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The Real Cost of eCommerce Websites

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You’re ready to sell online but you need a way to do that. Do hire someone, do-it-yourself, what will it cost, what is the best option?

Do a Google search for “ecommerce website” or “hosted ecommerce websites” or “WordPress ecommerce” and you’ll find a bunch of solutions, but which one is right for you?

When a client ask me about selling products on their website I have a simple evaluation process to help determine the best solution for them. It’s all based on the “real cost of an ecommerce websites”.

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My Evaluation Process

First, the solutions.

I only consider two, self-hosted WooCommerce or Shopify.

Second, I evaluate the necessary elements.

  • SSL Certificate
  • Security
  • Order Processing
  • Shipping Needs
  • Order Management (customer/owner)
  • Type of Products
  • Required Licenses (WooCommerce addons)
  • Sales Channels
  • Hosting (reliable options only)

I’ll go into details on each of these things as I start to break down the actual cost of doing business online.

The Solutions

Let’s start with Self-hosted WooCommerce.

This is a WordPress plugin that is completely free. Once added to your WordPress site, you’ll have the ability to setup a store and offer products.

If you just have the basic needs, no advanced product options, no complex shipping or tax requirements, and you don’t mind using Stripe.com for payment processing you won’t need to pay for the additional WooCommerce extensions that require annual license fees.

The Real Cost of using WooCommerce

While WordPress and Woo are free, you still have to consider the cost of hosting, themes, plugins, SSL certificates, security, merchant fees, domain name, etc.

Breaking down the costs…

Hosting: $35 to $250/mo

I am a huge fan of WP Engine for WordPress hosting, but there are other solutions like Liquidweb (offer a WooCommerce solution) and StudioPress Sites (also has a WooCommerce solution).

WordPress Theme: Free to $5000+

You can find a good WordPress theme for free, but you can find a better theme for fifty to a couple hundred per yeaer or sometimes as a one time fee if you go for a quality premium theme.

You can also have a pro build a WordPress commerce site for you, and expect to pay $1200 to $5000+ for a quality WordPress website.

Plugins: Free to $250+ per year

There are a lot of plugins you could use to help enhance your website, and as I mentioned before, if you need more advanced features that are not included in the free version of Woo, you can expect to pay $49 to $250 per feature per year for a license to add them to your site.

SSL Certificate: $49 to $300 per year

This is required for ecommerce websites. The SSL certificate is what secures the data entered, credit card numbers, etc, during checkout. You will want to have this to keep customer data safe and your site trusted.

Security: $85 to $299 per year

You don’t have to add additional website security to your site, but there are a lot of reasons you should, especial for WordPress sites and if you’re dealing with sensitive data. You can read more about website security here and here and here.

Merchant Fees: 2.9% + $.30 + per transaction

This is something you can not avoid.

There are several options for credit card processing services.  I chose to use stripe.com which takes a fee of 2.9% + $.3 of each of the transactions they process for me. There are other services that charge annual or monthly subscription fees which reduces the per transaction fee and in some cases eliminates it.

PayPal is also a very popular option for handling the processing.

Domain Name: $15+ per year

You obviously need to have a domain. This is your .com .org .net etc… that you use to get people to your website. I buy all my domains from GoDaddy, mainly because I know they make no money from a domain registration.

Let’s add it up!

Your self-hosted WooCommerce solution could really cost anywhere from $1200 to $3500 per year. Possibly even more.

Now putting that in perspective, there is always a cost associated with doing business.

If your online store can generate $1200 per month, your P&L will look great!

The Solution … Part 2

Moving on to Shopify.

Now Shopify is what I’d refer to as a hosted commerce solution. Which means, you won’t have to gather all the pieces and figure out how to make them work.

You simply subscribe, build, and launch.

You pay one fee, which is determined by your needs, and you could have customers shopping online in hours.

The real cost of using Shopify.

Shopify only has a couple pricing options. However there are a couple other “upgrades” you could add to increase the cost of using the platform.

Shopify Platform Subscription: $9.99 to $250+

The standard cost for using Shopify is $29 per month. That will give you the ability to use all their sales channels, online store, Facebook shop, Facebook Messenger, Point of Sale (mobile app + card reader), and Buy Buttons (add to your own website).

Plus you get to take advantage of already configure sales tax, shipping calculations, reports, label printing, unlimited products, and much more.

Shopify Themes: Free to $180

You can use a variety of free themes that can be customize, or, purchase a theme from the theme marketplace that is already designed nicely and built out to support the sales of your products.

The lowest price I could find for a paid theme was $140, and while these price might seem high, you’ve got to do a comparison. If you hired someone to build you a Shopify store with a custom theme you could spend $1200 to $5000+. So to be able to do it your self for $29/mo plus $180, really isn’t bad at all.

Shopify Apps: Free to $129/mo

Apps are like WooCommerce Extensions. Add-ons, that give you more features or done for you configurations.

Like more advanced already configured sales tax, and already configure shipping cost and calculations for USPS.

But there are also apps that give you the ability to connect with other services like print on demand. So if you’re going to sell t-shirts, you can have your site setup to handle the sales, and use an App to connect with a printer. Some buys a shirt, the printer is notified, funds auto distributed.

There are apps for; marketing, sales, social media, inventory, accounting, reporting, customer service, and several other categories.

Shopify Hardware: Free to $800

If you have a physical location, a store, or you take orders in person, great if you do a trade show and want to sell your inventory in person, Shopify has a couple different point of sales (POS) hardware options.

They have their free card reader that is simply used with the free mobile app. I would use this for selling things like t-shirts or jewelry or made backed goods at a market or an event where you have a booth.

But they also have full blown hardware used in stores. This is the registrar and cash drawer.

Merchant Fees: 2.9% + $.30 + per transaction

You’ll still pay these fees with Shopify.

Domain Name: $15+ per year

You’ll still want to have a customer domain so that people can easily get to your store.

Let’s add it up!

Your hosted commerce solution with Shopify could cost $363 to $2,200+ per year, just depending on how many add-ons you have.

You will have some upfront cost, $180 to $1,000 if you decide to buy a customer theme and/or purchase hardware.

But even then your first year in business is only requiring an investment of $542 to $3,200+. Which if you’re able to make good sales you could easily make back in the first month of business.

Wrap Up…

Really it comes down to cost and user experience in my opinion.

If you want to have a it all done for you and highly custom, and you have $5k+ upfront and an annual budget of $2k to spend then Woo might be the better option. However, if you want to do-it-yourself, and spend as little money as possible to get started, then use Shopify.

I’m not all in on either solution. For me it all depends on the client and their needs.

I will add one more thing. If I was just, trying out a business idea or a product concept, I’d use Shopify 100%. Low cost to entry, easy to get setup, and you can focus on spending your time and money on marketing to get the buyers to your product. And if the product/idea fails, you might have spend $350 that year for your Shopify store!

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