If you want to sell products online, you have two options:
Sell on a platform (like Amazon or Etsy) or build your own website.
But why choose when you can do both? Whether or not you decide to sell on an e-commerce marketplace, having a website is critical to building your brand. It’s how your customers can find and connect with you.
Plus, it empowers you to own your business. If Amazon miraculously decided to shut down one day, you’d still have a storefront to sell from.
Yet, despite the pandemic’s boost to online e-commerce, nearly 29% of small businesses still don’t have one.
Websites used to be difficult to set up. Today, they’re easier, cheaper, and faster to build without technical expertise.
If you’re among the 44% that plan to create a website, you’re probably wondering, “how much does an e-commerce website cost?”
- The two-part process in building an e-commerce website includes infrastructure that concerns the underlying components which power your site like domain name, hosting, software, security, and design and functionality, it is what your visitors interact with on your site, i.e., menus, buttons, and other features.
- The cheapest option in building an e-commerse website is opting for a customizable e-commerce platform. The more expensive option is to hire a developer, web design firm, or agency. This may be optimal if you’re building a complex e-commerce store or marketplace.
- An e-commerce website provides 24/7 shopping for your customers, integrates with social media platforms, maximizes your customer value, links inventory to your website and the costs of managing it are minimal.
What Do You Need to Build an E-commerce Website?
Building an e-commerce website is a two-part process:
- Infrastructure: The underlying components that power your site like domain name, hosting, software, security, and more.
- Design and functionality: What your visitors interact with on your site, i.e., menus, buttons, and other features.
So figure out whether you’ll hire someone to build your site or go the DIY route.
If you have some technical aptitude or are willing to learn, build and maintain your e-commerce website using a tool like Shopify. It’s the cheapest option, plus it’s customizable.
The more expensive option is to hire a developer, web design firm, or agency. This may be optimal if you’re building a complex e-commerce store or marketplace.
So the cost comes down to the size and complexity of your website (and who’s building it).
For instance, a highly customized multi-page website with all the bells and whistles will cost more than a professional website with fewer pages and standard customization.
According to Lars Lofgren, Quick Sprout CEO, you’ll need to develop a website strategy, and depending on the field of business, you’ll perform the following tasks:
- Identify business goals
- Market and competitor analysis
- Identify target audience and its needs
- Create a unique commercial offer
- Search engine optimization (SEO) at the development stage and strategy of entering the market
- Develop sketches, concepts, and basic ideas for the website
- Plan for promotion
Lofgren also says a website strategy starts from $2,800, depending on the number of specialists involved and the complexity of the tasks. Plus, you’ll need at least seven working days to create a quality strategy.
Let’s break down the components of an e-commerce site and its costs so you can get a realistic estimate and know what to expect when building your e-commerce site.
Components of an E-Commerce Site
When you know the cost of building an e-commerce website, you can calculate the investment you’ll need to start your business.
However, several components make up an e-commerce website, all of which affect the overall cost.
“The cost can range from $5,000 to $200,000 — in some cases even more — depending on design elements, functionality, features, and customization.” – Nathan Hughes, Marketing Director at DiggityMarketing.
Sean Darlow, Marketing Director at Affiliates Sloty, echoes Nathan’s sentiments.
“The total cost of an e-commerce website might range from $5,000 to $200,000, or even more in some circumstances. Design components, functionality, features, and customization all influence the price.
Design costs range from $1,000 to $50,000, depending on the intricacy and level of customization. The functionality is the most expensive aspect. The cost of programming many functionalities for a website might range from $5,000 to $100,000. Overall, an (e-commerce) website’s cost increases from $500 to $10,000 due to maintenance.”
Let’s take a closer look.
Your domain name is your website’s address on the internet. A name may cost you anywhere from $2 to $350 per year. The price may vary depending on any discounts or extensions and other offers your name host provides.
A website host stores all of your website’s files. Hosting plans range from $5 to $250 per month depending on whether it’s cloud, virtual private server, dedicated, or shared.
Web design involves giving your e-commerce website a professional, customer-centric look and feel so you can get ahead of the competition.
Most e-commerce platforms offer premade templates or themes, which range from $0 to $160+. You also get drag-and-drop tools to help you customize the templates to your liking.
“The cost of design depends on the complexity of the project. How many website pages are being developed, animation, complex forms and elements, and other factors. As a rule, the work of the designer requires from 80 to 400 hours.
Front-end development takes from 120 to 600 hours, and the cost ranges from $1,800 to $15,000. Back-end development takes from 120 to 600 hours of work, and its cost ranges from $4,000 to $25,000.
You also need to create an admin panel, which takes from 60 to 180 hours of work, and costs $3,000 to $9,000.” – Lars Lofgren
Overall, web design costs start from $1,000 and can go up to $50,000 or more depending on your site’s complexity and customization needs.
Content Management Software (CMS)
A CMS manages your web content and allows multiple contributors to create, edit, and publish content on your site. Again, depending on your site’s complexity and customization, you can get a CMS solution from $1 to $25,000.
A payment processor manages the logistics of receiving card payments from your customers. This category includes services like PayPal, Stripe, Square, Worldpay, and dozens of other payment services available as extensions.
Make sure you check the payment processing fees as these significantly increase costs and lower your profits.
Most payment gateways offer purchase-based pricing. The typical industry rate is 2.9% plus $0.30, but some gateways require monthly subscription fees between $25 and $30 per month.
You’ll need an SSL certificate to authenticate your site’s identity and enable an encrypted connection. The cost ranges from $0 to $985 per year.
Add-ons, Plugins, or Extensions
If you want to add more advanced features to your e-commerce website without custom coding, use an add-on, plugin, or extension. For instance, a plugin to add a contact form to a fully-fledged membership site.
It’s not easy to calculate the cost of add-ons, plugins, or extensions because they vary with the e-commerce platform you choose. A ballpark range would be anywhere from $0 to $1,000.
“We had to add some extra apps to the website for additional functionality. This took our monthly cost to about $80 and was $300 to get them all working properly through a developer.” – Jeff Moriarty, Marketing Manager at Moriarty’s Gem Art
E-Commerce Site Maintenance
Like any other business, you need to regularly check whether your e-commerce store is healthy and performing well. Maintenance involves tasks like security upgrades, bug fixes, store audits, platform upgrades, or migration.
You can pay for maintenance monthly or annually, which will set you back between $400 to $60,000, depending on the size and complexity of your site.
Do You Need an E-Commerce Website for Your Business?
The real question is, “Why not have an e-commerce business?” Online sales are set to reach an estimated $5.4 trillion in 2022.
If you’re still on the fence about whether you need an e-commerce website for your business, here are six reasons to help you make that decision:
- It provides 24/7 shopping for your customers: You don’t have to close shop when your staff goes home for the day, during holidays, or any other break in the year. Customers can shop anytime, wherever they are.
- You increase your reach: An e-commerce site gives you a global reach. Plus, it caters to those who don’t want to travel far to shop.
- You can integrate social selling: Combine your e-commerce website with social media platforms so people can buy directly from your Instagram or Facebook page with just a few clicks.
- You can maximize your customer value: Use paid ads to retarget customers with relevant products. Upselling and cross-selling help to boost revenue.
- You can link inventory to your website: Most e-commerce options let you sync your inventory to your e-commerce website to prevent stockouts.
- It’s low cost: While you’ll need an initial investment to set up and get your website up and running, the costs of managing it are minimal.
Start an E-Commerce Business Within Your Budget
You don’t have to spend a fortune building your e-commerce website. Sure, you’ll have to factor in most, if not all, the components we’ve mentioned. Sure, some will thin your wallet at the start. But if things go well, your return on investment will more than make up for it.
Ultimately, the information in this guide will help you make wise, informed decisions about where to put your money and build the best site for your needs.
If you’d like to learn more about the costs of an e-commerce website, check out “How Much Does It Cost To Start an E-Commerce Business.”