How Much Should I Spend on a Domain?

At least 1%, but up 80% of your budget

This might sound absurd, how could some one ever justify spending 80% of their budget on a domain! This fool doesn’t know what he’s talking about.

To get a idea of why, read part 1 of this post, Are premium domains even worth it?

There are a few examples already out in the wild that show how users affect domains. Thanks or appalled by the fact that everything on the internet is tracked you can get a gist of if a domain has traffic or value.

Sites such as similarweb.com and alexa.com exist, these sites show you the ranking of websites, by traffic, around the internet. They gather their traffic either by toolbars, or ISP’s. Sometimes they get website owners to give up their data to them too, so they redefine their algorithm, to make it more or less accurate.

But we don’t need it to be precises. We need to have a nice range if it’s right. That range generally consists of “Does this domain even show up on their radar?”

The main reason for that, is type in traffic is mega valuable, as long as it’s not bots and hopefully some what niche related. It’s a pretty decent assumption to make the case that some one going to sex.com or porno.com was probably searching for something related to either of those two items.

The adult niche is like a commodity. There are only so many ways you can show people having sex, although that doesn’t stop the lack of trying, just like there are only so many ways they can refine sugar, at which point it becomes either just impulsive, or brand association. But given that it’s a commodity it has insane amounts of traffic.

So much so that some of the top porn sites, depending who you ask, are among the top 10 most trafficked websites in the world. But are any with premium domains up there? They do manage to squeeze into the top 500, but it doesn’t seem like any are top 10.

But I digress, there are other niches with premium domains, such as gaming, that some premium domains do dominate, although I guess having one of the 300–500 largest websites in the world must suck, because what are you ever going to do with 50–100 million visitors a month. How will you ever live or pay the bills! You will be a pauper for sure! Or as VC’s would say “It doesn’t scale”

The problem with that analysis though, is that some, or most of these sites have been developed for years. Well except one, porno.com, that one was bought relatively late, and is only a “One page porno page lander” leading to the other major porn sites, since a big porn company picked up the domain.

But even given those circumstances, it’s still showing that it has about 2 million people a month that type it directly into their navigation bar, despite Googles best effort to abstruse the domain, or peoples knowledge that websites don’t exist, and only use apps.

But you might say, “Well of course that domain is valuable” so valuable in fact, that they haven’t even decided to develop it, just have it be a referral to their “brands”

So how much of your budget would you spend to get that domain? That’s a clear example of 80%, it may even break the rule and say 99%, as long as you can develop enough to get it cash flow positive with the last 1%. Although that one is some what of a tricky situation given that it’s not that common, although not unheard of, that you tell your friends what porn site you use.

But notice I keep saying “porn” and not “porno” there is a reason for that, this is in English, and porno is more Latin. I might venture to say that porn.com is more valuable than porno.com, given that it’s in English, and the majority of people who purchase with cards online, speak English, at least for now.

Given that in most developing countries I have lived in, or traveled too, I ask interesting questions and observe internet related things, it’s become apparent that most people don’t understand that apps and websites are different things, thanks mainly to the prominence of the Google app store and the apple store. Mostly most want a app, because they have been conditioned to believe that apps are some how better than websites, and in some cases, such as games, they are sometimes. Yet people still find a way to make it to websites and not apps, even some to get the app from the website.

So when do you only spend 1% of your budget on a name? Well that’s simple, when it’s available to register for cheap. Although rare, it does happen that there are some high quality domains available that some how the world of bots and human internet ground-fish seem to miss.

Alright, but lets also take into consideration that your budget may be small, but you dream big! That’s alright, Rome wasn’t built in a day, it was in two.

So what do you do? Well you can always upgrade later, if it’s still available, to a better name.

There is a slightly fascinating example of this, the owner of nuts.com. At the time they aquired nuts.com they already had the most amount of traffic you could in theory get from the internet. They already ranked number 1 with their existing website, something like “premiumnuts.com” or something relatively not horrific, actually probably the best domain you could of gotten at the time.

They had built up a brand around this, and had generated enough cash to where it either plateaued or they didn’t know what else to do with their money. I think the first, but might of been the later.

Nuts, like porn, can only be sliced and cooked so many ways. So the owner decided to go all in and buy nuts.com for what the time people thought was a absurd amount of money. Then rebrand everything to nuts.com, and wait and see if it hit.

It went horrific. The first three months given that they changed websites, their traffic tanked, they lost all their rankings in the search engines, and the few who where brand loyal stuck around, but the rest, well they went to the other websites ranking #1 for nuts in the search engine, because who the heck remembers where you buy your nuts.

But then, things started to change, the “newness” of the migration had went away, they fixed their bugs, and then suddenly traffic started to climb, more people started to buy. It became easier to tell people where they bought their nuts from, or at least easier to find and remember if they enjoyed the nuts.

Now obviously you could argue that this is a outlier, but there are just too many well executed exact match one, maybe two word, domains that aren’t the top, or at least top 2, of a niche that where executed well.

Given that the Internets barrier for entry is free, you have to admit that the level of execution is still respectable.

But how did they know to spend millions on porno.com or hundreds of thousands on nuts.com. Some people will tell you to look at Google’s CPC and then the search volume to find out the potential of a domain. That’s tomfoolery if you ask me.

Given that even if you rank number 1 for a exact word, doesn’t mean you get 100% of the traffic. First off, search engines must make their money, so they have a very large incentive to place ads above and foremost first.

Then there is the fact that the domain it’s self, is generally very small in the search results. Although not unnoticeable, still not the thing you mostly notice first. Also people tend to just trust the ranking of the search results, so if Google or Bing or what ever search engine, decides you and your cool domain name don’t deserve to be in the top 5, or maybe even top 10, well you can say goodbye to that budget you just spent on the domain.

Unless, it has type in traffic.

The hardest part, at least in the internet, in my opinion, is going from 0 to 1.

How am I ever going to get some one to go to “JohnathansAwesomeEntreprenuer.blog” without finding me on a search engine? Well, some long names, actually do rock, because they are catchy or associated with something else that people remember, maybe even a fear.

Others are some cool domain hacks, that probably happened by accident and turned out to be kinda cool, such as who.is. But in general, the only way people will find out about you otherwise, is by “word of mouth” or advertising. And the only way they are going to remember is if it’s a sticky name.

I prefer the word of mouth, but can’t deny the affects that advertising have. Although I feel I trust some one I know suggesting something more than a advert I see on television or online. I generally will go to the advert but will have a hard time remembering what it was specifically, and if its a commodity, will probably go back and just buy it some where that is suggested to me by Amazon or Google.

So why is type in traffic so valuable? Because it puts past the zero, and well into the one.

If a domain has 1 visitors a day, consistently, that means you have about 30 people a day. Now most humans can’t grasp exponential functions, it’s why most people don’t save, and why Einstein said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

The same thing applies to visitors. If a user on your site, some how found you by shear “I wonder if nuts.com sells nuts” vs “let me go to Google.com to then search for nuts” there is a slightly larger chance that visitor will interact with your website.

There is also the other fact that if your website isn’t a horrific piece of crap, not that has stopped people from buying and telling others about it, they might actually talk about it when they get what ever item or information they got from it, causing a sort of word of mouth and perhaps increasing that one visitor a day to two.

But this requires patience and discipline. In the world of the internet, when you get notifications every second, it’s apparent these things lack. So if a domain has type in visitors, if the niche has room for another competitor to take a large percent of the market, and you can pick up the premium domain for it, then spend the money, but don’t go absurd, you still have to make the damn thing good enough for people to share it with each other.

If not, well tell people about this story, tell them to go to medium.com, then to search for nadermx, then to curse the fact that it’s already two steps beyond what most humans want to put in.

And lastly share the damn piece, so everyone can remember that they went to Faceboook, or medium, Twitter, or Google, to find this article, loose interest in the attempt to find it. At which point they then make the association that they found me via Facebook, Google, Amazon, or Twitter and forget completely about me because they get distracted by all the other crap these platforms are trying to push on you, causing your focus on my work to be even further diminished, diluted, and probably at some point forgotten they even wanted to read it or read more of my work, at which point I’m only left to harpoon the internet for visitors.