General eCommerce costs

[Kiwi_Waka]

Hi All,

I've been reading this site incessantly for a couple of weeks now and have been amazed at how much the members here know about eCommerce.

I've been putting spare cash into overpaying my mortgage but last year got told I couldn't overpay anymore until August so now have £40k just sitting in an ISA earning £30 a month. I think rather than overpaying my mortgage to save a few pounds each month I would be better putting the cash into an eCommerce venture.

My question is on general costs as I have no idea. I've Googled costs for websites and seen one for £3500 which I thought sounded reasonable but maybe that's really high? How much should I be looking to spend on (monthly):

• A very good website with cart, checkout and payments, logins, email database etc? (One off cost if I work as the admin once built?)
• SEO costs (Is this one off?)
• Google advertising costs
• Instagram influencer's costs
• Facebook business page and adverts
• Does Twitter cost anything?
• Other things I don't know?

I have the initial investment + about £4k per month spare so I hope I wont need additional funding. No idea what I will sell but I'm thinking along the green path i.e. recyclable stuff, climate change blog.

Tiny background on me: I've run an eBay and Amazon FBA business in the past while job hunting (retail arbitrage) and am a chartered accountant.

Thanks
Kiwi_Waka

 

[antropy]

First things first ecommerce is such a large industry that covers many many sectors. So when you say setting up an ecommerce business, that is all well and good but you need to be more specific. When you start looking at initial costs these will vary from sector to sector in the ecommerce sector but from your bullet points these are my initial thoughts:

1) Depends what platform you are going with but lets say OpenCart. A simple website that is not all singing or dancing is about £1k to £2k. A more advanced website would be around £3k to £4k mark. The once it is built you will have hosting costs and on-going development costs.
2) SEO is not really a one-off as it takes time to build up your Google ranking but price varies from company to company.
3) Google advertising costs link to SEO so this can be tied together.
4) Again Instagram influencing can be tied into SEO.
5) Facebook adverts can be tied into SEO.
6) Twitter is free but make you post relevant artciles or blogs to build up from following (this links to all social media actually).
7) You need to have a solid business plan when starting. It is all well and good saying I am going to start a company but you need a plan to fall back on when you are first starting up. Also have targets from month to month as that will spur you on to actually try to make a success of this venture.

Hope this helps, Alex

 

[d3lvedesign]

Hi!

To answer your question, "how long is a piece of string?". I get asked how much I charge for a website all the time, and I respond the same way to everyone, "it depends".

I typlically start a non eCommerce website at the 3k mark. This would be a bespoke designed website and built from scratch. An eCommerce website however, will start at the 5k mark. This is purely for bespoke design, and the development of a "theme" which will be installed on your chosen eCommerce platform.

eCommerce Platform

The eCommerce platform won't really cost you anything, as they're usually free to download, install and setup on a web server. Getting someone to do the installation and setup etc, may cost you in addition to the website design and development. Keep this in mind.

The most used eCommerce platforms like Magento may cost you a lot more to get setup and developed, purely because Magento developers are a unique group of people with a unique set of skills. Keep this in mind too.

Other platforms you could use include Prestashop, WooCommerce (with WordPress), Open Cart and Shopify. Shopify will cost you a monthly fee, to use and run, as it's all self-hosted by Shopify themselves. The good thing about Shopify is that they provide your SSL certificate, website hosting and payment gateway. All of these would need to be setup separately if going with one of the other platforms, incurring additional costs.

SEO

A website should be built with SEO in mind. This means, it should be coded, and planned with all the most important on-page SEO factors taken into account. Implementing the on-page SEO, can be done as a one-off task but would require on-going work to ensure your website remains optimised for your targetted keywords and audience. This could cost anywhere from £200 per month.

Google AdWords

Again, this depends. How much of your product do you need to sell to make a profit? How much do you currently sell on average per week, or per month? What keywords are people using to find your products online? Are these keywords on-trend at the moment? If not, when will they be on-trend? Who else is selling your products? How much is the CPC for your targetted keywords?

Depending on the above you'll need to work out what your ad spend budget will be (monthly), and you'll probably need to pay around £250 to £500 per month for someone to manage your AdWords account. However, some AdWords agencies will charge you a percentage of your budget as their management fee, but will require a minimum budget of around 1k to get started.

You could manage the account yourself, at no additional cost. But, if you don't know what you're doing, you'll end up paying more than you actually should for your AdWords campaigns. Keep this in mind.

Instagram Influencer

Depends on the model the influencer is working with. Usually this would be a kick-back for any sales generated using their discount code.

Facebook Advertising

Similar to Google AdWords, and can be very expensive if not done correctly.

Twitter

Posting on Twitter won't cost you money, but will cost time. Think very carefully about why you want to use Twitter for your brand, and what the end goal is. Take a look at your competitors, and how they use Twitter. A word of advice, don't use Twitter as a sales platform, unless you're using their Advertising tools. I'm not familiar with the costs involved, but I'm guessing it works in a similar way to Facebook.

Other things to take into account, good quality and fast website hosting can cost you anything from £30 to £150 per month. If you're going with Magento, you'll need a dedicated server for it to run properly. A dedicated server can cost in excess of £50 per month.

You'll need monthly back-ups of your website and it's data. This could cost extra, or may be included in your hosting package. Worth checking with the provider.

Have you thought about Email marketing? Using something like MailChimp to collect user email addresses and then to later market your products to them through a weekly or monthly newsletter can help increase website traffic and sales. MailChimp is free to use but requires some expertise to create nice looking templates and to setup segmentation, and scheduling.

Branding, logo design etc. A nice, clean looking brand will help to encourage people to approach your website, social media presence and engage with you. Think about engagement before the sell.

Ebay and Amazon integration. Almost all eCommerce platforms now provide some sort of sync or integration with Ebay and Amazon so you can sell your products to established markets and audiences. If the integration isn't included in the eCommerce platform, it may cost extra to get it setup. Sometimes this requries bespoke integration, but usually there's always a "plug-in" or "app" which does the job for you at a fraction of the cost.

I might have missed a few things, but that's the jist of it.

 

[Mr D]

Anyone can sink money into a business. Getting that money back out, not so easy.
You have experience of ecommerce already so presumably already know how to do parts.

A website is nice, getting the website out there so people buy from you rather than ebay & amazon can be somewhat pricey. No guarantee of return.

Could always do a mix of website, ebay and amazon. Using the exact same stock - though would not try retail arbitrage on amazon again. They have shut down accounts multiple times for fake stock that you cannot prove is otherwise.

 

[antropy]

Anyone can sink money into a business. Getting that money back out, not so easy.

One of the truest things I've ever seen!

Paul

 

[Kiwi_Waka]

Thanks for the feedback.

You need to have a solid business plan when starting. It is all well and good saying I am going to start a company but you need a plan to fall back on when you are first starting up.

Definitely. I'm going to start building the business and project plan and researching products, suppliers, trade fairs and effective websites to see how they market their goods. I figure it's much better (easier) to imitate something good rather than trying to build something completely new and original.

An eCommerce website however, will start at the 5k mark. This is purely for bespoke design, and the development of a "theme" which will be installed on your chosen eCommerce platform.

Thanks. Although websites can be done on "the cheap", it's definitely worth not cheaping out on the main source of sales and the face of the company. I think I'll budget up to £8k for the initial website design.

The most used eCommerce platforms like Magento may cost you a lot more to get setup and developed, purely because Magento developers are a unique group of people with a unique set of skills. Keep this in mind too.

Never even heard of Magento but i will do some research on the various eCommerce platforms to see which one suits me. Buy right the first time to save issues down the line.

I've just looked at your website and you seem to know what you're doing. I will get in touch once I know what I want to do.

Could always do a mix of website, ebay and amazon. Using the exact same stock

I will definitely use multiple platforms to sell as I figure no one will be looking at my website in the first year or so.

 

[Mr D]

I will definitely use multiple platforms to sell as I figure no one will be looking at my website in the first year or so.

Yes, takes time and effort. If done properly then can be a good investment of time and energy.

 

[TheWebDesignCompany]

Separate in your mind the website and the SEO.

You haven’t said what you are looking to sell, who who your target market is or where they are based. All of this makes a big difference to your requirements.

An e-commerce website can range from £1600 to £16’000 or more depending on the answers to the questions above.

The SEO will the be broken down in to on-site SEO and off-site SEO. The on-site SEO would likely be a one off cost if it isn’t included in the cost of building the website, but the off-site SEO is an ongoing thing that needs regular work and msintenence. Some of which you can do yourself fairly easily if you learn and put the effort in.

P.s WooCommerce is a free WordPress plug-in that is used by hundreds of thousands of websites (if not millions) and has no ongoing costs. I only mention this as you could think it does have on going monthly costs from one of the posts above.

 

[dan19900]

An 8k website won't look any different than if you sign up to shopify and pay $30 per month, personally I think custom built websites look worse more often than not.

 

[Kiwi_Waka]

You haven’t said what you are looking to sell, who who your target market is or where they are based. All of this makes a big difference to your requirements.

No idea. I bought a domain, registered a limited company and opened a business bank account to work as a contractor when I return to the UK in June. However, what I do definitely falls within IR35 so there is no longer any real benefit to working through a limited company once I get caught in that. So, I figure I'll use the company for something else. Don't know what it will do or what it will sell but that will come as I do more research, planning and visit a few trade fairs. I doubt Bill Gates used this approach when he formed Microsoft.

but the off-site SEO is an ongoing thing that needs regular work and msintenence

I don't plan on doing a lot of this myself. Any thoughts on using a part time marketing student or freelance writers to produce regular content and updates to social media?

An 8k website won't look any different than if you sign up to shopify and pay $30 per month, personally I think custom built websites look worse more often than not.

WooCommerce is a free WordPress plug-in that is used by hundreds of thousands of websites (if not millions) and has no ongoing costs.

I will look at all options before making a decision. This may turn into just a pet project for me to fill time and learn new things so if that happens I will certainly go down the cheaper route i.e. Wordpress / Shopify

 

[1977]

For what it’s worth OP I’ve had Magento websites in the past and will now only be looking at Shopify for future projects as they’re perfect for everything I need in so many ways, from the apps that allow you to quickly and easily add Schema to hooking up with “proper” e-commerce fulfilment centres.

Magento is good but needs constant attention and really good hosting. You need to be looking at spending at least £1500-£2000 per year on hosting.

 

[dan19900]

No idea. I bought a domain, registered a limited company and opened a business bank account to work as a contractor when I return to the UK in June. However, what I do definitely falls within IR35 so there is no longer any real benefit to working through a limited company once I get caught in that. So, I figure I'll use the company for something else. Don't know what it will do or what it will sell but that will come as I do more research, planning and visit a few trade fairs. I doubt Bill Gates used this approach when he formed Microsoft.



I don't plan on doing a lot of this myself. Any thoughts on using a part time marketing student or freelance writers to produce regular content and updates to social media?




I will look at all options before making a decision. This may turn into just a pet project for me to fill time and learn new things so if that happens I will certainly go down the cheaper route i.e. Wordpress / Shopify

Well up to you, you can search for examples of shopify sites though, it's not hard to make them look good.

The best advertising depends on what you're going to sell.

Instagram influencers often work well for things like fitness, jewellery, make up etc.

SEO works to an extent for anything but better if it's products that people are actually searching for that aren't too hard competition, my first big business was vaping, a lot of people search for the actual product and the competition at the time was mostly new websites so that worked well. Selling random clothes or something than it won't work so well.

Paid Facebook/ Google ads often work well for medium-high value products, selling products for less than 10 pounds and you probably won't ROI. Tough to ROI (but possible) with anything as Amazon etc dump money on it to get long term customers.

Randomly posting on Facebook/ Twitter probably won't be much use, Facebook don't display business pages to many people anymore as they want you to pay for their ads.

 

[Inva]

The quality and value of the product will determine your success or failure, not the website (unless if it's horrible).

An 8k website won't look any different than if you sign up to shopify and pay $30 per month, personally I think custom built websites look worse more often than not.

The main point in custom is not the looks but the functionality. And obviously you are wrong, a good design by a good designer will stomp Shopify 100% of the time. Furthermore, the design depends on many factors. A lot of the time a design comes out badly because of buyer decisions.

 

[Kiwi_Waka]

A lot of the time a design comes out badly because of buyer decisions.

Yes, which is why I need to do a lot of more planning before I even start talking to designers. I've worked on projects where insufficient planning led to constant change requirements which led to the project being scrapped and a lot of time, resources and money wasted.

 

[Cloud Commerce Pro]

I'd argue that even on-site SEO isn't a one-off expense - but if you're building a new site, the vast majority of the on-site work you need will be done up front.

The issue is that standards shift and change - a website built to state-of-the-art SEO in 2014 is outdated now. It might perform pretty well if its competitors are the same rough age, but if they've been revamped, you're likely to slip over time.

It's worth keeping an eye on this, but your goal is to get to a point where no changes need making for a reasonable length of time.

 

[Jamie Monumental]

Google ads will generate the highest return however a short term solution as reliant on continuous investment. Coupling SEO and AdWords would give both long term and short term results - check out Monumental Marketing