Ecommerce Web Design Blog

What costs do you need to consider when opening an online store? What should a shopping cart website cost? We often get asked this question, so here is a quick guide.

When you are setting up an online store you will usually have to balance up-front costs, the ongoing costs and most importantly the costs of your time. Plus your regular business expenses.

One factor that will significantly influence what your overall costs are and where they are spent is whether you are buying shopping cart software outright and managing it yourself on a hosting plan, or whether you are paying for a hosted solution on a monthly basis.

Do it yourself (DIY) ecommerce websites like free carts:

• Have a low up-front cost as you usually do not have to buy an up-front license. 
• Require a lot of hands-on time to manage. First you have to find a hosting provider that is compatible, install the software yourself, configure all of the options you want (often having to choose from many different or similar variations), apply security patches as they are required yourself and fix bugs. 
• Usually require a strong level of technical expertise to deal with problems when things go wrong and you are left searching the forums of the various components that make up your software looking for other people who have encountered those problems and the required solutions. What if you have a unique combination of components or a never-seen-before problem? What if your hosting provider makes a server change that affects the performance of your site? Your customers won't be as tolerant as you are of issues.
• If you wish to customise the design of your store, you will either need graphic design skills or need to pay a freelance designer by the hour. This could cost up to $200 or more if you are making considerable changes.
• Put you at the mercy of third party developers to develop security fixes, add-ons, bug fixes and new versions of your software. You may need to pay for security and bug fixes yourself if they are not publicly available. Would you know how to remove a cross-site-scripting vulnerability if it was in your store software?
• Your hosting provider will charge you a monthly fee
• If you are using a security scanner for PCI compliance you will need to pay a third-party to scan your website for vulnerabilities and certify you for your bank.  This can cost $500+. Daily scanning through highly recognised security providers like McAfee Secure can cost upwards of $1,300US per annum.

 Hosted ecommerce solutions:

• Have a setup cost and monthly fee. These range considerably as the top ecommerce solutions have one-off setup costs of between approx $100-$700  and monthly fees of between $30-$300 per month. At Osc Works, we understand the costs of setting your online business can be considerable so we offer a setup costs of $199-$399 for our ecommerce packages (depending on the level of features you have). But since every business is different, we also offer three affordable ozCart ecommerce packages to reflect varying levels of features that you may need. At time of writing, these range in price from $34.95 to $49.95 to $109.95 per month (incl gst).
• Provide you support for your ecommerce website. When you have errors in store, can't find something, or what to know what's possible, help is at hand. You can also request custom development.
• Take care of server management, security and performance issues without your intervention.  You'll know that the ecommerce solution you are running works on that server because the server is optimised for it and monitored. You won't be paying per hour costs for security patches to the server.
• Give you an ecommerce provider at-hand to ask for help and tips, upgrades provide additional information about payment gateways and additional services like Marketing and SEO .
  

If you are accepting credit cards and looking to gain PCI compliance, hosted solutions will generally be more convenient to you, less time consuming and possibly cheaper too.

 What are the other costs?

On top of the costs of setting up your website and managing it, you should also consider the following when running an online shop:

• A domain name - Australian domain names are $37.95 for two years when purchased from Osc Works. Other companies have different .com.au domain name prices.  If you already have a domain name you may wish to transfer it, or keep it with your current provider and 'point' it at the server your ecommerce provider is using
• Merchant, gateway or Paypal costs (if you are accepting credit cards) - the payment provider you use will charge fees to accept credit cards regardless of who you use. Live transaction processing through your store will mean you will need to sign up with a payment gateway provider like eWay or Camtech as well as a merchant account at a bank. Alternatively, live processing through Paypal or Paymate will require an account through these providers. Each have their own fee structures.
• Business expenses - GST, income tax, business registration (e.g. ABN or company) and other business costs
• Production and Stock costs - you will usually on charge these to your customers
• Shipping costs - you will usually on charge these to your customers. If you dropship your cost structure will be different than if you hold stock and send it out as orders are received.
• Storage costs - if you have a warehouse or storage facility for your stock, you will need to take into account these costs too.
• SSL Encryption - if you are accepting credit cards directly in your store you will need to purchase a SSL Certificate for your store from a recognised third party provider to enable your store to process orders securely.

Running your own affiliate programme can gain you qualified customers by taking advantage of one of the most powerful forms of marketing: referrals.

Affiliate programmes work by paying out commissions to registered affiliates who place banners on their websites that generate click-throughs to your website and subsequent sales. They are an easy way for both you and your affiliates to make money.

These programmes are big business, and there are a number of well-known affiliate providers operating in Australia and throughout the world. Some of the more well known ones include clixGalore, iDev Affiliate and Commission Junction.

One big benefit to these programmes is independence - merchants cannot under-report or fail to pay commissions. But there is a big disadvantage too: fees. Many well-known affiliate programmes charge considerable fees to the merchants that belong to them, sometimes even taking a cut of the sales they make (on top of the commission payments those merchants are paying their affiliates). This means that running your own affiliate progamme without using a third party provider could cut back on your spending considerably, while providing all of the traffic generating benefits. The bottom line: more money into your pocket.

As we have received so many requests to offer a built-in affiliate programme in our ozCart shopping cart software (that does not use any third party affiliate providers), we have just launched one.  We expect this to be very popular as in less than a day we have already been swamped with enquiries about it. Osc Works will also provide code-integration options for the iDev Affiliate programme for ozCart customers who request it.

If you have a need for speed, the new Chrome web browser from Google is definitely worth downloading. 

Performance

From the very first time we used it, Chrome delivered blistering speed when viewing HTML pages, using sites with Javascript, watching streaming videos  and moving through PDF files.  Even viewing our own business website at OscWorks.com.au showcased Chrome as providing superior speed compared to both Firefox and Internet Explorer 7.

User interface and Features - Chrome is clean and clear

The user interface is very simple but also very appealing. It includes features like tabbed browsing and the ability to create desktop shortcuts directly from your browser.

As Google is first and foremost a search engine company, it is no surprise that the Chrome browser comes with some superior search features. Like the ability to search browser history titles (and view thumbnails of your browser history in search results).  A system like the 'speed dial' option in Opera gives you quick access to your most frequently used sites, although overall we found using and managing bookmarks overall more difficult in Chrome than in Firefox or IE. 

Reporting was a nice touch, giving you an indication of how resource hungry your pages are to help you diagnose problems - by providing information about how processor intensive and memory hungry an individual page is.

The Downside: Chrome lacks add-ons and stability

Chrome is still 'beta' (pre-release) software, so it is lacking in some key areas that are well developed in Firefox and IE - especially third party add-ons.

We were also surprised not to find other features available in IE and Firefox that are considered commonplace today, like an email-a-page features. We found Chrome more prone to crashing on Windows Vista machines and we couldn't even get it to install on one of our office machines.

Our overall verdict is that Chrome is an excellent browser and if speed is your primary requirement, it is highly recommended.

No matter how experienced you are in business, a step into online business brings new terminology and ecommerce jargon that you will need to be familiar with. If you are not already familiar with shopping carts, ecommerce, payment gateways, merchants and secure checkouts, here is the place you can find out.

In a two part series we will answer the basic questions about Ecommerce that we get asked by new customers.

The three parts are:

• Basic Ecommerce FAQs
  
• What can you do with a shopping cart?
  

Basic Ecommerce Frequently Asked Questions

 What is ecommerce?

Ecommerce means buying and selling through electronic means - usually through the Internet. Ecommerce websites allow customers to browse through hundreds or even thousands of products, order online and have payments processed in real time, in most cases through using credit cards. Ecommerce is often referred to as an online shopping cart.

Will ecommerce help my business?

Ecommerce can help virtually any type of business. Small, medium and home-based businesses often have limited budgets available for marketing to new customer groups, but ecommerce allows the to reach out to a growing pool of online customers waiting to buy their products online. In Australia, the market for ecommerce is growing rapidly - analysts have calculated growth at about 30% p.a. How much help ecommerce can do for your business is only limited by how much effort you want to put into it. Even when sites are not selling products, they're helping showcase them and support the overall image your business projects to the world.

What is a shopping cart?

An online shopping cart is like a grocery trolley on the Internet. You go through the website like you do a physical store, viewing and putting the products you want to buy into your shopping cart. You can then visit the checkout where you can purchase them online using your credit card. Shopping cart software such as Osc Works' ozCart allows businesses to offer multiple payment options that are processed in real time.

Is online shopping safe?

Ecommerce is extremely safe compared to most physical stores. Physical stores are vulnerable to flooding, fires, robbery, pick pockets, shoplifters and employee credit card fraud. Whereas online, heavy electronic security protects customer credit card details during ecommerce transactions and stores have the option of purchasing strong forms of encryption like SSL (a protocol that creates a secure connection to encrypt information as it travels over the Internet) which allows online shops to use 'https' instead of 'http' in the website address for their shopping cart. At Osc Works, ecommerce websites are stored on dedicated ecommerce servers and stores have the option of purchasing SSL if they wish. No ecommerce system can ever offer a 100% guarantee, but your susceptibility to crime is less when customers shop online.

What software do I need to set up an ecommerce website?

Osc Works' ozCart software is already added into your site when you purchase it. To manage your product listings and the sales you receive, the only other thing you need is a web browser.

Why do I need my own ecommerce store?

If you're selling on auction sites or markets, then your own ecommerce site could save you time processing credit card orders and money through avoiding listing and success fees. It also means you can be selling to customers outside your immediate geographic area (as Internet customers could come from anywhere in the world), and selling when your store is closed as the Internet is open for business 24 hours a day, 7 days a week. Ecommerce is also ideal if you're running a small business or starting up a new business.

Do I need to purchase separate hosting?

Not if you buy from us. Our ecommerce packages are all hosted by us, so you get web hosting space on the Internet as well as the shopping cart software as part of ozCart. You also get unlimited email support for administration issues to do with your store, and hosting issues.

Do I need to know HTML to run an online store?

No - you don't need to know HTML or be a graphic designer to run your ecommerce website at all. You manage your site through an easy-to-use administration section of your site, that runs through a web browser.

How much time do I need to commit?

There's a basic rule in business: the amount of time you put in determines how much you will get back.  A shopping cart website is an online business so just like a physical shop, the time you spend on it is up to you.