How much is a great domain name worth to a business? Part 2
There are two implications of this rule, one obvious and one not so
obvious.
First the obvious. Your maximum budget for a domain name should
depend largely on your expected online sales. If you are trying to run a
$100,000/year online business, $1,000 is about the maximum you
should spend on a domain name. If you are trying to run a
$1,000,000/year online business, $10,000 is about the maximum you
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How much is a great domain name worth to a business? Part one
A simple rule: 1% of sales
If a great domain name compared to a good domain name will increase
sales 2% and the margin is 50%, then a great domain name is worth
1% of sales.
For example, a domain name that will increase profits 1% in a $10,000
business is only worth $100 to that business.
If that same domain name will increase profits 1% in a $100,000
business, the name is worth $1,000 to that business.
Short Case Study – Domain Names of Web Hosting Firms part 2
Both Hostway and Timehost lack distinctiveness. Other companies may
use “host,” “way,” (GateWAY) and “time” in their names.
Fatcow.com – This is two unrelated words.
BlueGenesis.com – Another two unrelated words.
Because FatCow.com is only six characters long, FatCow.com is more
impressive than the eleven-character BlueGenesis.com. Both names are
slightly edgy. But both names face the risk that fat or blue may
become dated. Genesis could be confused with genie.
Short Case Study – Domain Names of Web Hosting Firms
Web hosting is a highly competitive field. It is possible to enter the
Web hosting business as a reseller with an investment of under $1,000.
Over 4,000 Web hosting firms are listed on Yahoo.
Web hosting is largely differentiated by the reliability quality of the
hosting – which is extremely important to business Web sites. If Web
sites are down or slow even 1% of the time, sales will be lost. People
also want a Web hosting firm that will be in business six months from
now. If a Web hosting firm goes bankrupt, it’s time consuming to find a
new host and resetup the site, not to mention any downtime.
Don’t Make Me Think About Using Your Web Page or Your Domain Name
The title of an informative book on Web usability by Steve Krug is
“Don’t Make Me Think.” “Don’t make me think” is also his first law of
usability:
It means that as far as is humanly possible, when I look at a
Web page it should be self-evident. Obvious. Self-explanatory.
I should be able to ‘get it’ – what it is and how to use it – without
expending any effort thinking about it.