Let’s face it. Domain names are getting expensive. If you’re lucky, and you’re trying to get a domain name that’s long, strange or not hotly contested, you can probably pick up the name for just a few bucks. But if you want something short, attractive and marketable, you could end up shelling out several thousand dollars — or even millions for the most lucrative opportunities.
Is this really worth the money? Or is it better to pick up a cheap domain name and invest the money in something else, like marketing or infrastructure?
It’s hard to overstate how influential a good domain name can be on the course of your business.
Those benefits all sound great. But how much are they worth paying for?
You have to draw the line somewhere. The most expensive domains ever sold include things like Business.com (for $345 million), LasVegas.com (for $90 million), and CarInsurance.com (for $49.7 million). Clearly, someone thought the benefits of these domains would eventually outweigh the upfront costs.
For the average business owner, the benefits aren’t sizable or immediate enough to justify such a transaction — especially considering the risk.
The central problem here is competition. Business owners, investors and digital marketing experts all have a solid understanding of what makes a domain valuable — and they’re all aggressively bidding on the most marketable and memorable domains, artificially driving the prices up and making the trade-off harder to calculate.
If you search for an ideal domain name and it’s available for a reasonable price, congratulations! You have nothing further to contemplate. Make the purchase, and enjoy your valuable new domain.
But if that domain isn’t available, if it’s overpriced, or if there’s just too much competition for it, you’ll need to come up with an alternative option.
So what’s the bottom line?
Domains are incredibly valuable. Getting the right domain for your business could instantly increase its chances of long-term success. But that shouldn’t automatically justify a high price tag, especially if you’re bidding on a domain for a highly competitive keyword. Consider the costs and benefits carefully before making any final decision.
Originally appeared in Entrepreneur