How much does an Ecom Website Cost?

How much does an Ecommerce website cost?

This is a question that I get asked on a regular basis, and often people are (not pleasently) surprised by the answer.

There are 3 main components to the costing of an ecom website, these are: hosting , cart and payment system .

Hosting

The hosting of the website can be more expensive for an ecommerce web site. The reason for this is that often you cannot use cheaper shared hosting services if you require high traffic, secure online transactions - shared hosting means that your website is run from a server which has other websites running on it, so the cost of hosting is also shared between the multiple websites.

For secure ecom websites, you may need to get a dedicated server, and that costs more. Dedicated servers can be leased for as little as £30+VAT per month (nearer £60+VAT per month if you require a decent spec windows based server). On top of that, there is the considerable costs of setting up the server, adding industry grade firewalls and anti-hacking systems, software licences, and the ongoing costs of making sure the server is running 24 hours a day, 7 days a week. In addition, you also need to make sure that there are systems in place to deal with issues like server downtime, software failure and migration. You can lease what is called a 'managed dedicated server' which means that the hosting company takes over the tasks to maintenance, backup and emergency recovery situations. Managed servers usually have a 'service level agreement' (SLA) which guarentees a minimum level of uptime eg 99.9% uptime means that the website will be online for a minimum of 99.9% of the year. (this is the SLA we currently offer with our dedicated servers), The cost for managed dedicated servers can be as high as £1,000 per month, although typically, you should not have to pay more than £100 per month for a linux server and £200 per month for windows based server.

Payment Systems

The most complex bit about setting up an E-commerce webiste is the payment system. For a business to use an online payment system, you may need to set up an Internet Merchant Account (IMA) which is set up specifically to receive online payments. Then you will need to set up a Payment gateway (eg paypoint , SagePay , Worldpay ). The payment gateway acts as a link between your website and your merchant account. It accepts credit card payments, authorises the credit card, performs fraud checks and transfers money from the customers credit card provider to your bank. Some Payment Gateways also offer a merchant account, so you might not need a separate merchant account, for example, the RBS worldpay  The work involved with setting these systems up varies between payment gateways. Worldpay has a very complex application procedure and is one of the most expensive to set up. Sometimes the application procedure can take several weeks, so if you are thinking of taking payments online, the first thing you need to do is start the process of setting up your payment provider.
The monthly cost for your payment system depends on what IMA account you are using and what payment provider.

As a guideline, payment systems typically cost about £150 per month for an average volume website. payment gateway Setup fees should be around £100. This does not include the time required for the developer to integrate the payment system into the website and to set up the payment gateway to communicate with the site when payments are authorised or declined. Generally, this will take up about £200 - £300 in setup development.

Another more simple option is to use PayPal . Paypal application process is usually quicker (but still has lots of hoops to jump through) and the ongoing cost is much cheaper and easier to understand. Note for every transaction made on your site, you will be charged by both the bank for the credit card payment and the payment gateway, normally about 3-5% of the total transaction. To use PayPal, your customer does not need a paypal account, they can pay by credit card straight into your paypal account.

Shopping Cart

There are three types of shopping cart, off-the-shelf , hosted cart and bespoke . (there are a few variations on this, but most fall into the 3 main categories)

Off-the-shelf shopping carts

Examples of these are Cubecart , Actinic , NopCommerce , osCommerce . This is basically a bit of pre-written software that the developer used to build the e-commerce website. Some, like Cubecart and NopCommerce are free. Others such as Actinic cost. Actinic starts from $349 for the basic version to $3,499 for the "Actinic Business Multi User Version 8 Core" which includes multi network, epos and just about everything you will ever need (prices correct at time of writing). Choosing the right shopping cart can be quite difficult and the type of cart you use will affect your hosting options. NopCommerce requires a windows based server, cubecart requires a linux based server (which is cheaper for hosting).

Hosted Shopping Carts

Some shopping cart systems are integrated into an 'all-in-one shopping solution'. Examples of this are absolute shopping cart , mal's ecommerce . These systems include both the shopping cart and the payment systems in one. Generally these systems are less flexible than the off-the-shelf products and are not hosted on your website.

Bespoke shopping carts

Most of the ecom sites that I've worked on have been based on bespoke shopping cart systems. Examples of which are:

ReefRash - cleethorpes based shop selling surfware, wetgear and streetware
Di-moda clothing - online designer menswear store
Dr Nick Lowe - innovative skincare products
Fab Fancy Dress - online fancy dress store
JKS Gift Shop - jewellery, Footwear, glassware and giftware shop based in Cleethorpes, NE Linconlshire
Savvy Specs - online glasses store
Kids Love Milk - Childrens clothing store
Shoulderdoc Store - Shoulder rehab products

Why use bespoke shopping carts?

There's no doubt that bespoke shopping carts are the most time intensive option for a developer. Generally, you are looking at about 50-70 hours development time for the bespoke site. For more complex ecom sites, this can be much higher. However the costs of going bespoke are often justified by the benefits. There benefits are:

• Fully cusomtisable interface - you are no restricted to using pre-built site templates or layouts
• Flexible cart options - with bespoke sites you can add new features more easily such as prescriptions for glasses, related products, product reviews, integration with other website features like blogs and forums, affiliate networks, PPC conversion tracking, etc
• Simpler admin systems - With bespoke sites, you only have to show the admin options that are really needed by the site admins. In general, the more features your shopping cart has, the more complex it is to update your products and manage orders. Actinic is incredibly difficult to update for the average person and NopCommerce has quite a complicated VAT system.
  
  With bespoke systems, you can strip away everything that is not relevent, which greatly decreases administation and training overheads, thus the bespoke system saves you time and money over the off-the-shelf products.

So how much does and Ecom site cost?

OK, the cost varies depending on your requirements. Below are two examples of what you should pay for a very basic ecom site and fully featured ecom site:

Cheap ecom site:

• small, fixed number of products
• no admin system
• low monthly transactions
• all in one shopping cart and payment system (eg paypal, mals commerce)
• shared hosting
• single currency
• no SEO facilities
• costs:
  setup - £200
  build - £600
  hosting and maintennance - £50/month

Fully Featured Ecom Site:

• unlimited number of products
• full admin system
• managed dedicated server
• complex shopping options
• multicurrency payments
• SEO facilities built in
• cost:
  setup - £1,000
  build - £8,000
  hosting and maintennance - £300/Month

These are just guidelines on how much ecom websites cost, and each site should be looked at on a case by case basis.

Now, when presented with these numbers, many potential clients choke on their biscuits. However, now that you know what is needed to set up and build ecom sites, you can probably see why they can be so expensive.

Sometimes, we advise clients that it would be more cost effective to use Ebay  or Amazon  for online selling, and then have a simple, cheaper non ecom website built, rather than have an integrated ecom website which might not see any return on investment for many years, if ever.

Often, clients already have ecom sites, and they need to improve sales through the site. There are two ways of doing this, either through  SEO - search engine optimisation (or search engine optimization in american english)  or improving Conversion Rates. Both subjects will be considered in a later article.