Updated June 2021
While trying to drive long-term value for your customers through a world-class user experience for online shopping, you, as a business owner, may want to understand exactly how much an eCommerce website will cost in 2021.
It’s no longer a matter of whether to tap into eCommerce’s potential; it’s more about matching your internal resources with the digital transformation vision you have for your business.
With retail e-commerce sales worldwide estimated to amount to almost 5 trillion US dollars, capitalizing on the benefits of having an online shop is making its way to the top of retailers’ agenda.
While building an online channel is crucial for any organization’s competitiveness, nowadays, being aware of its costs will ensure that you have a balanced approach. If you don’t have a concise plan, you may end up spending more than your budget. Continue reading to determine your business needs and gather information to understand each area associated with ecommerce website costs.
How much does it cost to hire someone to build an eCommerce website?
Three main categories influence the cost of building an eCommerce site: the infrastructure, the ongoing operations, and the functionality and design costs. Each one of them consists of several essential components, detailed below.
Think of it as an iceberg. The infrastructure is the submerged part, the design development and functionality make up the visible part of the iceberg, and the ongoing operations is like the water that keeps it floating. Let’s take a deep dive into the factors that influence your ecommerce website development costs the most.
1. The eCommerce website infrastructure
The complexity of your eCommerce website will be a big factor that determines its technical foundation. A clear vision of your goals concerning your eCommerce capabilities will lead to choosing the right platform to support them in the long run, at a price you’re willing to pay.
- The eCommerce platform
You have two primary options for the eCommerce platform: investing in a custom developed one or purchasing a readily available SaaS solution.
With readily available off-the-shelf ecommerce software, you pay a monthly or yearly subscription for a pre-built eCommerce store that you can customize to some extent. Platforms such as Shopify, WooCommerce, and BigCommerce are either free or start at $29.99 per month and can reach $299.99/ month or more. These platforms are usually easy to set-up and manage and do not require technical knowledge compared to Magento, which is also an off-the-shelf platform that needs implementation and customization that could be in the order of tens of thousands of US dollars.
While having a predefined set of functionalities might be a no-brainer, ready-made eCommerce platforms don’t always cover all your needs, so any extensions you add to the website will mean that you incur an extra cost. That subscription fee is just a starting point.
On the other hand, you have the possibility to custom develop your eCommerce website. If scaling, driving long-term customer value, enhancing your brand, and building a strong competitive edge are among your ecommerce business goals, then creating a shop from scratch could better address your needs. Developing a custom website is more pricey than off-the-shelf solutions, ranging between $25,000to $250,000, depending very much on your requirements, the quality of the eCommerce development company you select as your implementation partner, and the engagement model.
Where you choose to host your website is an important decision to make when creating your eCommerce store because the better the hosting service, the lesser your site’s downtime and more its availability to your clients.
While most SaaS platforms have hosting services built under their monthly subscription price, they usually have limits concerning traffic, order volume, or the number of customers. Once that limit is surpassed, new fees will surge. The price could start as low as $3 /month for self-hosted websites and grow to $250/ month.
For custom-developed websites, eCommerce hosting costs start at about $350 per year and can go up to $2000+. Keeping your website secure and running smoothly is critical, so finding a reliable service is not something you want to compromise on even if it’s more pricey.
- Payment services
Although often overlooked, payment processing services hold a significant share of your eCommerce website costs.
Some off-the-shelf platforms already have integrated a payment gateway, such as Shopify, which has its payment service. In other cases, you need to choose a payment processor, such as PayPal, Stripe, or other 3rd party providers.
Whether it’s proprietary or not, these payment processing providers charge you, on average, 2.9% per transaction, plus an extra small fee, such as $0.30.
- SSL certificate
While online shopping is on the rise, customers are worried about the safety of their financial information. An SSL certificate can help you address your customers’ concerns by ensuring a secure connection that protects their data. Most hosting services have an SSL certificate included in their packages. Otherwise, it’s crucial to provide the necessary assurance to your customers that their data is secure and safe in your servers. An SSL certificate goes a long way towards that and ranges between $10 and $100, usually paid annually.
2. The design and functionality
Two factors that greatly influence an eCommerce website’s price are its visual complexity and functional capabilities.
Generally, off-the-shelf eCommerce platforms have a predefined theme library that you can choose from and launch your shop with minimal effort. Whether you use out-of-the-box design functionalities or have a web designer doing customization work to existing themes, it can cost you from zero to thousands of dollars to work with these ready-made assets. As your shop grows, you might find the need to make design updates that can offer a more engaging customer experience, gradually increasing your budget.
Custom design uses more resources, compared to out-of-the-box design, because you build it from scratch. The personalization opportunities are endless, as long as you have the right team and budget to support your effort. It could cost you from $1000 for a small business up to $100,000 for a larger company. Although there’s a significant initial investment involved and a slower time-to-market, it’s important to factor the benefits of relying on design capabilities that can offer a unique customer experience that locks-in customers and drives long-term revenue growth.
Platform add-ons, plugins, and extensions also make up a significant chunk of the eCommerce website development cost. Whether it’s a newsletter app, analytics tool, an inventory solution, or a payment gateway, the integration of 3rd party applications will add to your overall cost, regardless of the type of platform you choose. SaaS platforms usually offer a repository of add-ons that can be easily integrated into the website. They are either free or can go up to $300 per plugin. But, if the platform does not cover all the functionalities you require, hiring a custom designer to create a new plugin for your shop could quickly add up to tens of thousands of dollars.
Having a long-term eCommerce strategy in mind can help you determine early on whether off-the-shelf solutions or custom design can better match your vision and, ultimately, your budget.
3. Ongoing operations
Developing and designing your eCommerce platform is not the end of the project. Now that you have it ready, the online shop needs to be properly maintained and marketed.
Maintenance and support will ensure your shop runs smoothly and that you’re timely in your response to bugs and errors that might disrupt the customer experience. While for off-the-shelf platforms, the maintenance is built into the subscription price, for custom development, support could start with as little as $500+ monthly. The difference between the two options is that you depend on your provider’s support schedule and your subscription plan with a SaaS platform. In contrast, custom software development gives you control over the type and frequency of the support you need.
Businesses also need to consider the marketing strategy when they plan an eCommerce website development budget. How much you invest in promoting and proofing your website with marketing capabilities is up to you, be it $200/month or $20,000/month. Whether it’s content marketing, SEO, or paid advertising, it’s important to acknowledge that every action related to enhancing the e-commerce shop’s functionality should be included in the total cost of ownership.
The cost of building an eCommerce website greatly depends on your business needs and the complexity of your requirements. While you can have an estimate in mind, expenses can fluctuate due to the eCommerce landscape’s dynamic nature.
A coherent long-term eCommerce strategy combined with a flexible approach is the key attribute of an eCommerce shop that successfully balances a customer-first digital approach with a cost-effective long-term strategy.
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