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The True Cost of eCommerce Business

Let’s get real and examine the true cost of running an eCommerce store. Everyone these days wants to be in the online shopping world and wants to make thousands of dollars each month. But is it really that simple to just launch a website and start making money from your eCommerce website? In the next few paragraphs, I will share my experiences and knowledge with you and try to shed some light on a few questions you may have. Here we go:

To run a successful eCommerce store, you will need the following

  1. An eCommerce website.
  2. Products to sell
  3. Have a bank account to deposit the monies.
  4. Need to have a merchant account for credit card processing
  5. Need some money to start your business.
  6. Marketing strategy and funds
  7. A good eCommerce team

 

Let’s examine each of the above

You will need an eCommerce website

There are many options in the marketplace today for an e-commerce website platform. I will try to talk briefly about each of these platforms and how you can utilize them for your business. We will group them into 2. DIY (Do It Yourself) websites and Managed eCommerce Websites. Both options offer hosted services but there are differences when it comes to putting them together and launching your eCommerce store. The DIY option allows you to build your own website with the tools provided by the system but you have to do the designing work yourself. You don’t have to know any coding or learn programming however will have to learn how to use these tools and page builders which in return will cost you some time to configure your web store.

Development Cost Analysis of DIY eCommerce Websites

Development stage: DIY websites may cost anywhere from $29/mo to $99/Mo depending on the platform package you choose. Most of these DIY platforms will also charge a certain percentage of the sales that are being generated by your website. This amount varies based on your yearly volume. The amount of time required to build your DIY website depends on your design complexity and your understanding of the tools and platforms. So, you will have to figure out how much is your time worth.

Media upload Stage: This goes together with the development stage. Most of the time you will have to provide your own photography, content, text, or videos because you will not be able to use copyrighted materials and or images in your website setup process unless otherwise authorized. This doesn’t include the product images.

 

Development Cost Analysis of Managed eCommerce Websites

Development Stage: Managed websites are designed, developed, and hosted by website professionals and come equipped with tools and functions that your business may require. In this option, a design firm or development agency will custom develop an e-commerce website and configure your store for you. They will design the front end of your website and configure the backend functions such as media management tools, reporting tools, B2B and B2C tools, content management tools, payment gateways, shipping configuration, store identity, etc.

Managed eCommerce costs can vary from store to store depending on the functions you are looking to have. Managed eCommerce website development can cost anywhere from $900 to $250,000 or more. At DBMANAGERS we offer SaaS managed eCommerce websites from $995 to $4,900 for setup fees and for full custom website development the prices start at $9,995

Hosting Costs: There are a couple of different options for hosting services. If your store is part of a cloud network and using VPS (virtual private server) then the costs can be part of the monthly management fees. If your website requires a dedicated server or server clusters then the costs will be higher. A dedicated server can cost anywhere from $200/mo to thousands of dollars per month. This depends on the number of machines, hardware, software, Cpanel usage, and server configurations. Also, when using server clusters you may need dedicated server admins which will add more costs to your operations. At DBMANAGERS we offer custom eCommerce website solutions for small, medium, and large companies.

You will need products to sell

Just like a brick-and-mortar store, your online business needs products to be part of your online e-shop. How do you decide what to sell? Can you or should you sell anything on your website? To answer these questions, you will need some market analysis done to find out which products are the best ones to upload, or which industry to focus on. Here are a few things you should consider before you start selling.  

Product margins – Does the product price allow you to make a good profit or the margins are tight?

Product availability – Is the product available in stock for fast delivery. You want to make sure that the products you are uploading are in stock and available for immediate shipment. Your website features also must be available to show that the product is available for shipment so that the user can make a quick purchasing decision.

Products size: – Can the product be shipped as a small parcel or does require freight truck services. Pick small-size items that can be shipped by FedEx or ups or USP services to reduce shipping costs. Large items will cost a substantial amount of money to ship to the addresses if you are shipping cross-state lines or even cross-country. Some large items also require white glow services which will increase the shipping costs.

Product competitiveness – Are your products unique or they are available from other merchants or marketplaces? Selling unique products will give you an advantage from a price point and allow higher margins in sales.

Product/Catalog Upload Stage: Getting your products onto your website requires backend knowledge of the platform and a basic understanding of building your product specs. The time it will take to get your products online depends on the number of SKU’s that you want to upload. If only have a few items then this should be an easy process and should not take a long time to upload your products. But if you have thousands of items that you are trying to upload then this will require a different approach. There are data upload companies that can do this for you. At dbmanagers.com we offer website catalog management as a service to our clients through our managed website services at prices from $0.25 to $4 per SKU depending on the SKU count.

Drop Ship Vendors and Products – If you do not have your own products or don’t have access to manufacturers then you can use drop shipper vendors to connect your website. These drop shipper companies/vendors offer catalog products for your e-commerce website. You can sign up with the drop shipper and pick a category or industry to add products to your website. Your eCommerce store connects with the drop shipper company through an API or you can download their CSV files and do the uploading on your own. At DBMANAGERS we offer API connection services to all eCommerce websites.

Drop Ship Products Pros & Cons: When adding the same products to your site as the million other websites have creates a disadvantage in search engine eyes. Having the same products with identical information, and products titles will cause your site to be seen as a duplicate of others and will not have much value from the search engine’s perspective. Even though there are benefits to working with drop shipper companies the downside is heavier than the benefits. You should focus on items that you can market easily and move fast. It is not about having thousands of items but is about being able to market these products to the end-users. So less is more when it comes to eCommerce catalogs.

You will need a bank account.

A bank account is required to connect to your eCommerce store so that when the shoppers make purchases the funds can be deposited into your account.

You will need a merchant account

Merchant accounts are required to be able to process payments through your website. There are multiple gateways in the marketplace that you can use. Some of these merchants are PayPal, Stripe, Authorize.net, and Square to name a few. These merchant processors will cost about $30/mo plus the % of the sales usually at 3%. Check out our blog about accepting payments online

You will need a marketing strategy

Now that you have your eCommerce website, it is time to start getting it in front of shoppers. But how do you do this? Well, there are a few ways you can do this. Here are couple of suggestions:

SEO (search engine optimizations) – This is an important part of your website if not the most important part of all. Your eCommerce website must have the proper title and meta tags in place and optimized for the search engines to be able to find your website and index it in their database. There are local SEO services, nationwide SEO services, and global SEO services. To get your business profile established in the local listings you will need to create business profiles in many places and submit them for review and acceptance. Google my business section is the top place for your business profile and website links. At DBMANAGERS.com we offer Local SEO services for $500/mo. We offer Nationwide SEO service for eCommerce websites starting from $1,500/mo

PPC (Pay Per Click) Advertising: This is another way to get traffic to your website. This requires you to sign up with Google Adwords or Bing Ads etc. The budget is entirely up to you. Setting up these marketing campaigns can be time-consuming and confusing at the same time. Incorrectly set up campaigns can cost you thousands of dollars and bring zero returns. At dbmanagers.com we offer a professional PPC campaign setup. Contact us for costs and details.

Social Media Advertising: Another way to generate traffic to your eCommerce website. Again the budget is entirely up to you.

Other types of marketing you can consider are email marketing, content marketing, influencer marketing, etc.  

Analytics & Measuring Your Success

One must understand and be able to analyze the data in your traffic metrics. To make sure that your hard-earned dollars are spent in the right direction and bring you the returns on your investments. Making sure that your eCommerce website is attracting the right crowd is essential in your online success. Campaigns that are not configured and optimized properly will have unexpected costs and short campaign life spans due to funds being used in the wrong places and wrong keywords. A small website can run a local campaign with couple hundred dollars per week to test the waters. Offering specific coupon codes in your campaigns will help you identify where the sales are coming from. Making sure that your E-commerce website is equipped with catalog and price rules as well as coupon rules is essential in running holiday and special day marketing and sale campaigns.

Keeping Up With Technology and Trends

Having a website is not enough. Your website must adhere to the most recent security requirements as well as advances in technology. This means that your website will need updates periodically and must be monitored by professional web developers and support teams. You must include this in your cost analysis for your website. Some DIY website platforms offer this included in their packages. Check before subscribing. This is where managed hosting and managed eCommerce services come in handy. If your website is hosted on an unmanaged server, you will have to attend to your server if there are any issues arising from online attacks or server capacity-related issues. You must account for all this when you are starting your eCommerce business.

If you are running a large catalog eCommerce website, then from time to time you may face database-related problems, and this will require the attention of tech teams. So in conclusion, you will need a different level of support at different times. The larger the e-commerce website, the larger the costs. At DBMANAGERS.com we offer website development from A to Z. Our services include, design, theme development, custom layout design, custom feature development, admin tools development, hosting, data and catalog management, high-speed hosting, and maintenance.

At DBMANAGERS.com our services include Magento website development, WooCommerce website development, and Shopify web development. Please talk to our sales teams to find out which is the best option for your business.

You Need a Good Team

We are your one-stop-eCommerce headquarters. We are your team in eCommerce success. Give us a call or email us today you will be happy you did. DBMANAGERS.com

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