If you are planning to launch a new on-line business then it’s vital that you choose the right domain name as it will improve your on-line identity and grow your brand awareness.

1. Choose a name that best represents your business. If the domain name immediately and specifically says to potential consumers what you do then you’ll know your domain name works. For example, think about holidays.co.uk compared to skiingholidays.co.uk compared to adventureholidays.co.uk. With the latter two you know exactly what type of holidays the business specialises in, rather than just a generic holidays banner.

2. Memorable words are ideal for domain names because potential customers will remember your web address – and will also be more likely to pass on the web address to other people. Keep it simple too and try not to use more than three or four words in a domain name. For example, petfooddirect.co.uk is simple to recall and does what is says on the label.

3. There is still a lot of debate about whether keywords in domain names will increase SEO but it might still be worth bearing in mind what customers would search for if looking for your business products/services. You should try to choose keywords that are the names of the products or services you will be offering on your website.

4. Decide on the Top Level Domain (TLD) that you will use, for example most UK businesses end in .co.uk. A study this year showed that 77% of British on-line users are more likely to choose a .uk rather than a .com address when looking for information through a search engine. Or you could choose .org.uk for non-commercial organisations; .me.uk for individuals, .ltd.uk and .plc.uk for Ltd and Plc companies.

5. It’s a good idea to register several variations of your domain name with other suffixes such as .com so that other people cannot come along at a later date and capitalise on your brand name using another major domain name type. Also, the more variations that you register, the more chance you have of capturing traffic to your website.

6. If your top choice of domain name is not available then why not slip in a hyphen? Many people are familiar with using hyphens in domain names so this should not put off too much traffic to your website. Although a domain name without a hyphen is always the best choice.

7. Choose your domain name quickly. UK domain names are being registered at a rate of three every minute. They are allocated on a first-registered, first-served basis so any delay in choosing your domain name could mean someone else gets there first.

There are lots of sites that allow you to check the availability of domain names or ask your web designer.

More evidence that businesses are seeing greater value in on-line retailing comes today with the news that ToysRUs has paid £3.6m ($5.1m) for the Toys.com domain name.

It’s thought to be the highest price paid for a domain this year although nowhere near to the record $14m paid for sex.com in 2007 or the $9.5m paid for porn.com

While the prices being paid for domain names have dropped by as much as half during the credit crunch, many domain name sellers are reporting an increase in the number of sales, especially to small and medium-sized businesses.

One UK domain name seller Sedo reports a trebling of domain name sales.
A spokesperson for Sedo is reported as adding: “In the case of ToysRUs it could be that they are thinking of rebranding or increasing their online presence. Toys.com is going to put them in the top search ranking and is likely to give them kudos in terms of brand recognition.”

Internet retail observers believe that as the recession bites more businesses are looking to go on-line in a bid to stay afloat. E-tailing is seen as a more cost effective and efficient way to operate than via high street retailing.

One analyst said: “This is especially true of brick and mortar retailers. There is much less overhead involved in selling toys for example online than through hundreds of cash-draining big box retail stores.”

The Toys.com auction, which took place last week, saw a series of bidders for the domain. But as the price hit £2.1m ($3m), only two were left: ToysRUs and National A-1 Advertising.