Over the years we have tried and tested all manner of domain name styles and have come to the conclusion, (and that conclusion is backed up by hard data), that having a strong category defining domain name for your eCommerce operation is one of the most important investments you can ever make.
So what is a category defining domain name? Well if you sell widgets, then the category defining domain name is: widgets.com. If you sell blinds the category defining domain name is Blinds.com etc. If you are a country specific retailer – e.g. UK – then the next best thing to the .com is the category defining domain name in your country code top level domain space e.g. for the UK this is .co.uk so to use the previous example your category defining names would be Widgets.co.uk or Blinds.co.uk.
We hear you – “most of those names are gone or are too expensive”. BUT – hear us out – you maybe, just maybe, be able to acquire YOUR category defining domain name and have it pay for itself in a VERY short period of time.
Let’s put a few things to rest before we dig into the facts.
Having a strong category defining domain name (or exact match domain name) for your eCommerce niche has nothing to do with:
- SEO benefits.
- Pay Per Click Benefits.
- Click through rate benefits.
- Type In Traffic
Those are bi-products of a category defining domain name, NOT the sole reason to invest in one in the first place.
So if a GREAT domain name is not about SEO, PPC, Type In Traffic or CTR benefits what is it about?
Conversion rate optimisation is the most under leveraged facet of online marketing in our opinion. Investing in a truly great domain name for your eCommerce website is the quickest and easiest way to improve conversion rates for your online presence.
We have many examples of how domain names have benefited conversion rates for eCommerce retailers. Some we have had direct involvement in, others we have just been party to the results.
Here is an example we were directly involved with. Actually we owned part of the company.
- We had the opportunity to buy the defining category domain in the industry we were in. The domain was VERY expensive.
- We needed data to justify the purchase. Like most people we were fixated on traffic and search engine benefits and not really on other benefits.
- We took benchmark data from our current site at the time which had the main category keyword in the domain but had a letter prefixing it (think iWidgets.com as opposed to Widgets.com) – we benchmarked traffic (all sources), conversion data, time of year, time of month, time of day conversion data.
- We then arranged a lease on the exact match / category killer domain and moved our site to that domain to test the benefits.
- Site design remained constant, so did product range, categories, layout, – basically everything but the domain remained constant.
- We 301 redirected old pages to the new equivalent pages. (A 301 redirect is a small code placed on the old web page / website to let the search engines know that the page has moved permanently to the new location).
- Traffic went down – for a period of 34 days – probably due to the domain switch and the implications this has for search engine results for a short while.
- Conversion rates increased from day 1 from 1.76% average to 3.84% average on the new domain.
- Average order value increased from £42 to £68
- Average time on site increased from 2 minutes to approx. 4 minutes.
- You can only imagine what happened to revenue and profitability (it more than doubled) – with NO incremental traffic acquisition costs.
Now clearly the domain was a huge investment, but well worth it. In fact it paid for itself within a matter of months.
So within a few months – (from memory I think it was nine months) the INCREMENTAL revenue and profits the domain name gave us just purely because of conversion rate increases, paid for the domain name. Then we had those incremental increases for ever and a day for FREE.
So why does a category defining domain name help improve conversion?
Be honest with yourself if you were purchasing a new blind for your home which site (based on an initial gut reaction) would you prefer to buy a blind from – Blinds.com or MyBestBlindsDirerct.com – you see the category defining domain names gives you instant credibility, instant authority and instant trust. This is from a customer perspective NOT a search engine perspective. Usually this credibility is built up even before a customer visits the web site. Just by the fact you have the domain name, you have instant credibility for your category.
Now to the bi-products. SEO, PPC, Type In Traffic etc.
Having a category defining domain name, as we have hinted has extra benefits over and above conversion. We treat these as secondary benefits as relying on these bi-products for funding a large purchase is just bad business practice in our view. Treat them as secondary – nice to have benefits with a substantial upside.
Search Engine Optimisation – SEO. There is relatively strong evidence that search engines, including Google, favour highly relevant / exact match / category defining domain names. Websites that have these domains appear to have an easier time reaching the top of the organic (non-paid) search engine results pages (SERPs). Why is this? No one outside Google really knows, but we can surmise that websites with relevant domain names are usually or rather should be more relevant to the SERPS being returned for a given search query. Those websites have relevant content and the website brand is more targeted to the search query. Now there are a lot of other factors at play here and none of this should be taken as word, but, across studies we have conducted and have read elsewhere this certainly appears to be the case at this time. Who is to say if this will last and certainly even websites with great category defining domain names have been affected by the recent Panda updates by Google.
Again treat SEO benefits as a bi-product of a category defining domain name and you won’t go far wrong.
The benefits of a great domain name when utilising Pay per Click (PPC) advertising to drive traffic to a website though are considerable and proven. Why?
PPC works by a website owner bidding to place an advert on the search engine results pages, when a searcher/customer searches a keyword phrase that is highly relevant to their product or service. Advert placement is decided by the search engines automated algorithm, but the algorithms are usually based on the advertisers bid, the relevance of the advert vs. keyword being searched and the quality of the landing page the advert takes the searcher to when the advert is clicked. The algorithm appears to favour adverts that get clicked more frequently (i.e. they have a higher click through rate).
How does a great domain name help?
If you are bidding to show an advert when a searcher types the words ‘widgets’, you have the domain name widgets.com, your advert text is crafted to be highly relevant to the phrase widgets – again your advert will be highly relevant the domain name will be prominent to the searcher, it sub-consciously has greater ‘authority’ in their minds and will be more likely to attract a click. Therefore the click through rate will be higher and assuming the website is of high quality, the search engines will reward your advert with a higher position and you will pay a lower cost per click. Whilst all of this is still true without a great domain name – having that great domain name will again add a great deal of benefits.
Type In Traffic is another significant bi-product of having a great domain name. Type in traffic is where a potential customer navigates to a website by typing the domain name relevant to the product or service they are searching for directly into the browser address bar, rather than navigating to that page via a search engine like Google. So a customer would type www.widgets.com into their web browser if they were on the lookout for widgets, rather than relying on the likes of Google to get them there.
I think type in traffic is somewhat underestimated by many people. Frank Schilling has some interesting facts and figures about type in traffic on his NAmedia.com website. On his website Frank suggests 67% of users land on a website via direct navigation compared to 33% via a search engine. While we have not seen that type of percentage on any of the category defining domain name websites we have been involved with, we do not have the amount of data and volume of domain names that Frank has – he is one of the largest premium domain investors in the world.
Certainly direct navigation traffic will also increase as your brand / premium domain name increases in prominence. Your domain is your instant brand.
So in summary a great domain has so many benefits it is almost a no-brainer. But still VERY FEW eCommerce retailers take the time and effort to research, and purchase great domains for their business. Many retailers have offline stores costing tens of thousands of pounds / dollars per year, but will not invest ONCE in a great domain that will last forever. With many retailers seeing significant portions of their revenue coming from online, not investing in a great domain name is a little short sighted.
A domain name is a true asset to your business that will go on producing returns day, after day after day for no incremental traffic acquisition cost. Compare that to the rent you pay for your offline store.
There are a few caveats to this post.
- If you are just starting out and have limited budget do not spend a lot of money on a category defining domain name until you have proven your concept, business model and profitability. Use cash flow and profits you build up your eCommerce site on a sub-premium domain name to finance or help finance the acquisition costs of a truly great domain name.
- We have given examples based on OUR experience and the experience of those we have close business relationships with. You MUST test for yourself the results in your particular niche.
- None of this is set in stone. While we feel strongly enough about the conversion improvements great domains can bring, other benefits can and probably will change. SEO benefits for example.
- You MUST do your due-diligence when purchasing your domain names. As you would any other significant business asset purchase. Use lawyers where appropriate and always use an escrow type service.
- You may not be able to get hold of your particular category defining domain name – another smart business owner could have beaten you to it. But usually if the domain is held by a domain investor, a speculator, or is managed by a broker you can usually strike a deal.
So you are convinced – how do you go about obtaining or negotiating for your premium domain name?
Where to start your search.
So you know which domain you want. You now need to find out the current status of the domain to see if it is likely to be for sale. This is what we would do:
- Browse to the domain name using your web browser as you would any other website.
- What do you see?
- A Page full of adverts or list of links – if so this is usually a parked web page. The domain owner relies on type in traffic to the domain and visitors clicking the links on the page to earn revenue. If your target domain has a page like this there is a good chance it is held by a domainer (professional domain name investor).
- Error message or nothing. If you see an error message or nothing on the page it could mean the domain is not being utilised by the current owner.
- An active and operational website. This means someone already realises the value of the domain name and has started to build a business.
- Go to www.domaintools.com and enter your target domain name into the search box. The results returned will show you whois information i.e. who owns the domain and the public contact details for the domain. Sometimes the domain may use privacy services to protect the identity of the owner – there is nothing wrong with this, it will just require a bit more digging on your part to find the owner.
- Note down all relevant contact information, if available. Use information from the website if in existence or the whois information.
- If you cannot find the contact information, then start being creative. Do Google searches on the domain name itself. See what results appear sometimes you may be lucky and get news results or something similar about the domain and some previous sales history.
- Reach out to the domain owner. Start a dialogue initially. Be honest. Do not try to hide who you are or what your business is. Gauge the willingness of the owner to sell the domain. Don’t immediately go in talking money. It is important to develop the relationship.
- It is worth noting that many professional domain investors will know more or less the exact value of the asset they hold. It is also true to say that many domain holders over value the assets they hold. An even more likely statement is that most perspective domain purchasers undervalue the asset they are trying to buy at the time of purchase and over value it if and when they come to sell. Don’t fall into any of these traps. Do your due diligence. Work out potential upsides and work out what you are prepared to pay for the domain based on what VALUE THE ASSET WILL ADD TO YOUR BUSINESS.
- If you can’t find the owner of the domain or do not want to start a dialogue directly then engage the services of a broker – see resources section below. They will work on your behalf for a fee.
- We have always found that face to face meetings work out better in the long term. If you are looking to spend $100K on a domain name it is worth spending $2k on travel to do a face to face meeting. Those connections and that rapport you build will be invaluable.
Looking creatively at domain deals.
So you are reluctant to buy the domain name without testing the value for your business. Or the domain owner wants $20K more than you are willing to pay. Be creative. Think about what each side of the transaction wants. Maybe try to strike lease deal for a period of 3-6 months so you can test the value of the domain without the large capital investment. If you are happy you will pay the domain owner the extra $20K – you lease the domain for an agreed amount per month during the lease period with an option to buy at the agreed price if all works out OK. The domain owner is happy as they still own the asset and are receiving a monthly lease fee for the domain, you are happy because you are testing the value without the huge capital cost.
If the domain is just too expensive but you still see the value try negotiating a down payment and then a finance arrangement over a period of months. Or a down payment and give the domain owner equity in the overall business.
You could just offer to lease the domain. Whilst you will never own the asset you get the value of the asset for your business.
Be creative. Many domain investors that have relied on revenue from parked pages are suffering with dramatic downswings in their income at the moment. Many are open to doing deals.
Like any important business decision domains should be treated seriously and the relevant time, money, professional help and dedication put into the purchase and management of the asset. Take time to research the domain industry as a whole. Get to understand the key players and what motivates them. Understand their logic. Some of these investors are the brightest minds on the internet. What you can learn from the domain industry is staggering.
We hope this post highlights some of the benefits that domain names may bring to your eCommerce operation. We have literally just scratched the surface, and tried to provide an overview. There are many more things to consider and act upon at the research, data gathering and purchase stages. If you have questions please feel free to ask. If we get a lot of questions on a specific topic around domains we will do a follow up post.
Some resources to help you navigate the domain industry.
This list is not exhaustive in any way, but the resources below are some of the websites that we know about that are domain related an provide good industry information.
Domain Portfolio Owners And Domain Sales Organisations.
- NAMedia.com – Frank Schillings domain investment company.
- DomainNameSales.com – Frank Schillings domain sales company.
- Reinvent – Kevin Ham’s Reinvent Technologies.
- SEDO – A popular domain name marketplace for buying and selling domain names.
- Media Options – Domain Broker.
- Memorable Domains – Edwin Haywards domain sales company – focuses on UK domain names.
Domain Industry Blogs.
- Seven Mile – Frank Schillings blog. Unfortunately very rarely updated these days, but reading every page of the historic posts WILL change your life.
- Ricks Blog – The blog of Rick Schwartz – Domain King. A legend in the industry. Straight shooter. Many wise words in the pages of this blog.
- DomainSherpa.com – Michael Cyger’s blog and domain community with some great interviews with domain legends.
- The Domains – Mike Berkens domain blog. Great blog by one of the domain industry greats. Mike owns a stunning portfolio of domains.
- Morgan Linton – Great general domain focused blog from Morgan Linton.
Domain News Sites.
- DN Journal – Ron Jacksons legendary domain news site.
- Domaining.com – Aggregator of news from various domain industry news sources and blogs.
Domain Industry Forums.
- DNForum – The legendary DN Forum by Adam Dicker
- Name Pros – The popular NamePros Domain Forum.
- Acorn Domains – UK focused domain forum.
Domain Industry Conferences Shows & Exhibitions.
- Targeted Traffic – Rick Schwartz & Howard Neu’s popular Targeted Traffic Conference.
- Domain Roundtable – Website is outdated but this has been a popular conference in recent times.
- DomainFest – Popular conference orgainsed by a division on Oversee.
- DN Cruise – The domain industry cruise / conference organised by Chef Patrick.
Tools To Help You Get Started.
- Domaintools – Domain Whois Lookup and numerous other tools, some free, some paid.
- Network-Tools.com – Great tool for whois and DNS lookup information.
Popular Domain Name Registrars.
- Moniker – Popular registrar started by Monte Cahn, but now part of the Oversee group of companies.
- GoDaddy – The largest domain regsitrar in the world.
- 123-REG – Popular UK based domain registrar.
We will add to the resource list over time. If we have missed any must have resources, please let us know.