What is a Domain Name? How to Choose, Buy and Sell Domain Names?
9 min read
9 min read
Learn how domain names work, how you could own one, and how you can make money from them.
Table of Contents
A domain name is a necessity for anyone trying to launch or access a website. But while virtually everyone has used a domain name at some point in their lives, most have little to no understanding of how it works.
So today, take some time to know more about domain names. To be more specific, we’ll talk about what a domain name is, where you can get one, and how to use it for personal or business purposes.
What Is a Domain Name?
Simply put, domain names are a string of characters that people enter in a web browser to access a landing page — be it a website’s homepage, a blog, product page, or any other variation.
You can think of it like your home address. If you want guests to find your place, you’ll need to provide directions on where they should go. Domain names serve the same purpose online.
Domain Name History
Domain names were first used back in 1983 through the Domain Name System. But it wasn’t until 1986 that the public was able to register domains.
ARPANET (Advanced Research Projects Agency Network) was an experimental computer network that’s credited for the way we use domain names today. It was a project by the US Advanced Research Projects Agency.
What Is ICANN?
These days, the monitoring of domain names falls under the jurisdiction of ICANN.
ICANN is a non-profit group composed of individuals across the world who are dedicated to keeping the internet secure, stable, and interoperable. Its main role is to coordinate domain names globally.
Normally, a computer will need an IP address to find a website. IP addresses are composed of seemingly random numbers — which is not ideal for internet users as they are hard to remember.
But with ICANN managing the Domain Name System (DNS), people can enter a domain name instead of an IP address. This makes websites more accessible to the general public.
ICANN is also responsible for making sure that no two IP addresses are alike.
What Are TLD, SLD, ccTLD, and gTLD?
A domain name has two parts that are separated by a dot:
Second-Level Domain (SLD) — This is the section of the domain that comes just before the dot. It’s what people choose to name their websites.
Top-Level Domain (TLD) — This is the section that comes from the dot onward. The most common TLD is .com but there are many others including .net, .org, .gov, and .edu.
You will need both parts to access a web page.
There are two other types of TLDs that you can use to create or access a website:
Country Code TLD (ccTLD) — These are TLDs that are reserved for a specific country that is usually composed of two letters. It can be used to identify where a site is operating from. Examples include .us (United States), .ca (Canada), .in (India), .au (Australia), and .uk (United Kingdom).
Generic TLD (gTLD) — gTLDs used to refer to TLDs like .com and the others mentioned earlier. But these days, gTLDs are more commonly associated with TLDs that define what a website is all about. Examples include .biz, .club, .live, .agency, .shop, and .tech.
While there are a ton of options for TLDs, most site owners stick with .com as it is easier to remember and more affordable in most cases.
Some TLDs are also not accessible for the general public such as .gov and .edu since these are reserved for organizations that meet certain requirements.
How to Choose Domain Name
The good news is that you can use any domain name that you want. The only problem that you might encounter is availability.
If another person happens to own the domain name you want, you won’t be able to get it unless you buy it directly from the owner (more on that later).
There are restrictions you have to be mindful of. For instance, you can only use letters, numbers, and hyphens. You can’t use special characters at all. And regarding the use of hyphens, you can’t add it at the beginning or end of the domain name.
Domain names are also not case-sensitive. So you can’t capitalize a letter in the hopes of acquiring a domain that’s already taken. They should also be at least three characters long and not exceed 63-64 characters (depending on the TLD used).
How to Research Domain Name Availability
It’s not that hard to see if your desired domain name is still in the market or not. By going to a domain name registrar, you can check if a domain name is still available for purchase.
If the domain name is still available, you can add it to your cart and buy it right away. But if someone owns the domain, you’ll likely receive a list of suggestions instead. These suggestions might be variations of the SLD you entered or the same SLD but with a different TLD.
For example, if you want the domain “spicycakes.com” but it’s already taken, you might get recommendations like “spicy-cakes.com” or spicycakes.co”.
You should prepare several domain names when attempting to buy one. You’ll find that more common domain names, especially those that include great keywords, are already taken.
How to Find Expired or Dropped Domains
When you buy a domain, you don’t own it forever. A domain name will expire after some time — the length of which you’ll specify just before your purchase.
There are ways to prevent a domain name from expiring such as using an auto-pay feature. Most domain registrars have this feature enabled by default to prevent domain expiration.
Domain Name Best Practices
While it is true that you can use any domain name you want so long as you meet the requirements (like not using special characters), you’ll want to put some thought into it. This is especially true if branding and name recall are of importance to you.
Here are some tips on how to choose the right domain name.
Use a .com TLD — You’ll want to stick to a .com domain since it is the most established out of all TLDs.
Insert Keywords — Unless you’re using your brand name as the SLD, you might want to consider adding keywords to your domain name for SEO purposes.
Make It Memorable — To do this, you’ll want to keep it as short as possible. One way to test if a domain name is memorable is to say it to another person. If that person asks you to spell it out afterward, you should tweak it.
Keep It Unique — You don’t want to be confused with another domain. Do a quick search online to see if there are other sites with similar domain names.
Where to Buy Domain Name
Once you’re ready to buy a domain name, you can look up a domain registrar to get the process started.
What Is a Domain Registrar?
A domain registrar is a site where the public can buy a domain name. It acts as a service provider. Its duties include reserving and managing domain name registrations.
A domain registrar is not to be confused with a registry. The latter is an organization responsible for managing TLDs.
While registrars are typically the first stop for domain name buyers, you can also purchase them from resellers or directly off a domain name owner.
List of Registrars
Plenty of domain name registrars has emerged over the years. And not all services are the same. There are a lot of factors you should consider. So it’s important to do some research to find a registrar that meets your needs.
For example, there are website builders that offer free domain name registration. Some companies also offer lower prices than others.
What’s most important is that you choose to work with a trusted domain registrar.
Below is a list of some reputable domain registrars in no particular order.
Factors to Consider When Buying a Domain Name
These are just some of the factors you need to consider when buying a domain name from a registrar.
Price — Registrars will be quick to offer great deals for first-time buyers. But look closely at renewal fees because that’s where prices tend to jump.
TLDs — Most (if not all) registrars will offer .com TLDs. But some can only offer limited ccTLDs and gTLDs.
Transfers — If the time comes when you want to switch providers, your current registrar should have a feature that allows you to do so as smoothly as possible.
Customer Support — You’ll want to find a domain name registrar with great customer support. Check online reviews to see if the company has a quick response time.
How to Sell Domain Name
Earlier we mentioned that you can buy domain names from site owners themselves or through resellers. The reverse is just as true in that you can buy domain names and sell them for profit.
In fact, it’s not uncommon to find people who buy domains and park them in hopes that they go up in value.
If that’s something that you might be interested in, here’s what you need to know before you start selling domain names.
How to Make Money With Domains
There are two approaches to making money with domain names. The first one involves buying domains and holding on to them as we described earlier.
The main problem with this approach is that it is a gamble. There’s no guarantee that the domains you buy will get bought down the line. And even if they do get sold, it could take months or years.
But if you’re willing to roll the dice and have a knack for predicting future trends, then you could make some money selling domains this way.
The other approach is by buying a domain, populating it with content, and making the domain rank on search engines. The idea is that sites with high traffic are attractive for investors and business owners.
By buying domains that already have traffic, they won’t have to start from scratch. All they have to do is convert the site into something that fits their message and branding.
The downside to this approach is that it will take a lot of work which isn’t that ideal if you’re a one-man team. It’s also hard to scale as managing multiple domains at once will take its toll on you.
How to Appraise Domain Name
How will you know how much your domain name is worth? You’ll need to have it appraised.
There are paid services that will help you appraise your domain name. However, you can have it checked through free online appraisal sites.
What Is Outbounding Domains?
Outbound domains are a practice wherein a domain name owner actively pursues buyers to sell their inventory. That way, owners don’t have to wait around for potential buyers to come knocking on their doors.
You’re basically finding leads through research and approaching them through email, phone, or social media with an offer.
List of Domain Marketplaces
Here’s a list of a few marketplaces where you can sell your domain names.
Alternative Ways to Sell Domains
You don’t have to go through domain marketplaces to sell domain names. Consider the following alternatives.
You can go through domain auctions held by different groups. You’ll find these everywhere including on the Clubhouse app. For instance, you can find opportunities on Rapidfire Domaining as well as Domamba. Note that you can also access Domamba directly through its website.
If private auctions aren’t your thing, you can go and sell your domain names on eBay.
While it might take some time to sell domains on eBay, at least it gives you some control over your progress.
Want to learn more about domain names including how you can make a profit off of them?
We recommend that you check out DNAcademy, one of the leading platforms for domain name training. Its lead instructor, Michael Cyger, is an accomplished investor and a certified domain name guru. He has a passion for sharing everything he experienced helping businesses acquire their domains.
You will also find several courses on buying and selling domain names on online course websites like Udemy.
On Udemy, you’ll find courses that are great for beginners. Some are even as short as an hour — that means you can get started rather quickly.
Here are a few interesting statistics about domain names.
A 71% Growth in Domain Listings
According to Squadhelp, a company that specializes in helping people find domains for their businesses, its premium listings grew from 70,000 at the start of 2021 to about 123,000 by the end of it.
That’s an increase of 71%.
Voice.com Sold for $30 Million
Alter reports that the biggest domain name sale recorded was for voice.com which sold for $30 million in May 2019. Other notable transactions include tesla.com ($11 million), hotels.com ($11 million), fund.com ($9.9 million), fb.com ($8.5 million), and healthinsurance.com ($8.1 million).
There Were 364.6 Million Domain Names in Q3 of 2021
Verisign states in its Q3 2021 Domain Name Industry Brief that there were 364.6 million domain name registrations across TLDs during that period. While still substantial, it’s a decrease of 2.7 million or 0.7% compared to Q2 of the same year.
Domain name registrations decreased by 6.1 million or 1.6% compared to the previous year.
There Are Over 158 Million .com TLDs
According to DomainTools, publicly available sources show that there are over 158 million .com TLDs today.
Other TLDs that cracked the top ten list are .de, .net, .uk, .org, .cn, .ga, .tk, .nl, and .cf.
DomainTools is quick to clarify that its numbers might not be accurate as it’s only publishing numbers based on information that registries are willing to make available.
Frequently Asked Questions
What Is a Domain Name?
A domain name is a unique address that people use to access a website. It’s useful since it replaces the use of an IP address which is harder to remember.
How Do I Find the Domain of a Website?
If you’re looking for a specific website that does not appear on search engines, you can try looking for it on forums, social media, blog posts, or articles.
What Are the Types of Domain Names?
You have top-level domains (TLDs), country code top-level domains (ccTLDs), and generic top-level domains (gTLDs). You also have the second-level domains (SLDs) which is the string of characters just before the dot in a URL.
What Is the Difference Between Domain Name and URL?
To simplify, a domain name is what you use to access a website. A URL is used to access information within a domain. URLs will include the domain name but have other characters added on top of it that help specify a specific location.
How Can I Create My Own Domain?
You can create a domain through a domain name registrar. There you can see if the domain you want is still available. If it’s available, you can purchase it right away. Do note that owning a domain name does not mean you already have a website. Creating a website is a different process that requires owning a domain name.
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