Why is a short domain name expensive?

A short domain name is statistically rarer than a long one. Thus, a short name of two, three, four or five letters often costs more than a ten-letter address.

A short domain name is rarer and more sought-after than long or compound domain names.

[Article updated on December 07, 2024 from the previous article published on 11/21/2023]

Equestrian third party Escrow has just published a new quarterly review in December 2024 of domain name transactions carried out on its site during the third quarter of 2024. It echoes our previous article on the quarterly review for the third quarter of 2023. Escrow is a platform frequently used to secure the purchase of a domain name.

Domain name sales totaled $99 million in the third quarter of 2024. This represents an 8.6% increase over the second quarter of 2024. As a reminder, transaction volume in the third quarter of 2023 was $85 million.

In its year-end report, Escrow highlights the momentum of .AI(Artificial Intelligence) transactions. According to Escrow, the value of .AI domain names rose to a total of $2.5 million in Q3 2024. This is close to the Q1 2024 record of $2.6 million.

How much does it cost to buy back a domain name that’s already been registered?

The median price of non-content domain names has been rising in recent months.

The average price of a domain name buyback is stable at $5,000 in 2024.

It was $4,614 in Q3 2023.

Escrow 2024 average domain name redemption price

The average price of a domain name on the secondary market has been rising since the end of 2020.

Between 2015 and 2020, the average price of a domain name recovery is around $2,500. The average price has risen significantly over the past 5 years. In fact, the price of a domain name buyback has doubled over this period.

Short domain names more expensive than regular domain names

The median price for two- and three-character .COM domain names was $50,000 in Q3 2024 at Escrow. This compares with $46,500 in Q2 2024 and $41,250 in Q3 2023.

For all four characters, the median buyout price for a .COM domain name in 2023 is $9,000. That’s almost double the price of a traditional domain name.

For five-character .COM domain names, the median price was $15,000 in the penultimate quarter of 2024. This is a significant increase on the previous quarter ($8,100) and last year at the same time ($9,000).

Escrow’s average buyout price for a five-character domain name in 2024

Finally, the median price for six-character .COM domain names fell from $7,000 in Q2 2024 to $6,000 in Q3 2024.

Why buy a short domain name?

A short domain name offers a number of practical advantages, particularly for businesses. A Solidnames customer told our blog about buying a four-letter .COM.

It’s easy to remember, communicate and distribute. A short domain name is easier for your customers, partners and prospects to remember, pronounce and write.

It also saves space on your communication media, such as business cards, flyers or social networks.

A short domain name gives you greater visibility on the web and creates a relationship of trust with your visitors.

This reduces the risk of typing errors and adapts to mobile use. A short domain name is easier to type on a keyboard or touch screen, which limits typing errors and redirects to competing or malicious sites. As a result, it’s better suited to mobile formats, which account for a growing share of web traffic.

What’s more, a short domain name is more likely to be bookmarked, shared on social networks or recommended by word-of-mouth. It can also have a positive impact on SEO, if the domain name contains a keyword relevant to your business.