The Complete Guide to Domain Names: What Are They and How Do They Actually Work

Posted under: Blog and Internet

When you create a brand new website - whether personal, a blog, or a business- one of the most important and exciting steps is to come up with the name. That’s usually going to be the address people type in to go to your website. But there’s actually so much more to it than just a cool name that’s easy to spell and remember. Your domain name is, in many ways, your online calling card and the primary way people can find you on the internet

Moreover, it can determine your traffic, how you rank in search engines, and how the public generally perceives you. A domain name is as much marketing and branding as it is utilitarian. Like it or not, it’s an essential part of your online presence, so here are some important things to know about what domain names are and how they actually work. 

What is a Domain Name

To put it simply, a domain name is your website’s “home address.” Just like you use your home address to go to your house, you use your website address to go to your website. More specifically, a domain name is everything that exists between the https:// (which is always there but not always displayed) and the first slash, if there is one. is the domain name and typically lands one on the website's “home” page. 

Going beyond the practical and diving a bit into the technical, a domain name is a "human-readable identification string." We say human-readable because it is made up of letters and numbers that a human can read and understand and remember. And because the primary function of a domain name is to direct traffic to your website and your website alone, every domain name in the world is 100 percent unique, just like every home address is unique. 

How Do Domain Names Work

At its most basic level, a domain name tells your browser where to look for a piece of information on the internet. To understand how it does this, it's useful to know what each part of the domain name tells your browser. For starters, all domain names belong to a Top-Level Domain (TLD), which is administered by the Domain Name System. TLDs are the .com, .org, .net, .edu, .gov, etc. extensions we see at the end of most domain names. Every domain name on the internet will "belong" to a Top-Level Domain. For example, the "broadbandsearch" domain name above is a part of the ".net" TLD. So, when you enter something into the URL search bar of your browser - let's use https:// (not shown), your browser will see the domain is part of the .net TLD, so it will ask the servers in charge of this TLD where it can find the "broadbandsearch" domain, and then it will ask the servers where the domain is held where it can find the "blog" path and then the exact page you're asked it to display. 

This all happens instantly, and your browser will, by default, store what it has learned from this exchange of information so that the next time it's asked to retrieve it, things happen even more smoothly. In this sense, it might be helpful to think of a domain name as a digital piece of property. When you purchase the rights to it, you become the one who controls the content that gets displayed on the domain. And until you relinquish that control, no one else can change what's associated with that domain.

What are the parts of a domain name?

To properly understand domain names, let’s take some time to break it down into different parts. Using the same example we offered above (, when reading a domain from left to right, you’ve first got the domain name itself, “broadbandsearch”, where “.net” is the top-level domain(TLD) or extension. 

What are the different types of Domains

It’s helpful to know that there are actually 3 types of domains. 

  • Top-level domains (TLD)
  • Second-level domains (SLD)
  • Third-level domains

Top-level domains are what are known as “extensions'' and are the rightmost section of a domain. Top-level domains can also be of several types. A second-level domain is a domain name that you can pick and customize according to your needs and preferences. This is the middle domain. The third-level domain is the prefix that can sometimes be attached to a domain, and they’re also known as subdomains. “www” is a subdomain. 

TLD: Top-Level Domain

A top-level domain (typically known as TLD) is the domain extension. It’s the very last segment of a URL, and it designates the purpose and location of the website address - .com, .net, .org, .ca, etc. One can currently choose between 1,503 different TLDs. 

ccTLD: Country-Code Top-Level Domain

Country code top-level domains were created to designate websites pertaining to a particular geographical region. However, these were quickly appropriated for other purposes as well, including marketing or branding. Tokelau has had the largest ccTLD for a long time, thanks to the fact that it enables both businesses and individuals to register domains free of charge. 

gTLD: Generic Top-Level Domain

Generic top-level domains (gTLDs, if you would) are some of the most common extensions, usually made up of 3 or more characters and not pertaining to any particular geographical location or organization. .com, .net, and .org are some of the most common ones, but there are also options like .app that have recently become more popular .wyz, or .icu. 

What are the differences between a Domain and a URL

The easiest way to explain the difference is to understand that a domain is part of a complete URL. The URL itself is the full string of numbers and letters you type into the address bar (including the path and transfer protocol), but the domain is only the name itself. For example, “” is a complete URL. Within this complete structure, is the domain. “https” is the protocol, while /blog/ is the path to the page you want to access. In this case, keep-home-internet-safe-secure.

Why Do You Need a Domain?

Domains aren’t a question of want but of need. You simply cannot have a website without picking out a domain - it’s part of the address that helps direct you to the correct page. But it serves much larger purposes than that. Your domain name becomes part of your identity, and whether you’re running a personal blog, a website for your company, or an organization, the domain name says a lot about who you are and what you do. In addition, it’s an essential tool for marketing, brand recognition, and SEO, so picking out a domain is more than just picking a string of letters to direct people to the right “door.” Here’s why you need one:

Name Recognition and Recall

One of the major reasons why domain names are valued as much as they are is that some are much easier to recognize, remember, and share. 

The role a domain name plays in getting a website's name out there is why you rarely see websites with dashes and other punctuation and also why many companies these days choose names that are slight misspellings of a word, either to help them stand out or because the domain name for that word was taken. A good example is Lyft. You want to get your name in people’s heads, and you have to make it unique and easy for them to remember. 

Branding and Marketing 

This characteristic of domain names comes in handy, particularly in branding and marketing. An easy-to-remember domain name can help get a name stuck in people's heads, but perhaps more importantly, a domain name, or rather the TLD portion of your domain name, can tell people a lot about your company,

These affect perceptions because they used to mean something. For example, in the past, to get a .org domain name, you needed to be a registered non-profit organization, otherwise, it was off-limits. That is no longer the case. For-profit companies were assigned .com. Other TLDs, such as .gov and .edu, also had specific requirements and still do. That gave your domain much sought-after authority. However, the other domain names have become interchangeable; one no longer needs to be a non-profit organization to get a .org domain name, which renders them common and forgettable and potentially raises ethical issues. 

Other TLDs once considered out of fashion, such as .net, have become more mainstream, and others, such as .co or .io, have become trendy, indicating to visitors that they've reached the site of a forward-thinking body. 

Search Engine Optimization

SEO is one of the major concerns when choosing a domain name because it’s partially what’s going to help direct traffic your way naturally. In combination with other marketing efforts, it’s an extremely valuable tool for search engine optimization. 

Having a domain name related to the topics you're hoping to rank is quite important. For example, if you were trying to rank for men's health supplies and your domain name is, this doesn't tell a search engine much about the contents of the site. 

Domains also help because they carry referring domains with them. These are the number of sites that link to another site, and it's a huge factor in SEO because it counts as an endorsement for that content, which boosts its authority. 

For this reason, older domain names that have been around for some time and have been receiving steady traffic and links will be significantly more valuable than a domain name that has just been registered. 

As with the other things we've discussed, just having the right domain name doesn't guarantee good ranking results, but it certainly helps, and the SEO industry is helping to make domain names more important than they've ever been. 

What is the Average Cost of A Domain Name

The cost of a given domain depends on how in demand it is. When purchasing any domain, you pay a registration fee and then a monthly fee that can be a couple of dollars a month or a few thousand if the domain is hugely popular, coveted, and generates a lot of traffic and revenue. The TLD can also impact the price (.com is going to be more expensive than .net), and so can the registrar. According to Forbes, the average domain name cost is only $10 to $20 per year, and that’s because most domain names are not that well-known or valuable. 

What are the top 5 most expensive Domain Names

To give you an idea of how crazy things can get in the world of buying and selling domain names, take a look at some of the most expensive ever:

  1. — $49.7 million
  2. — $35.6 million
  3. — $35 million
  4. — $30.18 million
  5. — $30 million

How to Choose A Domain Name

Okay, so you know the basics of a domain name, but how does that help you choose one for yourself? It’s not just about grabbing what’s available or cheapest. Here are some helpful ways to choose the perfect domain name for your website. 

  • Use The Right Domain Name Extensions. (.com, . org, . net) As we mentioned, your extension is extremely important, and while it no longer necessarily designates the same level of verified authority (.org, etc.), it can still say a lot about your company. Beyond just indicating geographical location, your extension can give visitors an idea of how modern and progressive you are (trendy extensions like .app, or .co) or more conservative (.com, .net).
  • Brandable Over Generic. Think about what a domain name means for your business and how it affects it. A unique, unusual name is more likely to stick in people’s minds than something overly generic. Hence, the 2010s trend of names that lack vowels - Tumblr, Grindr, Flickr, Scribd - are highly branded words that stand out. 
  • Short Is Better Than Long. Again, the point is to be easy to read, spell, and remember. The longer and more complicated your domain name, the more opportunities for people to forget it or misspell it. Short and sweet is the best route to success. Allow us to once again point you to the tried and true examples of one-word and other short names: TikTok, Twitter, WeWork, Google, Apple. 
  • Make Sure It's Easy To Type. If you’re going to go for a “creative” spelling, you still have to make sure it’s easy to type. Take out too many vowels or reach for an alternative spelling that’s too unusual, and you’re going to get the opposite effect. Instead of being quick and easy to remember and spell, people will struggle to get the right combination of Ys, double Zs, and other “interesting” stylistic choices. Simple is better. 
  • Make Sure It's Easy To Pronounce. Even though we’re talking about an online product, word of mouth is still going to be one of your primary means of advertising and brand awareness. Otherwise said - you want people to be able to casually tell their friends, their family, and their boss - about the great website they found. If your name is 4XyllEn, you’re making it too hard for everyone. Cater to the broadest possible audience and the lowest common denominator. Simple to spell, simple to pronounce, simple to talk about. 
  • Avoid Hyphens And Numbers. And speaking of easy to pronounce, unless you’re Elon Musk, you can’t get away with naming something with hyphens and numbers - no, not even your domain, let alone your kids. You may be tempted to throw in some numbers in your efforts for uniqueness to make it edgy. Or your perfect name is already taken, and you think you can solve that with a hyphen. If your ideal name is “,” and that’s taken, so you buy “” instead, do you know what happens? a) half the people will not be aware or will forget about the hyphen, b) all that potential traffic is now going to the non-hyphenated website, which is probably a direct competitor. 
  • Consider Using “Niche” Keywords That Reflect Your Website. If you’re struggling to find a relevant and unique name, consider the value of niche keywords specific to your industry, service, organization, or website. That will be instantly recognizable and highly brandable.
  • Think Long-Term Over Short-Term. When you’re just launching your website, it’s very tempting to opt for a topical name because it’s relevant at the moment and attracts attention. Every once in a while, there’s a trend for branding and domain names, and all the names end up sounding the same. Again, think of the missing vowel trend. Or the trend in clothing retail to use two names for your store/domain. “Lucy&”, “Lo&,” “Lord&”. The problem with these names is that while they’re hot at the moment, they may not be that relevant in 10 or 20 years. Does “Flickr” look and sound ridiculous to you now? That’s because it is. You’re building a long-term business, not a quick scam. Think long-term and pick a timeless name. 

How to Get a Domain Name

Here are the steps you need to follow to get your domain name.

Register Your Domain

There are a few essential steps to registering a domain. First, you need to find your perfect name. Then, you check if it’s available and if it is - decide what your extension should be. Pick out the best registrar for the job, and don’t forget to purchase the domain. That will ensure that no one can steal it from under your nose. 

Do a Domain Search

Once you’ve chosen what you think is the perfect domain, you need to do a domain search and make sure that it’s not already taken. You could do it manually, but it can take a long time and prove to be inaccurate. The best way to do it is to use a domain name search platform - that will tell you exactly whether or not your idea is available. Some will even suggest alternatives. 

Choose a Domain Register

Your name is available, rejoice! But now you need a domain register. They may all look the same to you, but like all services, some are better than others. Differences occur in pricing, the level of service, customer support, or privacy. 

How to Sell A Domain Name

But let’s say you own a domain that you’re not using - or no longer using - and it’s valuable. It’s not creating revenue for you just sitting there, so you can sell it to someone who will use it. You get to sell it to the highest bidder if you're lucky. The easiest way to do it is by placing an ad on the website itself. Essentially, the new home page is going to be an announcement that the domain is up for sale, along with contact information. 

Another option is to post it on dedicated websites for domain auctions. Flippa, NameCheap, or Sedo places you can use to put the domain up for bid. You can also use a registrar website, like GoDaddy, but this will come with fees. 

Domain brokers are a great option, particularly for very valuable domains. It takes the sale out of your hands, which is a big plus, but it also comes with a 10% to 20% fee upon the sale's completion. 


Domain names are more than just a convenient way to name your website. They’re the first impression users are left with about your online presence, which counts for more than you think. Your domain name can designate the kind of entity you are, where you are located, how modern you are, how much traffic you get, or how well you rank in search engines. That’s right - it’s practically magic, and it should not be overlooked or underestimated.