How to Calculate eCommerce Website Pricing in 2021
How Much Should it Cost to Launch your eCommerce store? Learn how to calculate eCommerce website pricing for your niche.
Knowing the cost of building an ‘eCommerce website’ website is essential because it can help determine the investment needed to run a new business venture.
To get there, you also need to know how to calculate eCommerce website pricing by functionality and purpose.
The problem is that creating an online business website involves many important things, all of which affect the overall value of your business. If you don’t have a clear plan of action, you can quickly start spending way too much. But don’t worry, in this article, we will share all the information you’ll need to calculate the cost of your eCommerce website project.
Reading this post is an essential first step in creating an online store, because we’re goin to show you how to avoid high fees and increase profits by understanding how to calculate eCommerce website pricing effectively on the front side.
Ready? Let’s get started.
Before You Calculate eCommerce Website Pricing:
The cost of an e-commerce website is a big part of the decision-making process.
However, you want to make sure that you choose a business solution that meets the needs of your business. To do this, you will need to define what you need your website to do.
1. What type of online store are you expecting to have?
The type of online store is an essential factor in the process of business.
A quick example is a store that sells products as opposed to a service. To help you determine what you need, ask these questions:
If you are planning to sell products, how many different products or models will you add to your online store?
Are you selling to other businesses (B2B) or customers (B2C)?
Are you expecting a private store and show your products to specific people like WooCommerce private store.
Be as specific as possible in this part of the planning process.
For example, some services or products may have different requirements for the appearance of your online store. These requirements can help you narrow down your list of essential e-commerce terms.
For example, do you need a multilingual store? Are you looking for a store with different login options?
2. Do you plan to sell your products online only?
Many stores are moving online store, especially by 2020, but do you also have a brick and mortar store?
Retailers must consider the entire purchase cycle when determining the role that mobile plays in their total store sales. Savvy retailers are finding ways to connect and retain shoppers on mobile devices making it more likely that they will convert in-store.
While online sales are important to retailers, we can’t forget that “Mobile and online transactions represent only a sliver of total retail revenue potential,” as Kasey Lobaugh, principal at Deloitte Consulting LLP and Deloitte Digital’s chief retail innovation officer, stated in a recent study.
It’s easy for online marketers to envision traditional brick and mortar stores as cobweb-ridden ghost towns abandoned for the shiny luster of all that’s online, but the truth is that 93% of retail sales were still made in-store.
Selling products online means managing and uploading data (more on that in an instant). Assuming you’ve already found a list of management tools that work for you, look for an e-commerce platform for the integrations you need most.
3. The Scope of Your eCommerce Website project
All kinds of e-business companies are hosted on the Internet from stores that sell a unique product to stores that seem to sell everything under the sun. There is a huge difference between the scope of each eCommerce website project. The needs of a small brand with two or three unique products are greatly different from an online jewelry retailer with thousands of skus and deep search filtering requirements. As you can imagine, the size and functionality between these two examples is vast.
Before you start pricing, you need to find out where your needs lie in order to calculate eCommerce website pricing.
Start by answering these questions;
Are you a beginner without considerable reservations?
Do you have a successful retail business that you want to do online?
Again, independence is the key to determining how close you get to the best website.
4. What is your eCommerce development budget?
The fact that others have done this before does give you an advantage, and that advantage comes in the form of a Guide to starting an eCommerce business without getting caught up in all the red tape.
Figuring out how to plan a website design budget can be pretty difficult.
Even upon doing thorough research on the matter, they may find conflicting information that confuses them even further. While on the one hand, good websites require a standard budget of about $5000-$10000, on the other, a basic DIY website can get built with a few bucks and a little effort on your part!
This broad range in pricing and trying to sort through what’s included and what isn’t; is exactly what drives first time web-prenuers over the edge when planning a website design budget.
In fact, it can be hard to determine exactly how much a site will cost simply by looking at its design. Having a predetermined budget helps to draw the line between what you can afford and what will be too much.
Click here for a complete guide on determining your website budget.
5. What are your shipping options?
In today’s evolving e-commerce environment, a customer-centric philosophy is what will ensure any successful business can maintain a competitive advantage.
A 2019 study found that a brand’s shipping experience can be just as important as the quality of its products.
The study showed 75 percent of patrons have abandoned an online purchase and nearly 60 percent have forgone certain retailers entirely as a result of poor shipping experiences. Even so, the symbiotic relationship between the shipping and purchasing experience remains an afterthought for many retailers. Technological advancements have infiltrated almost all aspects of consumer life and play a significant role in almost any industry, and as a result, customer expectations are at an all-time high. This article will discuss some of the different benefits of integrating shipping APIs into your e-commerce strategy.
Click here to learn about the benefits of eCommerce shipping APIs.
How to Calculate the Cost of Building an Ecommerce Website?
The best way to determine the cost of creating an e-commerce website is to compare different e-commerce platforms, tools, extensions, and other necessary services according to your business needs.
Because there are so many ways to create an online store, most cost calculators for online business websites end up being completely inaccurate (so it’s best to avoid them).
For the purpose of this article here is how you should break down items to calculate eCommerce website pricing:
1. Hosting costs
Every website needs web hosting.
This is where you store your pages online. You will also need a domain name, the address of your website on the Internet, such as wpbeginner.com.
Choosing the right eCommerce platform such as BigCommerce will also allow you to easily integrate your bookkeeping software, order processing software, fulfillment and shipment, as things like that are vital for you to be able to starting an eCommerce business.
You can easily start by using one of these professional themes for BigCommerce:
2. Payment processing costs
Payment processing is the foundation of eCommerce. Choosing the wrong payment processing option can significantly impact your business, as it substantially increases your costs and decreases your earnings. To avoid that, you can skip the noise and reference the 7 best payment gateways of 2021 below.
The 7 Best Payment Gateways of 2021
- Best Overall: Authorize.Net
- Runner-Up, Best Overall: Stripe
- Best for Online Businesses: PayPal
- Best for Brick-and-Mortar Businesses: Square
- Best for Startups: Braintree
- Best for Multiple Channels: WePay
- Best for Selling Internationally: 2Checkout
3. Design costs
The right eCommerce design for your audience always plays a key role in converting your users.
Why? Because the right design convinces and converts your users before they leave.
As Pixel Productions Inc states;
The professional web design process is design with a purpose. Every element, action, and experience needs to be exceptionally well thought out to create a website conversion.
This means a human approach, taking the time to understand your business as well as your customers’ needs to create a website for user engagement, successful CTA’s and ultimately create a website conversion producing ROI.
Now you probably think I’m not a website design expert; how do I get a design that will help my store stand out and increase sales?
This goes back to understanding your needs and your capabilities. Most eCommerce platforms have dozens or even hundreds of well thought out themes for you to start with at little extra cost.
Just take a look at the 10 Best Premium Shopify Themes of 2020.
Themes are a great way to get the ball rolling while allowing you to focus on driving sales and growth then make customizations to better fit your audience down the road.
If you’ve been generating online sales for a while now, this might be a good indicator that you’re ready to create a more custom eCommerce website with the help of a professional team.
4. Add-ons and extensions cost
Most people new to eCommerce don’t understand that even when choosing the right platform there will be additional expenses that need to budgeted. An e-commerce platform cannot combine all the required features into one program. Even if they try to do so, things get confusing, and the system is difficult to use. To solve this problem, many e-commerce programs work traditionally. This allows you to extend the primary system through extensions and programs.
These plugins or extensions allow you to add new features to your e-business website and extend its usefulness. But, unfortunately, most of them pay bills, and the purchase will add to the cost of building your business website online.
For reference, BigCommerce lists their 11 most essential Apps that provide functionality beyond the native platform, you can get an idea of what type of functionality here.
5. Total costs of an eCommerce website
When determining how to plan a website design budget, there are two core options to consider:
Option #1: Paying a professional web developer
Option #2: Using a CMS platform such as WordPress and designing a basic website based on the themes and features provided by the platform.
With option #1, the hourly cost to hire a freelance web designer may be from $30 – $125.
However, if you are approaching a premium design firm, the cost can range between $85 – $210 depending on the services.
You can use option #2 to save on website design pricing, but the outcome will not be desirable unless you fulfill the following conditions:
- You have experience in setting up hosting, designing a website and managing a website.
- You have minimal design and development needs that can be accomplished without the assistance of a programmer.
- You have enough time to spare learn and build on a platform such as WordPress.
Even for basic website building on WordPress, there are some costs that you have to bear.
For example, you will need to buy the domain and hosting, and the pre-made basic templates cost around $30 to $50, and premium or paid templates cost around $80– $200. You can also think of hiring a designer at a lower cost to customize the pre-made templates into something you specifically need. You can expect a cost of about $300 and $800 to hire an expert designer for customization of templates.
The prices mentioned above may vary based on the amount of work that is required, the number of pages, design specifics, need for images and graphics, layout design and so on.
6. Costs of growing your business
Once you have created your eCommerce website, What’s next?
Starting an eCommerce website is easy. And at the start, you might even get some sales.
But to generate more sales… enough sales to become profitable is a little more difficult.
There is a lot of competition out there. You can either show up on the first page of Google, or you can be lost behind those who do.
As an eCommerce website owner, your goal is to increase sales and to do that, and you must use some growth hacking methods to boost your sales and increase leads.
These are tried and tested methods that have worked for my website, and the best part is that these methods are ever-green. What does that mean? It means that these growth hacking tips for you eCommerce site will continue to work long after you implement them. They will not just work, they will generate traffic on your website and you’ll get leads in no-time.
Generally speaking, it’s important to make sure that you have created an eCommerce business that is going to work for you. There are many different options that you have available to you, and a selection of ways that you can create a functioning eCommerce business on your own website or selling platforms.
Using the outline above, you should be able to accurately calculate eCommerce pricing for your specific goals and avoid some common costly pitfalls.