The True Cost of Your Domain Name

Domain name strategies for startups.

I had a conversation with a start-up this last week, and we’re talking about domain names and the different types and ways to brand.

He was reaching out on a domain name that we are brokering, and his first comment after he heard the price was that he may just create a made word for their brand because this would cost almost nothing.

Now this started an interesting discussion around domain names branding and the cost to control your brand online in the simplest possible fashion. What I mean by branding is, do they go out with a made-up word, do they go out with one word domain that’s an actual word, an acronym?! Or, do they use two words?

  • One word dictionary word
  • Made up word
  • Two words
  • Abbreviation

What branding options should they choose?

The domain names costs for these options are very different. Now, I am assuming that they can get the direct exact match domain name for each brand.

It is tempting to think that you can get away with only spending $10 for your brand, but… here’s the thing that a lot of these founders of these startups, and CMO’s don’t understand: You’re going to pay for it either way. What do I mean?

One way or the other, you’re going to pay for your brand.

If you decide to go with a made-up word for your brand it comes with a cost.

What they don’t see is that those companies that go this route put thousands and maybe millions of dollars into their branding, into their marketing, into communicating their message, and getting people to say, “Hey, this is a cool brand.” This thing we call brand equity.

Your brand is nothing more than a symbol or word that differentiates you from the world. A great brand provides leadership positioning for your message both on a global scale and an industry scale.  What I mean by global is that you become the leader for that keyword or brand across all industries. 

At the same time it needs to position  your company above your competition.  Most made up word brands fail in this element.  When your brand is ranked you easily end up on the lower end of the ladder because your brand means nothing.  This happens in seconds when someone is searching for a solution that your brand fills. 

Brand equity is the life and energy built into your brand.

What is brand equity?

Brand equity is this ability for your brand to create trust, loyalty, leadership positioning, which allows you to charge higher prices, and to get repeat customers.

Now, you can go into more definitions of brand equity, but for the sake of this conversation and this video, that’s what I’m saying brand equity is: Brand equity is one reason why sold for $1B to Amazon.We are going to come back to why brand equity is important in a second.

So… Yes, you can go the route of creating a brand based on made up word.Go for it, but don’t think you’re not going pay for it. And that’s the misconception.

You’re going put a lot of money into it, just to get people to see and understand what you call your brand.  Because when they line up your brand or your competition, guess what, your brand looks like it’s a made-up brand, a made-up word.

It doesn’t necessarily, communicate preeminence. It doesn’t stand out in your customers’ minds.  It looks like you spent $10 on a domain name for your brand.

One word domain names as a brand

The second route is that you can acquire a category one word domain that’s an English, that’s an actual word.

But you’re going pay for it. This is going to cost you money. 

What that word brings to you is this inherent equity already built into it.

The equity comes from the aspiration level, trends, meaning and essence of the definition for your keyword.

This why a will sell for $675,000 and for $1M.

They sold because they had equity built into them.

Domain Names Are Assets

This is what creates value, and why we say that domains have value and are assets.

They’re assets, because there’s inherent equity built into it.

How can you tell it’s equity?

You can tell a couple of different ways.

You can tell it by the search that’s in that keyword and the CPC.

For example, has this inherent equity built into it.

There’s are over 49,000 exact match searches done every month. There are companies that are willing to pay money, CPC, right, the cost per click, or PPC, whatever one you want to use. But they’re willing to pay for that.

And so, this brand equity is determined by this equation between search, the money companies are willing to pay per click, the good will, the trade wind and the momentum that’s built into that keyword you’re acquiring.

You’re acquiring that equity that then is able to propel your brand from day one of your launch.

A great domain name brings momentum.

It is kind of like your brand is a sailboat.

Now imagine getting ready to start a race and you have this massive trade wind that’s already pushing you. That is what a great domain name with meaning brings to your branding.

And so, you’re paying for that momentum for your brand.


The opposite is also true.  

If you just make up a word for your brand, you’re in that sailboat, but there’s no wind.

You’ve got to create the momentum and create the wind, and get going.

And that’s why you see a lot of companies, a lot of start-ups, a lot of serial entrepreneurs, they will pay the money to acquire a one word domain name.

The domain name you choose needs to limit your risks while maximizing opportunity.

Many startups understand this dilemma and so they launch with a different domain name variation.  This typically involves adding a word before or after their main brand.  

This is a way to get around paying for the cost of the domain name, if it is even available.

Guess what?

You’re going pay for that also, because what’s going happen is that, you’re will end up driving traffic to the dot com.  This is how the internet works.  A portion of every dollar you invest in marketing will have a halo effect to company with the (.com).

There is a bigger risk though.

Your ability to scale could be impacted if your domain name is available and then is acquired by another startup with strong funding. 

Now your customers start to see another brand with the same keyword being advertised.  If that startup is tech savy they could end up dominating the search for your brand.  This is what happened to Kraken Rum and the Kraken crypto exchange.  The could end up controlling the messaging making it almost impossible for your brand to break out.

It depends on industry, it depends on brand, it depends on who acquires that domain name. But what I do know is that it’s going to have an impact.


There are several ways a startup can brand. 

This includes choosing a dictionary word, a made-up word, combining words or using an abbreviation.

Your domain name strategy needs to create an effortless path for you customers to find and interact with your brand.

Each of these methods comes with a cost, risk and opportunity.

The surest way, the way with the less risk for your brand, is to acquire the dot com domain name.

We can debate price and cost all day long, but what we should not be debating is that you need to own your domain name online.

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