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How much is your domain worth? 
It might be more valuable than you think.


Here are three components of a brand name to start with:

  1. Brand name itself (Google)
  2. Logo
  3. Domain name (google.com)

According to Margot Bushnaq, founder of BrandBucket, there are eleven features that make up a good brand name (How to Choose a Business Name - An Introduction):

  1. Top Level Domain or TLD (refer Factors to Consider when Choosing a
    Domain Name for issues related with TLD)
  2. Length
  3. Real Word/Expression
  4. Alphabet
  5. Pronunciation
  6. Spelling
  7. Conflicts
  8. Industry Match
  9. Longevity
  10. Uniqueness
  11. General Retention

It is easier to assign score to TLD (.com commanding greater weightage than .net and .org) and Length of domain name (shorter domains commanding more value; according to BrandBucket, exponentially important as the name gets shorter) than Pronunciation and Retention, which according to BrandBucket, are most difficult of all features to rate. Trademark requires a country-specific approach.

BrandBucket states, "We offer a selection of quality, hand-picked, unique domain names available for sale as ready-to-use brands for your business startup, new product name or blog name... Our selection of brand names is hand-selected by a team of business and linguistic experts. Names are submitted by owners worldwide, and we accept fewer than 10% for our collection."

One needs the following skills/assets:

  a.) Knowledge of linguistics to come out with promising brand names
  b.) Logo designing
  c.) Capital to invest in domain names

You come out with a good brand name and register the same with a domain registrar (like GoDaddy), design a logo before putting the name for sale at online marketplace (like BrandBucket) or your own website.

As a case study, I come out with a brand name WebSplen and register with GoDaddy websplen.com for 12-month period at the rate of Rs 600.11 (Rs 589 + 11.11 ICANN fees) or $10 approximately (roughly take 1 USD equal to 60 Indian Rupee). Next, I design a logo which takes three days. As a logo designer, price that I set for my work can be subjective. One way to take into account labor for logo designing while segregating from profit as an entrepreneur could be adding to cost price that I would have charged from a client for similar logo for only logo designing. Read discussion How much do you charge for a logo. For this case study, a different treatment of treating my labor in logo designing as part of my entrepreneurial activities is applied.

Suppose, you visit brandbucket.com and like name dinoda which is available for sale at $1,995 at the time of writing. If you go to godaddy.com to register dinoda.com, you will get message that dinoda is not available. The only way you can have dinoda as your business brand name with a website address dinoda.com is by paying owner who has earlier registered this domain name. If you visit GoDaddy and not aware of the sale proposal displayed at BrandBucket, then GoDaddy helps you get the domain in two ways according to their website:

#Domain Buy Service: We contact the current owner on your behalf. If it's for sale, we'll do all we can to get it for you! Rs. 4,059.49 per domain (i.e., around $70) + commission.

#Domain Back Order: If a name you want is already registered, you can still own it! All backordered domains go to auction, so you have a chance to win it. Others may have also backordered this name, so act now to secure your place in the auction once it expires. Rs 1,216.89 each (i.e., around $20). For instance, I made a search for itrim.com and found that this domain name is available with a current bid of Rs 61,728 (or $1030 approximately) at the time of writing.

So by building a library of excellent domain names together with logos and offering to sell, there is an opportunity to do decent business. Prices at BrandBucket in general varies between $1500 to $2600, sometimes quoting $5000 and more. You may opt to start your own website like BrandBucket.com or use a combination of your own website plus popular marketplaces to display products on sale. 

Sample transaction of sale of domain+logo+brand name by logo designer through BrandBucket:

Expense Amount  Income  Amount
Domain name registration for one year*:  $10       Sale (sold @ $2000 less commission by BrandBucket @30%) $1400
Administrative cost (approximate figure for costs incurred like
internet and computer use, rent for home/office, interest for
investment in domain name):                            
$100    
Total Expense           $110   Total Income $1400
Profit (total income - total expense) $1290    
  $1400   $1400

In case you opt to sell the above domain name through your own website, you save 30% commission payable to BrandBucket, but needs to bear the cost of maintaining your own website/online marketplace. The bottomline is that by investing around $150, there is an opportunity to earn $1000 to $2400 and above, which is kind of a super normal profit.

There is a big stake associated with domain names which makes the whole game lucrative for stakeholders (domain name registrars like GoDaddy and those in the business of brand building like BrandBucket). Suppose someone had booked domain name amazon.in before US-based amazon.com (1995) became a success story and went global. As Amazon penetrated in India (2012), the one who was holding amazon.in could have made a windfall profit while transferring ownership of domain to Amazon.

In case you just want to get involved in domain investing without bothering about designing a logo, consider platforms like by GoDaddy. Buy domain names applying imagination and put them in the market place for sale.

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