Stepping into the world of eCommerce is a scary experience, especially if it’s your first time. The easiest way to penetrate the online market would be to hire someone to build an eCommerce store for you. But if you’re adamant about doing it yourself, we’ve prepared this detailed Guide on eCommerce Website Development Cost Breakdown to help you understand and prepare you for the oncoming challenges you will face.
But before we dive deeper, let’s go over what an eCommerce website is, how it is different from a regular website, what are the benefits of owning one, and what questions you need to ask yourself before you decide on building an eCommerce website.
What Is As An eCommerce Website (Regular vs eCommerce)
Electronic commerce, or better known as eCommerce, is the purchasing and selling of any goods and/or services through the internet. When discussing eCommerce websites specifically, it means online stores which are showcasing and selling their products and/or services online.
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It’s pretty common for people to mistake an eCommerce website with a regular run-of-the-mill website. Although they do boast similarities, they’re in fact very different and built with different purposes in mind. A regular website is usually created with a goal to inform or promote, while an eCommerce website is purely transactional. And since they are transactional in nature, every element of an eCommerce website is focused on optimizing conversion, from flashy pop-ups to converting CTAs, and more.
Benefits Of Owning An eCommerce Website
An eCommerce website eliminates the need to have a brick-and-mortar store and allows your customers the convenience of shopping from anywhere, with an active internet connection being the only prerequisite.
eCommerce websites are also much easier to run and maintain as opposed to the traditional physical store, they require much less capital investment and running cost, and can be run and managed by you from anywhere in the world.
Other benefits of owning an eCommerce store include being able to add as many products as you want, compared to a physical store. And most importantly, owning an eCommerce website will enable you to target and market an audience on a global scale.
Factors That Influence eCommerce Website Development Cost
There are so many intricate factors that collectively influence the eCommerce website cost. You need to ask yourself these questions before you can get a rough idea of how much an eCommerce website is going to set you back;
- What’s the scale of the website going to be?
- What kind of traffic do you expect?
- How soon do you want it to be ready?
- Do you want to develop a custom website or wish to use a SaaS platform such as Shopify instead?
- How much emphasis will be put on the design?
- What additional features do you want on the website?
- How many products will be listed on the website?
- What kind of marketing strategy do you want to follow?
In this blog, we’ll be going over each in detail to help you map out an expected forecast of expenses.
Investment #1: Time
Although intangible, time is money and is one of the most influential factors in determining the cost of your eCommerce website. You have two options to choose from; using a purpose-built eCommerce SaaS like Shopify and BigCommerce which will help you save time, or a completely custom eCommerce website, which will take up a lot of more time, but will be worth it if done correctly.
Purpose-built eCommerce platforms come equipped with all the things you need to quickly set up an eCommerce website, like pre-built themes and templates, shopping carts, checkouts, and more. You can expect to invest around 100 man hours, give or take, if you invest in a purpose-built eCommerce platform.
If you’re a small to medium-sized eCommerce business, you can opt for a SaaS solution as it can easily meet and exceed your needs, but if you’re a large-scale enterprise, you may need a more tailored solution that can only be obtained through custom eCommerce solutions.
When choosing a custom eCommerce solution, you can expect to invest a minimum of 200+ man hours. So assess your needs, and choose the right one for your business.
Investment #2: Hosting & Domain
A small but influential aspect of your store’s performance boils down to its architecture, i.e., your web hosting and domain. SaaS solutions like Shopify and BigCommerce come equipped with hosting as part of their package; you only need to purchase a domain from them.
If you’re opting for a custom eCommerce solution like WooCommerce, you will need to invest in your own hosting infrastructure from third-party vendors and hosting service providers.
Each entails its own set of benefits and drawbacks. The pros of SaaS solution hosting is its feasibility. They eliminate the need of hiring a designated IT team, they are available to you for support and maintenance around the clock, and are overall more affordable.
The drawbacks of SaaS solution hosting is that you have to comply with their strict standards and policies, and you have less control over how you run and manage your store overall.
For example, rather than having multiple sub-domains, each for a different language, SaaS solutions will often use a translator to simply translate the text on your site, and you’ll miss out the opportunity to give your customers a more personalized experience.
Here is a rough estimate of how much a domain and hosting will cost you, depending on the size of your business.
Small & Medium-sized
- Domain name: $10 – $20 per annum
- Web hosting (SaaS solution): $29 – $250 monthly
- Web hosting (Self-hosted): $2.99 – $200 monthly
- Domain name: $10-$20 per annum
- Web Hosting: Custom pricing
If you are a large-scale enterprise, you’ll have to go for a self-hosting since anything less won’t be able to keep up with your demands. Self hosting will set you back anywhere from $1000 or more per month. If you’re not willing to cough up such a big amount, then be prepared to compromise on your user experience, store performance, and security.
Investment #3: Software
The majority of the cost of setting up and running an eCommerce website is typically dependent on the features, functionalities, and other components such as product pages, inventory management carts, checkout pages, and more.
Building these aspects from scratch is an arduous and time-consuming process. The alternative would be opting for an eCommerce SaaS solution as they are built specifically to cater to the needs of eCommerce businesses.
Small to Medium-sized
Starting from the bottom, low-end eCommerce SaaS solutions will start off anywhere between $20 to $30, depending upon your total number of sales and the number of features and functionalities you need. Below are a few examples of popular eCommerce SaaS solutions and what they cost;
Their Business Basic Plan will cost you a minimum of $13/month. This package comes with web hosting and a free SSL certificate. This package however does not include additional features like customized reports, multiple currency support, automated sales tax calculation, and more.
The Basic Shopify Plan is their lowest pricing tier and will cost you as low as $29/month. This package comes with hosting and a free SSL certificate. However, it does not include any additional features such as duty and import tax calculation and custom pricing by market and audience segmentation.
The Standard BigCommerce Plan goes as low as $29.95/month. This package includes web hosting for your store and a free SSL security certificate. If your store sales amount to over $50k annually, you’ll need to upgrade to their Plus plan which falls at about $79.95 per month.
The bigger your business, the more complex your requirements get. To fully cater them, you’ll need to invest in a more tailored solution to get features like a diverse product catalog, personalized shopping experiences for your customers, managing wholesale orders, and more. To give you a ballpark figure, a customized eCommerce software will cost you about;
- Initial Setup: $5000 or greater
- Monthly: approx $2000 per month
Investment #4: Design
Another major influencing factor is the design of your eCommerce website, which encompasses various elements such as the layout of your website, its navigation and usability, the user experience, your use of product lifestyle photography, and more.
When designing your website, you have two options to choose from; pre-built themes and templates or a completely custom layout and design. Each option entails its own unique set of benefits and drawbacks, you have to juxtapose and choose which option’s benefits outweigh its cons.
Using pre-built themes and templates, although a cheaper and quicker option, will have to be customized to ensure you’re getting what you want. It will set you back about;
- Website Design: $0 to $250
- Customization Costs: $1,000 to $5,000
Choosing a completely custom design for your eCommerce website entails a plethora of benefits such as custom features and functionalities. As your business grows, so do your needs for a more tailored solution, and this is where custom designs shine the brightest.
Since they are designed and built from the ground up, they can be tailored, right down to the minutiae of details. But be prepared because although they can be game-changing, they will be costly.
- Completely Custom Website Design = $5000 or higher
Other things you need to invest in are payment processing systems. Different payment processing systems have varying costs. For example, Stripe will charge you 2.9% of the transaction amount, plus an extra $0.30 per transaction.
As your store grows, so will your needs for a higher-tiered payment processing system, and the higher-tiered ones charge a lesser percentage amount as opposed to lower-tiered ones. Other than payment processing systems, you’ll need to invest in SEO (Search Engine Optimization), as it will help you rise through the SERPs rankings and increase your eCommerce stores visibility.
You can expect an SEO agency to charge you anywhere between $2500 to $10,000 or more, per month. It depends all on how much you want to invest in SEO.
Summary Of Cost Breakdown
|Small to Medium-sized Businesses||Large-scale Enterprise|
|Time||+100 hours||+200 hours|
|Web Hosting||$2.99 to $250 per month||+$1000 per month|
|eCommerce Software||$20 to $100 per month||$2000 per month + $5000 setup cost|
|Website Design||$1000 or less||+$5000|
|Payment Processor||2.9% + $0.30 per transaction||2.4% + $0.30 per transaction|
|Setup Cost||Up to $1000 + Time||Up to $10,000 or more + Time|
|Monthly Costs||Up to $350 per month + transaction fee||Up to $3000 per month + transaction fee|
You most likely only need the essentials when you first launch an eCommerce website. But over time, that changes. As your sales increase and the store grows, you will need to improve your site’s infrastructure and design to ensure that it maintains its upward trajectory and outperforms the competition.
After all, in order to make money, you need to spend money. We recommend you hire professionals from an eCommerce website development company, to handle all the difficult bits for you so you can sit back, relax, and reap the rewards.