Costs Involved in Launching an E-commerce Store
Multiple racks of servers (Photo credit: Wikipedia)
Many people the world over are thinking about doing business online as a result of current economic downturn in many countries. When considering starting an online business, you have to look at what your online competitors are up to. Never copy what they are doing though but use it as a guide and make improvements on what they offer.
What options are available?
So what are the real costs involved in launching an e-business or adding an online store to an already existing business? The costs and options available vary greatly. However, the following are common options available to you if you want to start selling online:
- eBay, Amazon and other online marketplaces
You can use existing services such as Amazon and eBay where you pay a fee to list your products. The site also charges a “Final Value Fee,” which is a percentage of the sale price of your items. A number of businesses sell products on eBay as Power Sellers. The costs can, however, get high and you may encounter some limitations.
- Open Source
Get open-source online shop software, finda developer to customizeyour store and find a hosting service. Note that it is not free, it has advantages and disadvantages. While the initial costs may be lower, longer term management and maintenance costs may eventually become steep.
- Hosted E-Commerce Solution
Make use of a fully hosted e-commerce solution. You have a plethora of web hosting service providers to choose from and a quick Google search of “hosted ecommerce solution” will yield endless results. You are better off choosing an e-commerce solution from your geographical area, such as your country, but this is not necessary.
What to look for in a Hosted E-commerce Solution
- Packages offered – Find out how many products are included in a package. Limitations on productsvary with hosted e-commerce solutions, so find one that suits your businesses needs.
- Fees on transactions – These fees are charged in addition to the monthly package fees, and are based on your monthly turnover or revenue.
- Setup fees – Some hosted e-commerce solution charge an initial fee.
- Allowance for storage – This has to do with data that you store online. Find out if there are any additional storage charges.
- Allowance for bandwidth – Bandwidth refers to the amount of data that flows in and out of your online store every month. Find out if the hosted e-commerce solutionproviders are chargingthis separately.
- Hosting location – The country where your online business is hosted can affect performance of the site, as well as maintenance, support and search engine optimization so keep that in mind.
- Support fees – In case you need technical help, find out whether they charge you for that and, if they do, how much. Do they provide support through the phone, email, chat, etc.?
General Costs of Running an E-commerce Site
When starting an online business, you will incur some costs before you make the first sale. Your e-commerce site is a sales channel for your business. It’s cost effective because it requires relatively little human resources and infrastructure costs that are associated with brick-and-motor businesses.
Bio
The author is a web developer who provides advice on running ecommerce businesses. Learn more about starting your ecommerce store by visiting his website.
Category: Business
Think how you might approach web store feature sets, information architectures, user personas, usability testing, content development strategies, and ROI calculations if you knew your “happy path” was a shopper that started on-line and finished in the store.
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