An Easy Way To Tell If You Own A “Premium” Domain Name

The term “Premium” is thrown around way, way, way, way, way too often. I’ll be honest, I used to think all of my domains were premium too. Then I learned the crushing, but important truth (unless you are one of about 50 people in the world that this doesn’t apply to):

The vast majority of domain names in your portfolio are not “premium” domain names.

That’s right, it time to stop telling everyone that you have a portfolio of premium domain names. Be honest. What you most-likely have is a portfolio of domain names, some reasonably good, others notably bad, and a handful (or just one or two) premium domain names, the golden eggs in your portfolio.

golden-egg

I hear people say they have a premium domain name all the time. When someone tells me they have a premium domain I just ask them one question,

“how many offers do you get on the name each month?”

The answer I get is often, zero. Sorry, but a premium domain has one very distinct quality – people are constantly emailing you asking you if the domain name is for sale, or in many cases giving cash offers right off the bat.

I know many people with domain names that get 30-40 offers/month on a domain name, sure many are tire-kickers but every month they get a solid offer or two. Now look at that domain name that you have labeled as “premium” – how many offers did it get last month? If your answer is zero, or one, then there’s a very good chance the domain name you’re talking about is not a premium domain.

It’s a simple test but an easy question to answer and a great way to truly sort your portfolio and determine which of your domain names are premium. Of course this doesn’t mean that you don’t have domains that could sell for $25,000 or more also in your portfolio, but premium domains are like getting a hole in one in golf, they’re magic, rare, but with the right buyer they can command an incredible price.

Give.com is a great example of a premium domain name. It sold for $500,000 less than two months ago. Not all four-letter .COMs sell for $500,000 – but premium ones can. A domain like WolfSpeed.com is an interesting brandable two-word .COM, but you can instantly tell it’s not a premium domain. Still, if you hold out and wait for the right buyer it can still sell for quite a bit, in this case WolfSpeed.com actually sold for $70,212 just over two weeks ago.

wolf-speed

Don’t tell me. You’re surprised. $70k sounds like a lot for WolfSpeed.com, you might think I’m being unfair, right – that was a stellar sale. It is a great sale, but the reason you’re surprised is because it’s a non-premium domain. I can tell you it’s very unlikely this domain got a lot of offers every month, probably close to zero in most months, but when the right buyer comes along it can fetch a nice resale price. Still, you were surprised.

Now think of what it was like when you read that Give.com sold for $500,000 – a very nice sale without a doubt, but I’m thinking you weren’t as surprised. That’s because you can instantly identify it as a premium domain and yes, it is incredibly likely that it gets at least one inquiry a day, it’s Give.com.

So next time someone tells you they have a premium domain name (or you think you have one) – put it to the test. How many offers does it get each month? If your answer is zero or one, don’t be too sad, remember names like WolfSpeed.com can sell for $70k, just know that the non-premiums will probably never sell for $500,000.

People are constantly emailing premium domain owners trying to buy the domain, it’s consistent, and keeps going like the Energizer Bunny. Non premium domains can sell for big bucks but they usually don’t get many offers and they can sit on popular domain marketplaces likes Sedo and Afternic for years without getting a single offer.

Remember, non-premium domains are great, you can still resell them for an incredibly high ROI and they will most-likely be the bulk of your portfolio. The premium domains are your wild cards, the names that could sell for 10x or more what you’ve ever sold a domain for. Don’t be embarrassed that you don’t have a portfolio full of them, just be honest with yourself and admit that not all of your domains are premium, in fact most aren’t.

{ 12 comments… add one }

  • Michael Castello September 3, 2015, 11:56 pm

    Very true but I think you’d be surprised that I only received a couple offers for Whisky.com over the 20 years I owned it but it sold for $3.1mm. It happens with a lot of my premium names and I have many. The reasoning is simple. Whisky.com was a deep site, received lots of traffic and looked like a million dollar “business”. It had the expectation of what it sold for. Most people are not going to inquire about buying a business on top of a great premium because its valuation is much higher and many domainers/end users don’t have that kind of money. The big offers, while not often, are most likely not going to come from domainers but many smaller offers do.

    The promotion of Whisky.com for sale to the global community is what summoned other businesses to make offers . A name like Nashville.com is similar. I don’t get offers but when I offered it to a billion dollar company, they of course were interested in acquiring it. If Nashville.com was sitting on a parked page or minisite, I believe I would be getting offers every week but for far less money. Its the illusion that a potential buyer may be able to buy a premium name and flip it for 2x return that gets people emailing. The buyers of Whisky.com had a 10 year plan for it and will be worth a least 10x what they bought it for. An owner of a true premium domain name will never lose money IMO. There are not many and a safe harbor for true investors and portfolio owners.

    What I said in 2007 is still rings true today: http://www.dnjournal.com/cover/2006/december.htm
    “The domain name market is still a gold mine. Get a second mortgage, sell the family jewelry. If you can find a premium name that relates to your business for less than $100,000, buy it.”

    • Morgan September 5, 2015, 6:52 pm

      @Michael – great insights, thanks for sharing!

  • Joe September 4, 2015, 12:11 am

    Well your post.

    You are quite right to consider that many premium domain names we have in portfolio.

    I remember the old keyword tool Adwords keywords to find the floor with large search Global and Local US users then this make me think to be interesting to buy and which eventually be aName domain. Com premium

    For reasons that were this not the case, these even I have I must sell cheap or get more traffic and visits for investors and buyers to account must be something in what you do not see now because not be in place by circumstances that you already know.

    Because now the domain name registrars new extensions and tell him you want to buy a premium domain name and this is not done with generic domain names, blind buy or purchase because the result of Google ads to give up, bottom and right side of the page, then this mean that many users seek. do you in your principles and what you taught me to believe that these were premium?

  • Howie September 4, 2015, 12:50 am

    Great article.

    The over used term ‘premium domain name’ was on my subject list for my imminent site. Years ago it was more defined to it’s rightful genre, now it seems the actual premium domain has to categorised as ‘ultra premium’ due to this over mis-usage.

    You’re right, a name as WolfSpeed.com is not premium.

    When mentioning premium domain names (none mine), I’m having to introduce ‘true’ premium because of this mis-usage which shouldn’t be the case.

  • Jon September 4, 2015, 1:51 am

    Ok, I’m pretty new to domaining, unfortunately I don’t have hundreds of thousands of dollars, so how can I acquire a premium domain, is there a way of purchasing a premium domain at reg fee if it expires (if the domain owner dies etc)

  • Alan Dodd September 4, 2015, 3:57 am

    I’m not so sure.

    Is WolfSpeed premium to the buyer? Most definitely.

  • Krishna September 4, 2015, 4:46 am

    Good post Morgan…
    Good comparison between Give.com and wolfspeed.com.

    But, it is sad to see some people are selling even good names at such low prices on Sedo etc.

  • Howie September 4, 2015, 4:57 am

    @Alan

    Fair point. But as a definition in the industry it is not a premium. Just as we see ‘expert’ banded around a lot. Experts disagree with other experts, experts never get it right, experts can be biased; so when you have said ‘experts’ point of view, unless it’s backed by evidence based literature, I alway treat with caution and not take as ‘gospel’.

  • Tony September 4, 2015, 9:00 am

    Number of offers is not necessarily a good way to gauge whether a domain is “premium” or not. I have hand reg domains that get offers all the time and have domains that make $30/day from parking that get no offers. And my premium domains rarely ever get offers.

  • Ian Ingram September 4, 2015, 11:42 am

    Excellent article & comments.

    Another issue is that ‘premium’ can have many connotations. It’s common with bonds, options, insurance, etc.

    Anyone can list a ‘non-premium’ domain for sale at GoDaddy and ask the buyer to ‘pay a premium’ to acquire it. It’s listed as a ‘premium listing’ and highlighted as ‘premium’ when searched for. It’s likely premium to the person who buys it, regardless of how little over reg. fee they paid.

    Domains can also become ‘premium’ if a new phrase is coined, product developed, or a large company is created. They can also become ‘non-premium’ when tech becomes obsolete, companies go under, etc.

    The term ‘premium’ may be to all-encompassing. Most domains may be more accurately described on a scale of: most industry experts would consider this domain to be absolute worthless ‘garbage’ all the way to: most industry experts would consider this domain to be truly ‘superior’.

    Probably too complex though…

    We have a pretty uncommon first name .com that has gotten 1,100+ inquiries over the last year. I don’t consider it a true premium by any means but someone would need to pay a premium to acquire it.

    It’s the one man’s trash is another man’s treasure scenario. If you purchase a domain (to use) and pay a premium and you think it’s premium, does it matter? Maybe, maybe not.

    It’s akin to “The Big Bang Theory” when Leonard buys 4,000 containers from The Szechwan Palace which closed down years prior so he could switch the food from the new Chinese restaurant and not upset Sheldon. Practically white Sheldon says, “What’s real? What isn’t? How can I know?”

  • Mindy September 19, 2016, 9:28 am

    And then there’s cyber-squatting which is happening to me right now. My name is categorized as premium for no reason and a company has it for sale for $1300. I have to go and trademark my name now so I can expose them for holding onto someone’s name in bad faith, and force them to hand it over to me. I would have trademarked my name eventually anyway but it’s hard to justify the cost right now.

  • Igor January 31, 2017, 2:53 pm

    Good post.
    I understand that not many domains in the Internet are premium.
    Most domains are bad, many domains are good and a few – premium.