The Actual costs of starting an Internet Shop

“Opportunity is missed by most people because it is dressed in overalls and looks like work.” — Thomas Edison

Although there are lots of ways to find an ecommerce shop off the ground, among the most common solutions is to use one of the numerous popular web-based software-as-a-service solutions like Volusion, Magento, Shopify, Bigcommerce, and 3dcart.

There are many benefits of pursuing this approach, including the fact that you receive the attention and help of an experienced support group, a range of integrated tools that will assist you enhance your sales and promotion, and the assurance of knowing that you are using a system that’s also used by thousands of different merchants.

Newcomers to the world of online retail, though, can still experience some pricey surprises. Virtually all the main providers of ecommerce platforms make a big deal in their advertising presentations out of the comparatively low monthly costs of the services, the detailed nature of the offerings, and the ease of installation when using their systems. Often the presentation makes it seem as if you can get everything you could possibly want or need for under $100 a month.

Is that true? In my experience, it actually isn’t. This is not to say that the real costs are incredibly high. But they’re often substantial and continuing, and make the actual costs of having an internet store much higher than advertised.

Design Costs

Virtually all the main vendors of SaaS — software-as-a-service — ecommerce solutions make a huge deal out of the numerous web store design templates which they make available for free with a paid subscription. Often these are presented in the form of a layout gallery which features the templates on the job in the shape of the primary pages of hypothetical stores.

It is tempting to look at these templates and get excited about them imagining that your shop will look as good right from the gate and without much extra work or cost.

It won’t. Every shop template is a combination of many, many components and to look great as a whole those components will need to work together. Elements such as logo design, product photography, banner design, typography, background and frame colour, button layout, navigational structure, and a lot of other choices impact each other.

The reality is that I have never seen a really terrific web store layout that was completely fabricated out-of-the-box with all the raw materials from a stock template. And actually even buying a premium template just helps a bit; often you’re back to needing the support of a designer and photographer to find the finished look that you are after.

The companies that provide the tools can also help you with layout — for a cost. And frequently there’s also a community of independent designers that can be hired to help you in getting a finished and professional look. But this will cost you extra money and require more time than you may have predicted.

You will discover that this is a continuing cost, also. Even a excellent design will be something which you’ll want to”freshen up” from time to time. As you become more familiar with the store’s HTML structure and page connection you can do some of the work yourself for free, however you’ll often need to hire an external design professional to perform sections of the job for you.

SSL Certificates

So as to take part in the encrypted and secure transport of information between computers over the web, it’s crucial that you make an extra investment in buying and then renewing a valid SSL certificate from a reputable and established vendor such as Norton or GeoTrust.

All the significant ecommerce system suppliers offer a free, shared SSL for their customers, but you are soon going to need to ditch that solution for a paid upgrade to a personal SSL which you control.

The reason is that the free version will direct your customers to a URL that’s somewhat different from your primary web store URL. In the event of 3dcart, by way of instance, if your web store’s URL were Ajax-systems. Com, then the common URL for secure transactions are Ajax-systems.3dcartstores.com. Although this may not seem like such a big deal, it can be a confidence-killer for a particular part of your website visitors.

Upgraded private SSL’s have other benefits, too, including extended validation and visual cues which transaction is protected, which may boost conversions.

How much does this cost? You can expect to pay anywhere between $100 and $1,000 annually to satisfy your continuing site security needs.

Payment Providers, Merchant Processing Costs

Not only is there the problem of site safety, but there’s also the related issue of being able to accept and process credit cards. Setting up your payment solution differs from simply setting up a web store, and it’s something which has to be thought about carefully.

At a minimum, you can (and should) offer solutions like PayPal and Checkout From Amazon. PayPal specifically is easy to prepare and the integration with your new web store will be almost effortless.

But if you would like to extend on your ability to accept payments from customers by accepting credit cards directly, you are going to need to add your own fully integrated merchant account, such as a payment gateway.

Setting up an account is not hard, but it also is not simple and automatic, and it begins with completing an application and going through an evaluation period. Expect this process to take at least a couple of days, and it may include a telephone interview or maybe a site visit.

You may expect to pay ongoing fees associated with credit card processing each time a customer makes a payment, and you are going to cover those very same sorts of penalties when using PayPal or Checkout from Amazon, also. But there are additional fees you can expect to pay, such as monthly use fees and setup fees which aren’t about the amount of money you process through the account. You can expect those monthly charges to be anywhere between $30 and $100, and transaction fees of between 1.8 and 3%, based on a selection of factors.

Bandwidth — The Hidden Cost of Success

This one may really sneak up on you. Software-as-a-Service suppliers are selling bandwidth as much as they’re selling everything else. In actuality, after you escape the first few pricing tiers in most ecommerce programs, the one thing which you’re paying more to get is extra bandwidth.

With a small company just starting out, 5 GB to 10 GB of bandwidth will be just fine. You are not going to have so much traffic that this will present much of a problem for you or your internet store. However, as you grow you will discover that bandwidth is something which you’re considering all of the time. You never seem to have enough of it.

How big a deal is that? Think about the fact that Volusion’s Pro Plan offers 10 GB of data and costs $75/month. The Premium Plan, then, provides 35 GB of data but costs $135/month. Once your internet store gets going, you’ll see it is in fact quite easy to need over 10 GB of bandwidth to satisfy your ongoing needs.

The day that happens your subscription fees will jump by $60 a month as you change from the Guru Plan to the Premium Plan. That is an 80 percent cost increase based only on increasing bandwidth requirements.

In my web store, Stardust Memorials, we use over 100 GB of bandwidth per month, every month, and I am on an enterprise-level program with 3dcart. We are getting close to having to update yet again to another service level due to nothing besides our increasing bandwidth requirements.

We are currently paying a few hundred dollars every month for our strategy. When we started out we were paying around $35 a month for our services. The majority of these increases were due to nothing more than continuing and increasing bandwidth needs.

Other

We cover lots of different things, also, on a monthly basis. Sometimes we pay for services which are included in our ecommerce package, but for one reason or another, we prefer the model that we may get from an external vendor.

By way of instance, 3dcart provides a newsletter-marketing tool, integrated email tools, CRM tools, live chat tools, order-processing tools, and a variant of a product feed management system. They are not poor tools, and may work good for you and fulfill your requirements well.

In our case, we’ve discovered that we prefer to use external solutions in each case. In the event of newsletter marketing, we favor Constant Contact. In the case of email, we prefer Gmail. In the case of live chat, we favor Olark. In the case of a CRM, we favor Freshdesk. In the event of order management, we favor ShipStation. In the event of handling product feeds, we favor GoDataFeed.

With the exception of Gmail, there’s a monthly cost associated with each of those tools. And even Google Apps for Business has a cost associated with it, if you would like to go down that street. None of the fees are extremely high, but they also add a couple of hundred dollars each month.

Conclusion

The cost of owning and operating a successful web shop is significantly more than simply taking a free trial and then paying $30 per month for a service bundle. It is important to consider when you’re starting out down the long road to making your ecommerce dynasty. The fantastic thing is that, if you are successful, the costs are much lower than they would be if you spent in a standard retail storefront in your own hometown. But they’re actual costs, nonetheless.

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