How Much Does An eCommerce Website Cost in 2020?
If you are thinking about setting up your own online store, you are probably wondering about how much it will all cost.
While there are always costs involved, ecommerce features a wide spectrum of opportunity when it comes to pricing.
This essentially means that you can start with as little or as much as you wish, and still succeed.
Recently, ecommerce has become accessible to entrepreneurs with a variety of different budgets, and this is very clear for anyone setting out on this journey.
It is important to understand the costs involved in each part of the process when starting with an ecommerce website, and most importantly - making sure it fits with your own personal budget while keeping in mind that you will need to eventually dedicate funds to marketing once the website is live.
Keep reading to learn the main costs associated with setting up a store before exploring the different options available.
Every website needs hosting. After you buy a domain name for your online store, you will need a place for it to “live” on the internet.
Hosting is like storage, using rented space on a web server and then delivering your files to a browser the moment someone types in your domain name.
It is essentially what makes your website available through the world wide web.
Choosing a service is extremely important for ecommerce given these are considered a database intensive site.
Prices can vary greatly depending on the size of your website and the added features you are seeking, but there are great entry points for entrepreneurs of all sizes and budgets.
Generally, there are two options when it comes to hosting for ecommerce:
- Self hosted website (for example, WooCommerce)
- Saas hosting (for example, Shopify)
The first option means that you host the website yourself, while the second option does not require you to host your website or even manage it.
The second option is certainly the more convenient choice and much easier for beginners with limited technical expertise, but hosting your own website does give you more flexibility, ownership and control over your domain and website.
Understanding the differences in price between these two options will give you a clear understanding of prices overall.
Shopify hosting costs start from $29 a month, while self-hosting costs (WooCommerce) start from as little as $5 per month, but you will need to purchase an SSL certificate, domain, and other elements separately. This can come to around $12 total a month.
Every online store will have a payment processing company attached so customers can transact.
A classic example is PayPal.
The costs of these are structured as a percentage of each transaction that is made through your ecommerce store, and typically it costs around 2.90%, plus $0.30 for larger transactions.
Some processing companies will also charge a monthly fee. Using Shopify, the rate is also 2.90%, but you will have to pay an additional 2.00% if you choose an external payment gateway. This can bring the total cost to almost 5.00% which is quite expensive and can cut into profit margins significantly.
Many of those who start online stores are not web designers. Luckily, there are many predesigned templates that anyone can use, even with no design experience. When it comes to WooCommerce, there are excellent templates for free, and others which cost as little as $30.
Hiring a web designer will cost you varying rates per hour, but one thing is for certain: it is not cheap. You are looking at $5,000-$30,000 for custom design development. When it comes to Shopify, there are also ready-made free templates with some customization options. There are paid themes too, and these start at $160.
Based on the above, the self-hosted option (WooCommerce in our example) would cost around $500-$3,000 to set up, and as high as $10,000 if you go for dedicated hosting servers, custom design, and many plug-ins.
With Shopify, it will cost $1,000 to set up at the very least, but you will have everything you need built-in, with no extra costs besides the payment processor.
Do pay attention that with Shopify, the payment is monthly, and when you have large volumes of sales and transactions, the fees will increase dramatically if you are using external payment gateways in addition to Shopify
|Hosting||Payment Processing||Web Design||SEO|
|WooCommerce||From $5 per month, but SSL certificate and domain need to be purchased separately||2.90% for each transaction plus $0.03 per transaction over $10 (PayPal)||Starting from $0, paid themes starting at $30||$1,000 - $10,000 a month|
|Shopify||from $29 a month||2.90% for each transaction plus $0.30 per transaction + 2.00% for using third-party gateways|
Starting from $0, themes starting at $160
|$2,000 - $10,000 a month|
Add-ons, Extensions, And Plugins
The very final factor that will determine your overall cost is the elements you choose to add to your finished online store for enhancing functionality.
There are endless possibilities when it comes to add-ons, and the prices vary wildly. Seeing as WooCommerce runs on top of Wordpress, anyone using it will have access to over 55,000 plugins.
Many of these are free, while others cost anywhere from $19 to $300.
Shopify too has hundreds of apps available, both free and paid, with the option to get custom apps integrated using an API.
These plugins and apps are “optional” and are not part of the core functionality of any site, but they can enhance the performance of your website greatly, so we recommend that any website chooses a few of these.
Be careful not to add too many, as this can result in slower website performance.
Now that the website is up, the next step is to promote your brand and build awareness. For customers to buy from your store, they need to know it exists first. The only way to do this is marketing. There are endless ways to market your online store depending on the products, the target audience, and the price point.
You can opt for ads in social media, PPC campaigns on Google, or making affiliate deals. Marketing costs can vary widely depending on the method and scope chosen, but the good news is, there are many creative ways to drive free traffic such as starting a blog alongside your store.
As far as SEO goes, you can expect to pay $50-$250 per hour on average, and $150-$300 per hour for US-based companies. This can amount to anywhere from $1,000 to $10,000 per month, depending on the scope of work needed and your goals.
A good SEO agency will review all aspects of your site including content, images, metadata and more to maximize your ranking and searchability. If you are just starting out, you can expect to pay more as opposed to longer-standing companies that have some organic traffic and reach.
Just like there will be no two websites exactly alike, pricing too can vary quite significantly based on the various elements and choices made while creating your website.
There is no doubt that Shopify comes with a high level of convenience, especially for beginners without tech experience, but it is not the cost-effective way to build an ecommerce website.
WooCommerce on the other hand is more cost effective, but there is some technical knowhow needed, as well as the ability to purchase all elements separately.
If you are starting a blog alongside your store, want access to endless plugins and flexibility, and/or you have technical knowledge in this field, go for WooCommerce.
If you are a beginner, with no technical knowledge in this field, and do not plan to use a third-party gateway, the most sensible choice would likely be Shopify.