The domain name is the foundation of any successful online business. Below are the most popular reasons why individuals and businesses buy premium domain names.

1. To Improve Your Marketing and Visibility

Premium Domains are often short, contain dictionary words and are memorable. This allows your customers to easily find you and recommend you to others. The right domain name can make your online business stick out from the crowd and mean the difference between success and failure.

2. To Build Credibility & Professionalism

When a user is looking through the search engine listings, emails or any online advertising (such as Pay-per-Click) a premium domain name can add credibility and professionalism to your business. For example, if you wanted to look for hotel review website which would you assume was the market leader; rate-my-hotels4you.com or hotels.com?

3. To Protect Your Brand

Some owners have secured premium domains in order to prevent their competition from doing the same. Domains are valuable real estate and it is a sound policy to prevent competitors within your business niche from taking advantage of this. A proactive approach in acquiring valuable domains related to your business can increase your control and offer future opportunities to expand.

There is no limit on the number of domains that can be redirected to your existing website(s).

4. For User Traffic

Often premium domains already receive user traffic. Most of this traffic comes from direct type-in or referral traffic. Direct type-in is when an internet user types the domain directly into her browser, such as typing ‘www.photography.com.’ Referral traffic typically comes from links on other websites directed to your domain.

Many domain owners buy premium domains in order to monetise this incoming traffic, through advert placement or by streaming users to other web properties they own. Your premium domains can become businesses in themselves if chosen carefully.

5. As an Investment

Similar to real estate, domain names have become investments. Anyone searching for a new domain in recent years will have realised that most of the good domains have already been bought. As premium domains are often based on popular phrases or dictionary words, there is a limited supply available. That supply is under pressure as internet use grows and more businesses come online. Increasing demand means that domain values are rising year on year.

In much the same way people buy houses for renovation, some premium domain owners also choose to develop their domains, by building web sites and links, to increase the value of the domain for resale at a later stage.