How to calculate the cost of Starting an eCommerce Business?
The eCommerce industry is changing at an unprecedented rate. Traditional brick-and-mortar retail stores are finding it difficult to compete with the sheer speed, power, and convenience of online shopping. The eCommerce industry is projected to reach $5.5 trillion in annual sales worldwide in 2022, and it is only growing from there.
That said, the eCommerce industry will continue to grow and change, with new technologies and processes being introduced and old ones being improved upon. Undoubtedly, we will see new eCommerce platforms with new capabilities emerge, old ones grow and evolve, and consumers’ experiences change profoundly.
Speaking of new eCommerce platforms, online store founders often are trapped in the cost factor. How much does it cost to create an eCommerce business? The question bothers and, sometimes, keeps startuppers from starting their online retail business. So, why not understand it thoroughly once and for all?
If you have an idea about a unique eCommerce business and want to know how to calculate the cost to start an eCommerce business, keep reading. In this concise post, I will help you comprehend the cost structure of eCommerce app development so that you can plan a nearly accurate budget to start your online store.
Let’s get started!
Unavoidable costs for an eCommerce startups
DOMAIN NAME: $0.99-$15/YEAR
You will need to purchase a unique domain name for your eCommerce store website URL. It acts as an address to your online store — for example, www.walmart.com and www.ebay.com.
HOSTING: $3.50-$250/MONTH ($29/MONTH AVERAGE)
To make your eCommerce store accessible through the internet for your visitors, you need a hosting server to host your eCommerce website. YOu can purchase a hosting plan that is more like renting space, as it’s where you store all your website files and data. Some of the popular eCommerce hosting platforms are:
Shopify offer plans starting at $29/month
BigCommerce starts at $29.95/month
WooCommerce, which is a WordPress extension, is free to start, but you might have to pay for additional features.
INVENTORY: $0-$1000 TO START
You will need something to sell on your online store, which could be anything from fashion, vintage items, books, gadgets, electronics, appliances, etc. Your inventory cost will vary depending on what and how you sell.
For example, you won’t have to physically store, pack, and ship inventory if you adopt the dropshipping model. You can directly ship from the wholesaler or manufacturer’s warehouse/factory. Hence, it will save money for warehouse management. However, you won’t have control over the inventory. On the contrary, when you buy your stock, you have full control over your goods.
PAYMENT PROCESSING: 2–3% OF REVENUE
Lastly, there will be a mandatory payment processing fee to bear that starts at 2–3% and $0.30 per transaction.
Costs that can benefit you with an edge over your competitors
- G Suite Account: $5/Month
- Website Designer: $300-$3000+
- Website Theme: $50-$200
- Logo Design: $15-$300
- Marketing: The Sky’s The Limit
- Warehouse: $4 To $7 Per Month Per Square Foot
- Product Photos: $20-$1000
- Email Marketing Software: $0-$50/Month
- Apps & Plugins: $0-$200+/Month
Are you ready for this?
Now that you have a list of cost factors to start an eCommerce business start digging into every aspect and outline your requirements. Do your research and choose the solution suitable to your eCommerce startup idea. Don’t forget you can always consult with eCommerce experts to select better options.
So, it helps. See ya!
