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.