Avoid Sticker Shock: The True Cost of Running an Ecommerce Website
There are two main ways to build an online store: use an ecommerce website builder or hire a web development company. The method you choose has a huge impact on how much your online store will cost.
For example, adding content like photos and videos are free with a store builder, but can cost upward of $5,000 if you’re using a web development company.
Ecommerce website builders are typically the least expensive way to build an online store. Using free, open-source platforms are attractive, but you end up paying for hosting, themes, plugins, and even help from a developer if you have specific needs, which can increase your total cost.
Ecommerce website builders are best for:
- People with little technical know-how
- People who need to build a website fast
Ecommerce website builders can range from $39 per month to $399 per month, depending on if you have retail stores or not.
However, the average ecommerce website price will cost about $39 per month for new stores, not including sweat equity!
Things that influence ecommerce website costs
Hosting
Website hosting costs can vary, with prices starting as low as $2.49 per month, and climbing up to $1,000 or higher. The cost depends on a variety of factors, such as how much traffic your store gets and any extra services you may need, such as automated backups.
Regardless, every website needs hosting to store its files. You’ll also need a domain name, which is like the digital home for your ecommerce store.
There are two types of hosting commonly used by ecommerce brands:
SaaS ecommerce platform hosting
Ecommerce platforms like Shopify do not require you to install, manage, or host a domain on your own. Everything you need is included in your monthly subscription fee.
Secure hosting comes with every Shopify plan, which includes:
- Unlimited bandwidth, so you don’t have to worry about paying more if you get more traffic
- Level 1 PCI compliance, which keeps customer data secure
- Blazing fast servers and instant updates, so you never miss out on the latest features
- An SSL certificate to prevent fraud and build customer trust
- Unlimited email forwarding
You’ll just need to buy and register a domain name separately. You can find available domains through Shopify’s domain name generator and start your ecommerce business fast.
Pricing starts at around $11 per year, but can run as high as $81 per year depending on the top-level domain you choose.
Self-hosted ecommerce website
Some ecommerce website builders like WooCommerce (a plugin for WordPress) and Magento are free. But you need to have an account with a hosting provider to manage your files and purchase a domain.
Some costs you’ll incur when self-hosting your website include:
- A web hosting account, which starts at $7.99 per month
- A domain name, which can cost around $14.99 per year
- An SSL certificate, which starts at $69 per year
There are some web hosts like Bluehost that offer services with a free domain name and SSL certificate for $2.75 per month.
The one drawback is that as your ecommerce store grows, you’ll need to upgrade your hosting plan to manage traffic increases.
If you end up with a high-volume website, self-hosting can cost you upward of $1,000 to $2,000 per month.
Hosting cost estimates:
- SaaS-hosted: As low as $39 per month with unlimited hosting.
- Self-hosted: Between $2.75 and $2K per month with incremental upgrades.
Resources:
- Stuck on a Name? Here’s How to Choose a Memorable Domain Name—Without Breaking The Bank
- Claim Your Name: The 7 Best Domain Name Registrars for Small Businesses
Payment processing
A payment processor is a company that manages transactions so shoppers can buy your products. Every ecommerce store must have one to take payments from credit cards, debit cards, and other smart pay options.
Payment processing costs depend on the plan you have with your ecommerce platform. For example, the Shopify Basic plan has a processing fee for online credit card payments of 2.9% + $.30 per transaction. The Advanced Shopify plan has a fee of 2.4%. If you are taking payments in-person, the fee is lower because there is lower fraud risk.
Every Shopify plan comes with Shopify Payments, which helps you start selling right away. Once you turn on Shopify Payments, you can accept credit cards and other popular payment gateways like Shop Pay, Apple Pay, and G Pay.
Offering Shop Pay as a checkout option makes it easy for customers to check out with saved payment and shipping information. More than 20% of shoppers are already set up with Shop Pay.
Our data shows that checkouts going through Shop Pay have a 1.72x higher average checkout-to-order rate.
After adding Shop Pay, women’s lingerie brand LIVELY saw average order value (AOV) for customers using that checkout option increase by 6% compared to those using different payment option methods. Shop Pay customers also bought over 35% more than those not using Shop Pay.
Brand and web design costs
Did you know that it takes about 50 milliseconds (0.05 seconds) for someone to form an opinion about your website? Not only that, shoppers buy based on trust, and your branding can help build that trust right away.
Ecommerce platforms like Shopify have templates you can apply to your site easily. They are a fast and affordable way to get up and running. Shopify Themes offer built-in tools to customize the layout, colors, style, and other settings.
These templates come set with everything you need to start your store:
- Homepage
- Product pages
- Shopping cart
- Checkout page
- FAQ
- About pages
Shopify Themes offer over 100 free and paid themes to help you find the right look and feel for your store. You can find themes based on categories like video and 3D products, big imagery, large inventories, minimalist style, fun and lively, and more.
Themes can run from zero dollars to upward of $180 depending on the one you choose.
Resources:
- Browse the Best Shopify Themes For Your Online Store (No Matter What Industry You’re In)
- Ecommerce Website Designs: 27 Best Online Shops and Why They Work
Custom development
From full design overhauls to adding a single button, sometimes you may need help to get your store looking the way you want.
Custom ecommerce website development refers to designing, deploying, and maintaining your store for specific business needs. Store owners can work with developers to create custom storefronts or tweak Shopify themes.
The ability to customize with Shopify really allows us to push it to the limit and create a custom checkout experience customers can trust and be confident in keeping their personal and payment information safe. It really makes customers feel like the site is going to take care of them.
Prices vary depending on what services you need. Some agencies like OuterBox charge upward of $100,000 for a customization job. Other established Shopify agencies can cost between $5,000 and $20,000, depending on the scope of the work.
Your best bet? Check out Shopify’s Experts marketplace if you need custom design or development work. You can find freelancers and agencies offering custom theme development. Prices start at $550.
Add-on and extension
It’s nearly impossible for one software to satisfy the needs of every ecommerce business. Chances are, you’ll want to add a few features to your website.
The best ecommerce software lets you add applications to your store to extend its ecommerce functionality and improve the user experience. Some are free and some are paid, which can increase the cost of creating your online store.
The Shopify App Store has over 3,200 apps for you to choose from, and there are many free Shopify apps. Whether you want to add email marketing, sell on Facebook, add social proof to your store, or improve your search engine optimization (SEO), there’s an app for that.
The price for paid apps varies. Most are available on a monthly subscription basis. You can also add private apps made specifically for your store. These apps are stored and run on another server, but you can generate Shopify API keys to give the app access permissions.
Custom apps can cost upward of $5,000, depending on your developer’s experience and rates.
Resources:
Business costs
Budget is always a consideration. You can launch an ecommerce website for as little as $100, but you’ll likely have to spend more than that to get your business moving.
According to our latest research, most small business owners spend around $40,000 in their first year, with 9% of that allocated to online business needs. (Shopify merchants spend an average of $38,000, while non-Shopify merchants average around $41,000.)
It takes time to turn a profit for an online business. It’s important to choose an ecommerce platform that won’t take up your entire budget and gives you the tools you need to succeed.
Focus on where your business is now and think about where you want to go in the future. Then find an ecommerce platform that can help you get there.
Start building your ecommerce site today
As you can see, the cost of an ecommerce website isn’t crazy expensive. After buying a domain name for your new ecommerce startup, you’ll likely just need to pay $39 per month for a standard online store with Shopify. If you want to add custom features or include paid apps, it can bring the total cost up.
Shopify is flexible and lets you choose the amount of money you want to spend upfront, so you can build a profitable and rewarding ecommerce website for your business.