How Much Does it Cost to Start an Online Store?

Ecommerce is a big deal, and is growing by billions year over year. As brick and mortar retail struggles to attract buyers into their behemoth flagship stores, old players and new faces alike are turning to web-based shopping. 

There are tons of kinds of online stores, but the basic model is that you trade some sort of good, service, or product for someone else’s money, all online. 

Online stores don’t require a traditional real estate lease and are fairly easy to set up and run. Still, they do have associated costs that you should probably understand before undertaking your own online shopping experience.

Money

Hosting

Traditional retail spaces have a lease, but ecommerce retail spaces have hosting. When you are building a traditional brick and mortar store, location is everything. While some people might drive 30 minutes outside of their way to go to a known, popular brand, like Trader Joe’s, most small businesses need a great location to get foot traffic. While you don’t technically have a location on the internet in the same sense that you do with a physical store, you do have web hosting.

Web hosting defines the uptime of your website, the amount of traffic that you can realistically handle, and the security level that you can have. When something goes wrong with your physical store, you call your landlord or property management company. They will get everything back running quickly so that you don’t lose thousands of dollars over a busy weekend. Your hosting company is like your online property management company. If something goes wrong with your site, you give them a call and they can hopefully get you live in a hurry so that you stop bleeding money with a downed site as quickly as possible. The right host can save you  money by getting your site back up hours quicker than a second-rate hosting company can.

Finding the right web hosting for your ecommerce store is just as critical as finding the right location for your small business. Use our hosting finder to compare top web hosts and to put together the right site on the right host.

Domain Name

Hosting

Traditional retail spaces have a lease, but ecommerce retail spaces have hosting. When you are building a traditional brick and mortar store, location is everything. While some people might drive 30 minutes outside of their way to go to a known, popular brand, like Trader Joe’s, most small businesses need a great location to get foot traffic. While you don’t technically have a location on the internet in the same sense that you do with a physical store, you do have web hosting.

Web hosting defines the uptime of your website, the amount of traffic that you can realistically handle, and the security level that you can have. When something goes wrong with your physical store, you call your landlord or property management company. They will get everything back running quickly so that you don’t lose thousands of dollars over a busy weekend. Your hosting company is like your online property management company. If something goes wrong with your site, you give them a call and they can hopefully get you live in a hurry so that you stop bleeding money with a downed site as quickly as possible. The right host can save you  money by getting your site back up hours quicker than a second-rate hosting company can.

Finding the right web hosting for your ecommerce store is just as critical as finding the right location for your small business. Use our hosting finder to compare top web hosts and to put together the right site on the right host.

Domain Name

This is basically the name of your store, the web address that people are going to look up in order to find you. It should be an annual charge and shouldn’t cost much money at all, so definitely don’t overpay for domain name registration. 

CMS and Structure

When you are running an online store you will need to use both a CMS and some sort of monetization extension that allows you to process payments. Shopify and Woocomerce are two excellent choices for creating an online store, as they offer a variety of out of the box features and functions that will get you selling in a hurry.

The base level of Woocommerce is completely free, but if you want some upgrades or themes you will have to pay additional money to get a hold of those. Shopify allows you full credit card payment integration for a monthly fee and comes with a ton of features. Both are excellent choices for your ecommerce platform.

Additionally, both Shopify and Woocommerce are built to integrate with WordPress, which itself is a free CMS. That helps to keep costs down.

Images, Design, and Words

Maybe you are a master web designer, can provide word class photographs for your site, and can also write the perfect words to make everything pop. Then again, maybe you lack one or all of those skills. If that’s the case, it might be well worth getting some help in one or all of those categories. It is really tough to sell off a site that doesn’t look professional.

Product Cost

There are a couple of types of products that you can sell, inexhaustible and exhaustible resources. 

Exhaustible resources are used up when they are purchased by someone. For example, if you are selling photographs or paintings, the cost here is the actual cost of the materials which you are turning into the good that you are selling (your time and energy are another thing, which are discussed below). If you are selling rings or t-shirts, then those things have a cost to produce. You will have to pay for product end over end, but specifically you will have to pay for product out of your own pocket before your business is profitable.

 

On the other hand, you might be selling an inexhaustible resource. That would be something like a PDF book, an online class, or a subscription to content that you are producing. You can infinitely reproduce those things without incurring any (realistic) additional costs to yourself. It doesn’t cost you more to produce a PDF in any meaningful way if 10 people buy it than if only 1 person buys it. You make 10 times as much though!

Included in product cost would be incidental fees and any shipping costs, if it is a physical good which must be delivered.

Time and Energy

One of the big things that economists talk about, that has shifted into pop culture, is opportunity cost. Opportunity cost is operative in the background of whatever we are doing. The opportunity cost of going to the gym is not working an extra hour, not making that more elaborate dinner, and not spending that time with a friend. It’s difficult, because there are always, at any given time, more things that we are choosing not to do than things that we are doing. 

That means that even things that you aren’t burning dollar bills on technically have a cost to them. Your time and energy have costs as well. Here are the ways that you can expect building an online store to “cost” you time and energy:

Research

There are roughly three stages to starting a website. If you’re reading this post, you might very well be in the first one–research! You’re checking out whether or not starting an online store is a good option for you. You could be researching the number of giant pandas left in the world or how much potassium is in a banana versus an apple.

Development

If you know what you’re doing, you could get an ecommerce store up and running in just a day. But tweaking it over time will take tons and tons of hours.

Maintenance

If things are successful, how much time does it take you to process payments? Will you have to ship goods or do you have an online delivery system that handles payments and content without time on your part? Will you have to post on social media and blogs? How much time do you want to spend on the site?