Average Cost of Starting an e-commerce Store

Amazon.com, eBay, and Shopify are some of the most common examples of e-commerce stores. It represents a store online where products are bought with an intention to sell. The activities of such a store are centered on transactions. A business owner will have to consistently update their listings, alter prices according to the demand, order inventory, write attractive product descriptions, etc.

One of the main reasons for the emergence of e-commerce stores is the decrease in normal overheads linked with running a retail business. You will not have to pay any monthly rent, find a perfect office space, and save up on electricity costs. However, this does not mean that running an e-commerce store is COMPLETELY free.

Let’s look at some of the bare necessities associated with starting an e-commerce store. This blog will help identify the average costs of starting a store.

  • Domain Name

Although there are a couple of sites that offer free services, to establish a successful store you must purchase a domain name. It is simply an identity of your businesses URL. These are inexpensive and start at $0.99-$15 per annum. A pro tip is to purchase a .com domain name.

  • Hosting Costs

Numerous hosting provider servers charge a fee to host your website. Absence of hosting servers would impede your internet connectivity. Shared hosting is mostly cheaper compared to private hosting. A shared hosting plan costs between $3.50- $40. On the contrary, private hosting starts at $200 but comes with better speed. The average cost of hosting is $29 per month. For instance, BigCommerce begins at $29.95/month.

  •   Inventory Costs

E-commerce store can start with a $0 upfront inventory costs. It means that you will not have to keep any inventory. You can decide to use the drop shipping model. When a customer buys a product from your store, you further the order to the supplier, and they will be responsible of shipping the item straight to the customer. However, the shipment will be under your name. If you decide to still keep some inventory, then the cost will largely depend on the amount of inventory you want.

A good starting amount varies from $0-$1000.

  • Payment Processing Costs

Opening up a business account or processing payment through one of the famous platforms costs money. It is mostly 2-3% of your revenues. Payment processors such as Stripe and Shopify also charge a $0.30 per transaction.

  • Website Designer

Since you will be operating online, it is important to have a presentable website. It will build trust with your visitors and increase sales. Website designing is not cheap. The price can vary but it will mostly be in the range of $300-$3000+.

  • Logo Design

Having a logo will make you stand out in a crowded marketplace. You can get your logo made from freelancers within $5-$75.

Although several other costs go into starting an e-commerce store, the ones mentioned are the back bone of a store. Without these, you cannot establish a business.

Example

If you are only considering the basics of starting an e-commerce store, then check out the average costs below:

  • SEO cost can vary from $0-$249 and vastly depend on your budget. Similarly social media costs also depend on your and how well your social media ads reach target audie
    nce. It is $7.19 per 1000 impressions on Facebook and $7.91 per 1000 impressions on Instagram.

Example (Drop Shipping Model)

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