Ecommerce sales have been soaring in 2020 with the recent world events like Covid-19 and the closure of many shops. To stay afloat, companies are turning to technology as a solution to reach out to their customers. According to Satista, ecommerce sales will nearly double between 2019 and 2023 and that is prior to the pandemic impacting the business. The main question that always surfaces is how much an ecommerce website costs and we’ll help you answer it.
The number of small business running an ecommerce website is still exceptionally low due to fear or lack of knowledge about available technology out there. The sole cost of building an ecommerce website is what keeps most businesses away from converting to it. We are here to address what to consider before building your own solution, especially given number of solutions out there for businesses of any size to afford ecommerce stores.
”According to Statista ecommerce sales will nearly double between 2019 and 2023 and that is prior to the pandemic impacting the business.
What Should you Consider Before Creating your Ecommerce Website?
The first question that comes out from our customers is always about the price. We will address this later on, but the fact is, an ecommerce website is not a magical solution that immediately boosts all your sales. An online presence is mandatory to support your business goals and brand. You need to be where your customers are in the digital world so they can easily find you. So before building your ecommerce store, you need to ask yourself the following questions:
Who are you going to target?
The type of products or services you will be selling online will impact the type of platform you will end up building. Whether your services are B2C (consumer) or B2B(business) oriented or listing actual products, the approach can differ drastically. These choices mainly allow you to determine the type of features that are “must haves” for your platform. It includes features such as inventory management, shipping or even connecting to an ERP(Enterprise Resource Planning). Even if your main sales channel is Amazon, you still need to support your products by bringing traffic to it.
Are you going to move your business model 100% online or also have a physical store?
With the current situation and many businesses being unable to operate traditionally with walk-in customers, this questions determines how your investment will be used. If you already have a storefront, adding an online store expands your reach. While having both, you need to include integrations to track your inventory correctly and avoid misinformation for your online customers.
What is your ecommerce development budget?
The big question you will get from any web development agency will always be about the budget. Given the variety of solutions and the range of pricing out there, budget determines how big and complex your system will be. It will also determine the level of integration you can do. It’s a critical information to understand the limits to work within. Knowing how much you can spend on a solution avoids overreaching for features that can blow your budget.
What is your shipping and payment options?
Shipping costs are influenced by the country your business is set in and the same goes for your payment options. Websites can support a variety of payment gateways, but they cannot support all of them at the same time. So finding out your preferences will determine not only the solution that is best fitted for your business, but also your operational costs.
How many products do you have and what development stage is your company at?
This last question is probably the most important one that you have to ask yourself. Determining the number of products that will be put online and the size of your company allows an agency to better price out the cost of the project. A start up with a big inventory will have to make choices to downsize the number of products to a budget they can manage. As for a bigger company that is well established can easily have a wider range of products. A bigger company can also invest in their marketing strategy to reach out to more clients and see their return on investment faster.
”The big question you will get from any web development company or agency will always be the budget.
How to Calculate your Ecommerce Costs?
Onto the main question, costing out an ecommerce solution for your business. With the wide range of solutions that can influence pricing, this part will allow you to determine what budget you should set aside for your project. Right from starters, you can consider one of two main roads most businesses will take: a custom ecommerce solution or a turn-key solution with a subscription. Pricing can vary from a few thousand to hundreds or even million of dollars in investment.
Costs are typically organized as infrastructure and design including the following elements:
- Ecommerce software
- Domain name and registration
- SSL Certificate
- Payment processing costs
- Extra features
Ecommerce Websites Costs Breakdown
As mentioned earlier, the first part that determines your overall costs is the infrastructure. If you plan to have a fully custom solution or use a ecommerce platform, pricing will vary greatly. If you build it from scratch, the front up costs can be massive while requiring also more knowledge and resources to manage it. Most businesses prefer to go with an ecommerce platform that have multiple customization that can fit your business.
Here’s a short list of the main ecommerce platform out there:
$ 29+Per MonthPrice varies from 29$ to 299$/Month
Hosting is Included / Cloud-based
For all business sizes
Best all-around ecommerce platform
Extra fees for alternative payment gateways
Reformat required when switching themes
$ FreePer MonthPricing is free with paid plugins and functionality
Hosting is not included / Cloud-based
For all business sizes
Great for SEO
Seamless WordPress Integration
Self-coded or paid extension
Requires advanced knowledge
Constant site-maintenance required
$ 29+Per MonthPricing range is29$ to 299$/Month
Hosting is Included / Cloud-based
For all business sizes
Lots of build-in features free and paid
Great for SEO
Easy to use
Tricky interface to navigate
Limited number of apps
$ FreePer MonthDevelopment costs range from a few thousand to hundreds of thousand.
Lots of Built-in Features
Greater amount of customizations
Best hosted on dedicated servers
This gives you a great idea about available platforms out there, but you also need to plan out additional costs, like the domain name cost (average $10 to $15 / year) and hosting costs based on your needs. Self-hosting requires additional costs and dedicated hosting can range anywhere between $80 monthly to over $800 monthly. BigCommerce and Shopify offer cloud-hosting included in the pricing, while others won’t.
Hosting pricing varies mainly based on the number of people visiting your website and the rate at which you sell your products. Having a higher quality hosting avoids your website pages crashing during key moments, like when a customer is purchasing a product or service. So consider this wisely instead of going for the cheapest solution.
SSL Certificate Costs
Ecommerce website need an SSL certificate to help your customers know that your website is safe and protected, especially due to the transactions that happen on it. If your website isn’t secured, people will avoid shopping on it as their information is not well protected. The cost for an SSL certificate goes from $10 to $100 monthly if you choose to purchase it yourself and based on your hosting provider.
Payment Processing Costs
Your choice of payment processing will impact also your revenue for each of your sales. Whether you choose Paypal, Credit Card Company, Stripe or others, costs vary. Here are some examples:
For a $100 transaction, Paypal will take 2.9% + $0.30 per transaction. So $3.10 in fees. If you are using Shopify, they will take an additional 2% since you aren’t using their proprietary payment solution. So your base fee is $5.10 for a $100 transaction.
So far, WooCommerce and BigCommerce offer the cheapest solution as they don’t charge an extra on top of your payment gateway.
”Your website design is how your brand will reflect in the eyes of your customers. Make it unique and memorable!
Now that you found out the base cost of your ecommerce website to run it, it’s time to have a look into the production of it and that starts off with the design costs. Ecommerce development website costs include the work to create a great user experience and that your brand stands out online. Standard costs include the store theme and design costs.
You have three options when you look into designing your website:
Start from a template theme.
This option is one of the most popular out there as they usually come with a load of integrated features and functionality you need for your design. The main advantage is that there are multiple free options out there to integrate with your ecommerce platform and a lot of customizations. The only downside is that your competitors can easily have a similar theme and make sit harder to offer your unique twist to it. An agency can still start working from a theme to access basis framework and customized well beyond its original format to make it unique, but this comes at extra costs.
Use a theme framework.
While this allows for more customization option, often via drag-and-drop options, it still has limitations. A designer can make your website look very unique using this format and they are automatically updated as well. But there are many limitations to consider and less flexibility on functionalities depending on the ecommerce platform you go with.
Custom design it yourself.
The greatest advantage to a fully custom design is that everything is possible. If you are willing to put the time and resources, you can create a website that will stand out and make your brand shine like no other. But it means higher overall costs, lengthier time to market and very qualified designers and developers with risks of mistakes that are harder to repair compared to other solutions that have been developed and corrected for years.
Add-on, plugin and extension costs
Finally, to give your website some very useful features, you will have to consider plugins. These vary based on the ecommerce platform you chose to start with and so does the pricing. These include elements such as chat service, PPC marketing, newsletter integration and automations. Each platform comes with free or paid options while you can also have developers build custom apps for your needs.
”An agency can take care of setting up everything for you and provide a seamless customer experience while showcasing your brand at its best.
What’s the Cost of Getting Someone to Build it for You?
An agency can take care of setting up everything for you and provide a seamless customer experience, product displays, online orders processing, inventory, shipping and payments. They can setup up everything for you and ready to use. To make it happen, these usually include the following:
- Back-end web development.
- Front-end web design.
- UI/UX design.
- Ecommerce services.
- Digital strategy.
- Custom software development.
Typically, an agency will take the time to know you, your business, brand and products before offering a cost estimate. The bigger and more complex the project, the pricier it can be. It’s best suited for companies that don’t have in-house designers/developers or that have limited resources available in-house for it. If a company wants to get an online store opened as quickly as possible, an agency is also the right way to go given they have the experience, knowledge and proven methods to streamline the process.
While you might think that going through an agency is more expensive, the time you save compared to doing it in house is the actual comparison your business should be making. An in-house team might need more time and deal with a lot of errors if they aren’t experienced professionals that can prove costly on the long run.
Ongoing Website Costs Once You’re Online
Once your website is live, there are still operational costs to consider on a monthly basis like backing up your website, maintenance, security, inventory management, product marketing (SEO, Content Marketing, Influencer marketing, social media marketing) and email marketing and monthly costs based on your ecommerce platform of choice. These costs vary from $100 a month to several thousands based on the size of your business and the investment you want to make into product marketing.
Based on your business needs, you can launch a ecommerce website yourself for less than $1000 if you want to put the time in it. You can also get an agency to do the work for you with more complex features. You can try our calculator to get an estimate of how much it would cost to build an ecommerce website.
Once you are live, keep in mind ongoing operational costs to attract a constant stream of customers. There are options for any budget once you start looking into it. We can help you make the best decision for your brand and business to help you increase your sales.