You’ve decided to set your online store on the Magento platform. Great! What’s next?
Apart from having to deal with the setup, product uploads and design, you’ll also need to calculate the cost of having a store on Magento. There are several variables that will have to be examined.
You’ll need to account for the Magento license (if you’re not using the free version), design, development costs, hosting, operational costs and others.
Free or Commerce Edition Magento
For a start, the cost of having a Magento online store will depend on the Magento platform that you choose. More information about the different Magento eCommerce products is available here.
Magento open source (the free version) gives you access to integrated checkout, payment and shipping; mobile optimized shopping; global selling; catalog management; extended functionality via the app marketplace; instant purchases and site search.
Magento Commerce has all of these plus a business intelligence dashboard, B2B functionalities, advanced marketing tools, content management tools, customer loyalty programs, WYSIWYG page builder, visual merchandising and Magento cloud hosting.
Thus, if you opt for Magento Commerce, you’ll be free from having to pay for a hosting solution. The cost of Magento Commerce depends on your gross sales revenue. Licenses start at 22,000 dollars per year, which can be quite expensive for eCommerce newbies. If you don’t need the advanced features, choose the open-source version and pay for hosting. That approach will make a lot more sense.
Hosting and Domain Name Registration
If you choose the free Magento platform, you’ll need to sort things out and get your own hosting plan. There are numerous hosting packages out there, some starting at as little as two dollars per month.
Such packages are usually available for a shared hosting service. This one will give you access to limited resources and limited security functionalities. Shared hosting isn’t a great choice for larger projects and online shops bound to grow quickly. Virtual private server (VPS) and cloud server hosting packages are more flexible, more scalable and much more secure.
You will discover such hosting plans for as little as six to seven dollars per month. In some instances, hosting service providers will throw in additional perks to lure new clients.
These may include free domain registration for a one-year period and a free SSL certificate. If you come across such a package, you’ll be reducing the expenses linked to setting up your Magento store.
Here are hosting solutions that we recommend.
Website Design, Development and Customization
When considering the cost of running a Magento store, you’ll have to calculate the expenses linked to making your website look good and function flawlessly. Those who can handle template customization or web design on their own will have it easy. If you’re not one of these lucky individuals, you can still explore a couple of cost-efficient options.
A Magento theme that looks good and that doesn’t need any customization will cost you up to 200 dollars. Next, you will have to hire a professional if you want to adjust and personalize the theme.
Freelancers are the designers and developers that offer the most competitive rates. Depending on your budget and the country that a freelancer comes from, you can hire a web developer from anywhere between 10 and 50 dollars per hour. More experienced developers working in Western countries charge 100 dollars per hour and even more. It’s up to you to set the limit on how high you’re willing to go.
Web development agencies are another option. They will usually charge per project and the cost depends on the complexity of the work that needs to be done/extent of the customization. The best approach would be to ask for quotes from multiple service providers. Comparing quotes side by side will simplify the process of identifying the right price to quality ratio.
While the above-mentioned are some of the major expenses linked to operating a Magento eCommerce website, there are several other kinds of expenditures you should plan for during the first year of your project’s operation.
Digital marketing is an absolute essential to attract clients to your store. Luckily, online marketing campaigns are a lot cheaper than traditional forms of advertising. Spending anywhere between 500 and 1,000 dollars on social media marketing, Google promotion and pay per click campaigns will give you excellent results.
Content Creation and SEO
Google will make or break your Magento website. You need to have your website featured among the top search engine results for keywords of preference. Creating quality content and getting it optimized is one of the SEO pillars. If you don’t know how to make it happen or you don’t have the time, outsourcing to a freelance copywriter may be the best idea. The cost of assistance is going to be similar to the cost of hiring a website developer.
Expanding the basic functionalities of your store depends on choosing the right extensions. Some Magento extensions are available free of charge. For others, the cost comes in the range from 40 to 200 dollars. There are more expensive add-ons but chances are you wouldn’t need such extensions to make your website work great.
While you may be free from additional expenses in the beginning, these could pile up as your Magento store grows. When the number of customers goes up, you will need to hire a customer support or sales management professional as a part of the team.
Outsourcing essentials like accounting and bookkeeping will also give you more time to focus on the strategic growth of your eCommerce business. There will be some additional expenses like shipping charges, the cost of processing payment and the cost of setting up a corporate bank account. Being prepared for such costs will give you smooth operations over the first years of your store’s existence. It’s much better to be over-prepared and to save some money than to fail planning for all costs and to experience financial strains when setting up your eCommerce website.