Premium domains work

A few months ago, we expanded our premium (secondary market) domain offering. We encouraged you to help your customers find the perfect domain by including premium domains in your search results using the OpenSRS API. We recognized this would require some front-end work. We recognized many of you still thought of a domain name as a component of your hosting service, not a revenue stream. We also had our own doubts about whether people would pay a couple of thousand dollars for a domain name rather than choose an available, more affordable alternative. We had even greater doubts that they would just throw it into an online shopping cart and plunk down a credit card without any real human sales effort.

So we took our own advice and integrated premium domains in the Hover search results in early August.

The design approach was a bit different than anything else we had seen in the industry. Rather than break these domains out into some distinct section of results, we simply included them in one long list of available domains. That seems more consistent with the way we shop for products and services that will ultimately play the same role.

Check out the search results for sandwich.com. The star explains that this is a premium domain.

The results we've seen since adding premium domains to the list are shocking. We have sold 29 premium domains in 4 months at an average price of $1,530.

So to put that in the context of your own business, that is 1 premium domain sold for every 853 new available domains ("regular domains") registered. Said differently, we have collected $1.79 in gross premium domains revenue for every newly available domain registered. With your 10% commission, that would be an extra $0.18 in margin for every new domain name you register.

For us, that starts to look like real money.

Plus, our customers are thrilled with their new domain names. And, not surprisingly, almost all of them are renewing these domains far into the future and buying additional services on them. This makes sense. These are heavily invested customers. (I am not claiming causality there—the premium domains do not make them more serious about their businesses. But they certainly get them even more excited about their businesses and make other expenses seem less steep by comparison!)

Finally, this has been mostly passive stuff so far. We have not yet begun to really sell these domains. We are just starting to have fun with database marketing. Imagine looking at every organization name among your base to see if any exact matches are available as premium domains. Imagine just looking at every domain name that has a hyphen in it (a classic compromise) and finding the exact same domain name without the hyphen available as a premium domain. As always, we would love to pull these sort of lists for you so you can reach out to these customers with a great pitch. (By the way, you do not even need to implement the API to do this.) Please let us know if you are interested in these sorts of efforts.

So, in conclusion, once in a while, we are right. And when we are, I will always tell you about it.

Sell premium domains!