ECOMMERCE DESIGN

What are the costs associated with building an online e-store/shop?

Are you finding it difficult to work out what sort of budget to have in place when you’re planning to build a simple online store? If so, there’s good news. This article aims to set out a simple cost guide to help you plan your own e-commerce website.

We will cover how to determine what you will need for your particular website as this affects the costs involved. We will discuss whether to customise your website or go for an off the shelf option, highlighting some of the chief advantages of each option. Next, we will go on to talk about some of the additional costs involved which you may not have accounted for. Finally, we will go over any other considerations you may not have thought about before coming up with a budget, including being aware of any Software as a Service (SaaS) restrictions on platforms which may end up costing you a lot more than a seemingly cheap plan would suggest. 

Let’s dive in and find out more. 

Determine your needs

There are two questions you should try to answer before setting out a budget for creating your e-commerce website. What are your sales targets and traffic goals and what are some of the custom features your website will need? To answer the question about sales targets you have to have some idea of how many products you wish to sell and whether you are selling exclusively to the UK market or also internationally.

In order to decide how many products you want to sell you will need to know who your target market is and how much profit you aim to make per unit sold. Most platforms charge you fees based on the number of units or products you list. This means you must take associated costs into account when deciding the number of products you want to list. You will also have to bear in mind what you can reasonably expect to sustain. Obviously, if you try to list too many products it may turn out to be too much for you to manage.  If you choose to take advantage of the access to many international markets which setting up an e-commerce website affords, you should be prepared to face additional costs. This is because prices are typically higher in international markets. You will need to make sure your prices were still competitive in the UK market so as not to put off potential buyers. When selling to a foreign market you may also have to pay higher or different taxes, depending on the market you plan to sell into. There may also be high shipping costs involved when selling internationally.

Another aspect you will have to think about when deciding what your website will need is how regularly you plan to update it and the costs involved in doing so.  In general, it is much more affordable to design your online shop in a way that allows you to make ongoing improvements and updates to keep in line with your changing business goals. So, if you are unable to dedicate the considerable resources and money required to do a full website rebuild every so often, then hiring a team to help you develop your website over time is a much more cost-effective way to keep your website up-to-date. This method also has the added benefit of driving more traffic to your online store. Research has indicated that by employing a growth-driven design you can increase revenue gained from your site by about 11%. You will also need to keep the cost of updating the products themselves in mind.

Do you need to hire a product photographer or do you have photos you can use from your supplier?  A good professional product photographer could cost anywhere from about £160 to £450. Costs vary depending on the length of the shoot and the amount of setup needed. If you can use images provided by your supplier, then great. If not, you’ll need to have room in your budget for these costs. Similarly, you will need to decide whether you need to hire a designer to handle the design of your logo and all your branding elements. If you have all of this prepared before setting up your e-commerce site it will cost you a little less. One final thing you need to consider is whether it is necessary to hire a copywriter to write product description or any other written copy for your site.  If you have an idea of what each of these services is likely to cost when planning your website, you are much less likely to be taken unawares by the number of costs involved in creating an excellent e-commerce website for your small business.

Off the shelf or custom?

Once you have decided what you need from your website, it’s time to decide whether to take an off the shelf or custom approach to building your site. Here are some of the main advantages and disadvantages of each approach.

Custom

Custom solutions are tailored to your needs and thus offer you great flexibility if you have a particular vision of how you want to present your products. This means you won’t find yourself paying for something you don’t use, as often happens with off the shelf options. You also won’t have to compromise in order to fit your business into an existing solution.  

Custom software has the benefit of being more secure than commercial open source solutions. In addition, you and your team will be the only people who have access to your code which makes your site less vulnerable.

Of course, without prior knowledge of what your customers have come to expect when buying products online and some technical experience of how to write code, you will need to hire a web development team. This is because having complete control over the end user interface (UI) sometimes leads to very nonsensical design ideas if you don’t have a design and development team on-board.

In consequence, a custom approach requires more time and money to get started than if you opted for an off the shelf solution. It can be a very high cost option.  However, custom websites are generally easier to maintain and update than off the shelf solutions. The more customisations you make to an off the shelf solution, the harder it will be to update the site without breaking it. If you have the money available as well as the requisite experience, this may be the option for you.  

Take account of your business needs when making your selection as completely bespoke setups are normally the reserve of larger businesses and enterprises that are at an advanced stage of their business journey. Remember that with the progress being made with easy to use platforms, of the shelf options may make more sense for you when you are just starting out.  Many of the platforms now available, like SimpleShop, are very easy to use, beautifully designed and have a number of tried and tested pre-set themes you can use. Also, platforms like SimpleShop have a lot of peripheral infrastructure built-in so you don’t have to cope with the high costs, steep learning curve and the time commitment needed to get things up and running using a custom approach.

Off the shelf

In the past 5 years, off the shelf options, which typically fall into the category of Software as a Service solutions (SaaS) have improved immensely. Website builders let users create websites without having to design layouts or write code. They are, therefore, easy to use. Off the shelf options have better themes available at a lower upfront cost than would be the case if you chose to design a bespoke e-store or website. Whilst website builders typically have less flexibility than bespoke options, content management systems can be very flexible and offer loads of choice, like choosing from dozens or even hundreds of themes, as can site builders designed specifically to create an e-store, as is the case with SimpleShop.

If you use an off the shelf solution you will presented with a wider range of integrations to choose from. You can easily add payment gateway software which includes analytics. E-commerce platforms usually already include features for payment analytics. One of the most popular payment gateways is PayPal. Some of the best rated payment analytics software include ProfitWell Metrics, which helps drive better monetisation and customer insights, and Databox which lets you keep an eye on progress towards your goals and spot tends in your business’s performance so you can track the growth of your brand.

By taking an off the shelf approach to designing an e-store you will have the benefit of tried and tested navigation, categorisation, shopping cart experiences, prompts and product pages. You also have the advantage of the stability and predictability such platforms offer, which will make it easier for you to devise a marketing strategy. In addition, a SaaS solution operates automatically 24/7 so you can pick up new customers at any time of day. Off the shelf solutions are also, for the most part, compatible across multiply devices, allowing for ease of access.

Ultimately, you will need to look at the options in relation to your business goals in order to find the approach that is best suited to you.

Additional costs you may not have considered

There may be hosting costs to take into account if you choose a completely custom option. Whist SaaS solutions usually come with hosting taken care of, this is not the case with a custom approach. Hosting fees depend on the amount of traffic you attract to your site, or the amount of traffic you can expect to get. To give you a rough estimation of hosting costs, you could expect to be charged anything from £150 to £250 annually. Hosting costs typically increase as your business grows and develops.

Another potential expense you may have overlooked is the cost of purchasing an SSL certificate to give customers confidence in your website and make it more secure. Having an SSL certificate gives you an https prefix in your website address in addition to a padlock icon which helps reassure visitors that your site is secure. In short, having an SSL certificate helps you build trust with your customers, making people more likely to buy your products. It also allows you to process personal and credit card information securely. There are some free options available, like LetsEncrypt, for example. However, SSL certificates can cost anywhere from £7 to £130 a year or more depending on which type of certificate you need. You will receive different icons displayed in the address bar depending on the level of certification you purchase.

As mentioned above, the importance of product photography for your e-store can’t be overstated. It influences 93% of buying decisions so it’s essential you get it right. You need to ensure that you have imagines of your products from 6 to 12 different angles on a white background so that they stand out. You will also need photos taken showing the product in context. This means showing it in use, or producing imagines which convey how it will fit into someone’s lifestyle. If your supplier has not provided you with images to use, you will need to budget for ‘white label’ photography. You can learn to do it yourself given the time, but you will still need to budget for any equipment or setup that’s necessary.

Other considerations

When planning the budget for setting up your e-commerce site, you need to remember that some SaaS have restrictions in place which may cause costs to snowball if you’re not careful. Some sites place a limit on the number of products you can list, or cap the volume of sales you can make per year, as is the case with Volusion. Other platforms may have bandwidth limitations and will charge you a monthly a fee which varies depending on how much you exceed the limit by. You will also need to check the Search Engine Optimisation (SEO) features and plug-ins that are included in the package or platform you opt for. It is vital to ensure your site is optimised for mobile users.

One of the things that makes SimpleShop a great option is the fact that it has no restrictions, meaning you can set up a professional-looking, beautifully designed e-shop easily without the fear of encountering any hidden costs further down the road.

Conclusion

We hope that this simple cost guide to building an e-commerce site has given you all you need to enable you to plan a budget for your site with confidence. By enumerating all the costs usually involved, whether you choose to create a bespoke website or use an off the shelf option, you should now be able to take the next steps in your business without fear of coming across lots of unexpected expenses. Be sure to check out SimpleShop today to get your business off to a fabulous start.