Cheaper than You Can Imagine! How Much Does It Cost to Start an eCommerce Business?

Choosing between a custom-built or SaaS eCommerce platform is a common decision entrepreneur often face. Irrespective of whether your business is just starting out or if you want to make the switch from large eCommerce service providers like Amazon or AliExpress. Both custom-built and SaaS eCommerce platforms have a lot going for them, so the final decision often goes down to which among the two is cheaper.

One question we often get from small business owners is What does it cost to launch a SaaS eCommerce business? and the short answer is Cheaper than you imagine! In this article, we would be doing the maths and exploring the nitty-gritty of the cost of both options (SaaS and custom-built) and how much does it cost to start an eCommerce business.

Crucial Cost Components When Starting Your Ecommerce Business

Setting up an eCommerce business just like a physical business has several cost requirements, although the ecosystem for both platforms is very different.

We have identified critical factors businesses would most likely be investing in, which may not be absolute depending on your preference but should give a decent idea of what to expect. These factors are but not limited to：

1. Hosting Cost: For your business to be online, it must be hosted on a website. But that is not all. Your eCommerce start-up needs a domain name which is basically your website's address, and some form of security (SSL certificate) to boost the confidence of your potential customers. Hosting cost varies and depends on the hosting service provider you want to use. You can either opt for the much cheaper and limited shared hosting plan, which costs $3-15/month on average, or the more premium dedicated hosting plan that could go up to $70/month.

2. Design cost: It is not sufficient to have a web address and hosting plan alone. Your eCommerce website needs a platform where potential customers can interact with your products. When it comes to the design of your website, you have a couple of options. You can either opt for a custom-made website created by a web developer, which can cost up to $5000, utilize WordPress, Shopify, or WooCommerce and custom themes to build a stunning website, or lastly, use a website builder like Wix or Squarespace that cost between $12-40/month depending on the plan.

3. Payment processing cost: The cost for processing each order made on your eCommerce platform is not fixed and usually depends on the payment processor and the eCommerce service provider (if you are using any). On average, most of the top payment processors charge 2.9% plus a fixed $0.3 per transaction. When choosing a payment processor, besides choosing the service with the lowest costs, you should choose a provider that offers payment in your region of operation.
4. Administrative cost: How effective you manage your eCommerce platform could be the difference between success and failure. Small businesses are advised to invest in customer relationship management (CRM) software to help improve their service delivery and streamline operations. eCommerce platforms like AllValue have dedicated CRM functionalities. But if you are using a self-hosted eCommerce site, you could investigate products like Marketo or Salesforce Pardot.
5. Add-ons cost: Since features on most eCommerce platforms and self-hosted eCommerce sites are finite, you may need to spend extra on add-ons to incorporate custom features you desire for your platform. The cost of this starts as low as $15 and goes up to $299 depending on the end-use.
6. Cost of growing business: Creating and running your eCommerce platform is not enough. To succeed, you need to invest in growing your business, and this could be by running ads, investing in SEO, lead generation, and many more. What and how much you invest in growing your business is your prerogative, and it depends on your business's objectives.

The Total Cost of Building an eCommerce Business

In most cases, businesses who desire a more personalized service often must choose between a custom-built eCommerce platform or engaging the services of a Software-as-a-service (SaaS) eCommerce service provider like AllValue. When we observe and compare both options critically, setup and running cost is often the determining factor.

There are no defined numbers when it comes to how much it costs to start an eCommerce business. So, we can only rely on estimates, which vary and depend on your business objectives and the route you choose to follow.

By taking an average conservative estimate of the cost of the essential components mentioned in this article, we can give small businesses an idea of an eCommerce website cost. Also, we would be making a price comparison between a custom-built platform and some dedicated eCommerce platforms.

Price Comparison Between Ecommerce Platforms

From the data provided, using a custom-built platform is not cost-effective. Although it may give you the freedom to adapt your platform to suit your taste, it is usually expensive for small businesses.

Your best bet is to utilize the service of a SaaS eCommerce platform. And there are a variety of them out there like AllValue, and a host of others.

Cost-saving tips when starting your eCommerce platform

It is oftentimes not enough to adopt a SaaS eCommerce platform because of the relative cost difference between it and a custom-built platform. You should also be on the lookout for creative ways to cut the eCommerce website price efficiently. You can save cost in the following ways：

1. Using the default design templates with free website builders like AllValue to build your website instead of hiring a web designer
2. Applying the same logic to CRM, instead of employing the services of expensive 3rd party CRM apps like Pardot.
3. Employing data and analytics to optimize your platform to boost conversions. AllValue, for instance, has a robust tool for tracking conversions, sales, and traffic.

Adopting eCommerce should be a priority of all businesses, so they do not get left out. And the popular misconception of the high cost of setting up an e-store needs to be debunked, especially if your business utilizes the services of a SaaS eCommerce platform.

For businesses trying to get a taste of what eCommerce has to offer without breaking the bank, AllValue is a worthy service provider as we have proved that your e-store can be up and running with under $1000 for your first year.

AllValue is a robust eCommerce platform that delivers top-of-the-line eCommerce services for both small and big businesses. AllValue’s reasonable prices, coupled with extensive management and marketing features, means that your business would be fetching big bucks in no time.

You can get a taste of AllValue’s offerings for free with their 30-day free trial today. Visit our website today for more information！