involved in affiliate marketing and saw an opportunity to build a website on the name Bras.co.uk because it immediately made me look like a market leader. Within a year, it had delivered sales of over £100,000 without me spending a penny on marketing, and the affiliate commission earned meant the name paid for itself in eight months.

Furniture.co.uk Domain Name Sells For £501,000


Graham Haynes is a businessman who would pay a million pounds for a domain name. He came close to spending that much on the premium domain name, Furniture.co.uk, when he bought it in 2016 for £501,000.

“To be honest, I would have paid up to one million!” Graham is quoted as saying in a Sedo case study (download the pdf here). “I wanted the name at any cost, but of course sought to get it at the lowest price possible.”

This wasn't the first big ticket domain name Graham had bought. In 2009, Graham paid £57,000 for the domain name BedroomFurniture.co.uk. That was a considerable investment to make, and you can be certain that if it hadn't reaped rich rewards he would not have splashed out almost ten times that sum for Furniture.co.uk

Graham described the purchase of Furniture.co.uk as a "no-brainer", but since he already owned a very successful furniture business, why the need to spend hundreds of thousands of pounds on another domain name? Because of the value that a name like Furniture.co.uk brings to the table.

Let's look at some of that value:

  • The instant credibility that comes from owning a premium domain name
    “For SMEs, it’s all about credibility and making the best first impression. Customers have little to go on before clicking through, and as a result we believe the domain name is the most important facet of the search results.”

  • The authority that a top domain name brings
    Graham competes with multi-million pound companies like Wayfair and Oak Furnitureland. Rather than take them on head on, he believes guerrilla-marketing tactics – like owning Furniture.co.uk – gives him a competitive edge.

  • A premium domain name is also an instant brand
    Some companies spend millions establishing their brand name in a market place. A name like Furniture.co.uk needs no introduction. It says exactly what it does on the tin.

  • The knowledge that UK customers prefer to use .co.uk websites
    When compared with dotcoms and other leading country level domain extensions like Germany's .de, .co.uk domain names are typically undervalued. This is despite studies consistently showing that British customers prefer to shop at a website ending .co.uk or .uk than any other extension. We are accustomed to shopping at amazon.co.uk, for example, not amazon.com.

  • Owning a top domain name freezes out the competition
    This was also a “defensive purchase”, preventing a competitor from ever buying and using the domain name


  • Brandwise can help you find the ideal domain name for your business


    Online sales have been growing year on year since the advent on the World Wide Web, and this growth has been turbo-charged by the covid pandemic. More and more of us are now buying more and more online. This has focused the minds of business owners on their online presence and how they can take every opportunity to strengthen their offering. That has led to an increased interest in domain names, not only from start-ups, but established businesses looking to up their game. Already owning a name like Furniture.co.uk now looks like a very shrewd move.

    You probably won't ever need to spend a million pounds on a domain name, or even £501,000. But prices are rising, and the days of being able to pick up a great domain name on the aftermarket for a few thousand pounds may well be numbered.

    We believe that one of the things that truly sets Brandwise apart from other digital marketing agencies is our understanding of domain names and their importance to business success.

    If you are interested in purchasing one of our domain names, or need help with brokering a domain name purchase elsewhere, just fill in the form on our Contact page.



    Last updated: 4th of March 2021


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