Starting an eCommerce business is an eminent way to get your own online store and sell your products online. Because eCommerce is the fastest growing industry in the world. The reason for this is that eCommerce has the best access to the customer, and it offers more convenience to customers.
If you are thinking about starting a new eCommerce business, then there are some important things that you need to consider before taking the plunge.
Before starting an eCommerce business, you need to be sure that you have a good idea of what you want to sell online. Suppose you don’t know what type of products or services would work well for your business. It will be hard to decide how much money you should spend on marketing and advertising your website.
Another critical factor in deciding whether or not to start an eCommerce business is whether or not there is enough demand for your product or service in the marketplace. If there isn’t enough demand for your product or service, it won’t matter how much money you spend on marketing and advertising your website because people won’t buy from it anyway!
However, starting an eCommerce by taking the right steps in order can result in remarkable success. Hence, I have curated a list of steps to successful eCommerce store development.
Steps to Start an Ecommerce Business
The big step to starting an eCommerce business is setting up a business plan. You can do this by following the steps below:
- Identify your target market and create a buyer persona.
- Determine your competition and their strengths and weaknesses
- Choose your niche and products to sell based on your research
- Establish pricing for each product, as well as shipping rates, tax rates, and return policies
- Create a marketing plan for promoting your website and products
- Develop a content strategy that will be used across all marketing channels
After all the preparation, one last thing remains to gauge, which is the budget. Though it is not easy to say how exactly it will cost you to start your business from the ground up. But, there are some factors you should know that can affect your entire eCommerce startup cost. So, let us have a bit closer look at each.
Domain Name: $0.99-$15/Year
In order to have a URL for your eCommerce store website, you will need to purchase a unique domain name. This acts as the address for your online store and is the easiest way to make a name for your online store. If you do not have a domain name, you can purchase one through a domain name registrar, such as NameCheap, Domain.com, GoDaddy, etc. —for example, www.walmart.com and www.ebay.com.
Hosting: $3.50-$250/Month ($29/Month Average)
You must have a hosting server to host your eCommerce website if you want your eCommerce store to be accessible to visitors online. A hosting plan, which acts like renting space, can be purchased and is where all your website files and data are stored. There are a few types of hosting plans: Shared hosting, VPS (virtual private server) hosting, Dedicated Hosting, and Cloud hosting.
You will need to choose a hosting plan for your eCommerce store to get started. And some of the popular eCommerce hosting platforms are:
- Shopify offer plans starting at $29/month
- BigCommerce starts at $29.95/month
- WooCommerce, which is a WordPress extension, is free to start, but you might have to pay for additional features.
Inventory: $0-$1000 To Start
The products you offer for sale on your online store can range from clothing to antiques to books to electronic devices to small appliances, and so forth. Your inventory cost will, of course, be determined by both the products and the sales method.
For example, you won’t have to physically store, pack, and ship inventory if you adopt the dropshipping model. Dropshipping is when you don’t physically own the stock, but rather, you directly ship from the wholesaler or manufacturer’s warehouse/factory.
Therefore, it will be more cost-effective for warehouse management. However, you will not have power over the inventory. On the other hand, you will have complete authority over your products when you purchase your stock. You can also create a marketplace eCommerce platform like Amazon where various sellers can sell their products.
Payment Processing: 2-3% Of Revenue
If you want to have an eCommerce website that customers actually purchase items from, you need to make sure that you have payment processing set up. Otherwise, customers will simply leave your site without buying anything.
Though online payment processing will cost you a minor fee, this fee will be added to the total cost of the order and starts at 2-3% and $0.30 per transaction. Below are the most popular payment options to consider to offer a quick and simple payment solution on your eCommerce site.
- Stripe – costs 2.9% + $0.30 per transaction;
- PayPal – costs 2.9% + $0.30 per transaction for US transactions
- Apple Pay – no additional merchant fees
- Google Pay – no set-up fee.
- Square – costs 2.9% + $0.30 per transaction
Other Useful software
Paying a monthly subscription for Software-as-a-Service to add value and ease your eCommerce business operations is much more trending rather than paying upfront to buy a software program. You may need software as per your online store. But some common software that will be meaningful to you include:
- G Suite Account (6 – $12/user/month) or Microsoft Office 365 ($12.50 – $20/user/month)
- Website Designer: $300-$3000+ or if you can design Adobe Creative Cloud, start at $33.99/user/month
- Email marketing software, such as ConvertKit (from $0 to $59/mo.) or SendX (from $7.49/mo.)
Other additional costs you may need to bear:
- Website Theme: $50-$200
- Logo Design: $15-$300
- Marketing: The Sky’s The Limit
- Warehouse: $4 To $7 Per Month Per Square Foot
- Product Photos: $20-$1000
- Apps & Plugins: $0-$200+/Month
Besides, if you don’t have expertise in operating an eCommerce business, you will need to hire the below professionals.
- eCommerce Manager
- eCommerce Analyst
- Business Manager
- Director of eCommerce
- Product Manager, eCommerce
- Web Developer
- Web Designer
When are you launching your eCommerce platform?
eCommerce startup costs have gone up over the years as eCommerce sites have risen in demand. It’s now common for eCommerce sites to require a multi-step process to process a simple online order. They often involve complex fulfillment arrangements, including inventory centers and returns centers. And, just like in any business, startup costs drive up the overall cost of doing business.
But I hope this post helps you calculate an estimated cost for your eCommerce startup as per your business idea.