9 Reasons Why .com Domains Are So Expensive
If you try to buy a .com domain name you will probably see a price tag that seems way too expensive. But why .com domain names are so expensive? I have a list with the top 9 reasons:
1.)Being Around 30+ years
One of the first top-level domains was the .com. At the start, it was the only option for entities or individuals with commercial intent. As you understand it was the right fit for a broader audience. The original plan for .net was to be related to the internet – IT – Network companies. .Gov was for the government entities and .org for non-profit organizations.
The Internet was started in the USA so the .com gained traction in the biggest economy of the world.
2.)Appeals to Global Audience
In the last years, more and more businesses wanted to focus on a global audience. All these brands acquired a .com domain and probably because of the budgets they had, they invested in good ones.
If you notice carefully most of the big brands use .com for their main site. I did also my own test on a google sheet and downloaded the 1000 most successful sites by traffic. What I found out is that 72% use a .com domain!
Dropbox and Facebook even invested more money for a better .com domain. The first domain of dropbox was getdropbox.com and Facebook’s first domain was thefacebook.com.
3.)End Users Assume You Have The .com Version
.com is synonymous with the web so people will assume that you have the .com version of your brand or your industry’s keywords. If they remember only a part of your domain then chances are that they will add a .com in the end.
So, brands want to get that direct type-in traffic for their site too. They don’t want to lead their possible clients to a competitor. In the past direct type-in traffic was a huge contributor to a .com domain value. Nowadays it is not so important as it used to be but it is still a factor.
4.)People Trust .com More
Internet users are familiar with .com so they believe that websites with this domain extension are credible. If they see an alternative extension like insurance.xyzw (just an imaginary example) it will look spammy and not trusty to them.
5.)Fewer Keywords Available vs Other Extensions
Since .com was for many years the only viable option for businesses, good keyword domains started to vanish. That means the supply of good domain names is smaller compared to other domain name extensions. Based on the basic economic law of supply and demand, a lower supply leads to a bigger price.
You can even see from the history of domain name sales that the same keywords for a .com domain are more expensive than other domains. Here are some examples: mortgage.com 1,800,000$ (source: Namebio) , mortgage.net 149,000$ (source: Domain Name Wire) , cameras.com 1,500,000$ (source: Domain Name Wire) , cameras.me 1,050$ (source: Namebio), creditcards.com 2,750,000$ (source: Namebio), creditcards.net 120,000$ (source: Domain Name Wire) .
6.)Domain Name Investors
A big part of the persons that buy domain names, they don’t intend to use them for building websites. We call them domain name investors and they usually buy a lot of domain names in bulk. Their goal is to resell that domain with a profit.
They might keep those domain names for years until they receive a good offer. This fact contributes with 2 ways on .com domain name prices: 1.) The total supply of .com domains is reduced as we discussed in the previous paragraph. 2.) A significant markup is added on domain name price so the investors can get a profit. There are no limitations on the domain price that investors can set.
The usual price of a .com should be $8 – $14 dollars but you see much higher prices when you try to register a .com domain. That happens partially because some other person owns already the domain and he sets the price.
7.)The explosion of internet growth
More and more people use the internet every day and even more, businesses want to have an online presence. Some countries like China, India and other Asian countries have high economic growth. They have improved also a lot their technology infrastructure.
Back in 1995, only 16 million people (0.4% of the world population) used the internet. Fast forward in 2019 there are 4.5 billion internet users (58.8% of the world population)! Source: internetworldstats.com
8.)No Limitations For a Registration
In contrast to other domain name extensions, pretty much everyone can register a .com domain now. For country-code top-level domains such as .uk, .in .ca .fr .de and similar ones you need to have a valid address in that country to register the domains.
For other types of domain extensions, you need to represent a specific type of entity. For example, .biz can be used only for commercial or business purposes.
9.)The USA didn’t Have a Popular Specific Country Code Domain
As I said earlier .com gained a lot of traction in the biggest economy of the planet. American individuals and companies couldn’t register .us in the beginning so .com was in some way the country’s specific domain extension.
Until 2002 the format of .us domains was like that: organization-name.locality.state.us. Local government agencies used this type of format for their domains. In 2002 the usual format of domain names was allowed for .us too (ex. insurance.us). By that time it was already too late for .us to reach the popularity of .com.
US entities didn’t have the dilemma to choose something else. For example, a UK company has to decide if they will use .co.uk, .uk or .com. If you target only local/country audiences, a specific country-code domain provides an advantage.
Biggest .com Domain Name Sales
I finish my post with some of the biggest sales of .com domains in history. Please share the post on social media if you found it helpful.