The business world is steadily touching new heights of competitiveness everyday. With technology adding new dimensions to the way businesses connect with their audience, advertise and virtually function online, eCommerce is the thing to swear by.

In a scenario where having a online presence is a necessary evil, the first step that most new businesses take is to have a website designed and registered. But not every business is blessed to own/purchase a domain name; which by the way is like your virtual online identity. Can you compromise on this front? Certainly not!

Domain name leasing is a trend that's fast gaining ground with eCommerce financing options evolving at a rapid pace.

So what does this concept exactly mean?

To explain it simply, domain name leasing is nothing but lending of a website to a interested buyer for a fixed amount and duration. The legally binding domain lease agreements come with a 'Purchase Option' clause. This means that the buyer has "the right to buy the domain for a pre-agreed upon price at the end of the lease". During the lease period, the lessee (buyer) uses the domain to conduct his business operations.

Domain leasing benefits both the seller and the buyer mutually, more so if you are a start up or small business working on a tight budget. Here's a list of advantages that both parties enjoy:

Lessee (buyer)

• Cuts down on the cost spent on buying a domain name. The high interest rates makes traditional finance avenues expensive too. Instead, the business team can invest their time and money in building their product/service on account of a perfectly legitimate domain name.
• Since the buy out option exists after the lease period is over, this is a good investment option to save capital in the future. Moreover, if the business does not succeed much during the lease period, the domain name can always be returned.
• In terms of tax benefits, depending on the purpose of the domain name, there might be a few advantages.

Lessor (owner)

• Finding a reputed or say well to do business as your sell out partner is difficult. But leasing allows you to capitalize on building a goodwill value for your domain in the time it is used by another. This proves advantageous in a situation when the buyer does not opt for a purchase option after the lease time is over. In short, someone else is building your reputation and site traffic while the name is still yours.
• If the lessee's business is going well, it adds to your revenue stream more than say the PPC- style earnings or advertising revenues.
• Since the domain name has a certain popularity, it can earn you a higher resale value in the future. The next time bidders know of your domain name's value and reputation to be trustworthy and thus will offer you a better price.

We hope these tips proved useful. Leasing out domain names can be a cost effective alternative to traditional sale options. The agreement between the parties comes with a lot of open space to choose and act.So weigh the pros and cons well before selling/buying a domain name.

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