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How Much Do E-commerce Websites Cost?

Ecommerce Platforms|09.07.2016

E-commerce websites come in many different forms and there are many ways to get one set up. So what are some typical costs? It's not an easy question to answer but here's an overview.

Whether you’re starting a brand new e-commerce site or rebuilding an existing one, these are the main considerations that will influence the cost:

  • What are your specific business specific needs?
  • Which platform do you want to use?
  • What expert help is available for you?

Hosted Vs Self-Hosted

Before we get too ahead of ourselves, you may be wondering about hosting. Should you host your website yourself? Or should you use a hosted platform? There are advantages and disadvantages of both. 

Hosted

A hosted platform is a piece of software that runs on someone else’s server. More often than not, you won’t have access to the code that runs your site. Shopify and Squarespace are good examples of this approach. 

Advantages

  • Easy to use - usually these have one web interface which means there’s not a single line of code to write.
  • Up-to-date - you will never have to worry about updates. With a hosted platform they will roll out changes as and when they need to. 
  • Powerful hosting - typically these companies have impressive servers and infrastructure, which means that your website will always be fast no matter how much traffic you get.

Disadvantages

  • Hardcore Customization - because you can't change the back end code, adding very bespoke functionality could be tricky on these platforms.

Self-Hosted

A self-hosted solution is a software that is run on your own machine. You create and see the code and are responsible for uploading and updating it. If you are having any technical problems you are the one who has to sort it or ask someone to help. 

Advantages

  • Customization - if you don’t like something you can change it. When you have access to the bank end code you can pretty much do anything – or you can pay someone else to do anything.
  • Ownership - You don’t own the code on a hosted solution. However if you host your own software, it will always be yours and you can stay on that platform for as long as you want and have the means to control everything. 

Disadvantages

  • Higher setup cost - you need to invest more in the beginning to find the right team for development and support. 
  • Setup and monitoring - you need to setup everything yourself and keep track of tools for monitoring the entire system. 

Still not sure? We explain it a little more here.

What do you actually need?

Before we get into pricing though, it’s important to understand the specifics of your business. It’s tempting to charge in with an all-singing, all-dancing website that features every bell, whistle and add-on available. And there’s no shortage there: every leading e-commerce platform – whether it’s Shopify, Magento, or WooCommerce – offers a wide range of apps and plug-ins to increase functions on your site. These include apps for pre-order management, social media promotion, shipping and inventory management.

Do you really need all those features though? 

Perhaps not. Not yet, anyway. You’ll only overcomplicate your website before you’ve figured out what you and your customers need. Asking for more features will increase the cost, so think about what actually serves your profitability. 

Less is more

Think of the Minimum Viable Product (MVP) model. This means starting with a basic version of your website. At this stage all you need to worry about is selling to the customer. This helps minimize risks, saves money on unnecessary add-ons, and ultimately lays the groundwork. By starting with a basic, bare-bones approach, you can launch earlier, which means you gain operational experience and gather customer feedback earlier. This will help you figure out the apps and new functions your website actually needs.

Shopify and other hosted platforms are one of the best ways of working with this model. Hosted platforms include a load of typical functionality that you’ll need when setting up an e-commerce store, like a PCI compliant checkout and inventory management, which means you don’t have to pay to re-invent the wheel. This lets you focus on finding the right design for your website, or adding bespoke features.

Call in the experts

It’s true that there’s no “one size fits all” solution when it comes to quality e-commerce websites, so eventually you’ll want an agency to help you out. 

In the long run, a professional design agency will help you make money by making your website better and by following best practice. They can help you save money too by setting up your website so that it’s easy to update.

Choosing the right agency can be difficult. Here some things to look for in an agency:

  • A commitment to increasing sales and an understanding of how to turn visitors into customers on all device types.
  • Great customer reviews and a high rating on Google – the only way of ensuring you’re working with a real market leader
  • A proven track record for developing bespoke projects.
  • Customer testimonials on their website.
  • Clear fixed pricing and schedules that work to your requirements.
  • Honesty – if you think an agency is only telling you what you want to hear, it’s possible they’re not being upfront about how tricky setting up an ecommerce website can be!

How much do e-commerce websites cost?

So now we’ve looked at how to assess your business’s needs and find an agency that works for you, there’s only one big question left – just what will it cost you? There is, of course, a wide range of pricing available and just as there’s no one size fits all in terms of website design and functionality, this is also true of pricing too. We’ve done our best to distil some benchmark rates to help with your decision making.

Design and build

  • Around £2k - £5k for a very basic site from a small agency or freelancer, probably built on Shopify or Wordpress.
  • Between £30 to £50K for something more sophisticated that is built for you by 5 - 30 person agency.
  • £50k - £300k for more complex projects
  • £300k+ when working with large agencies

Licensing/software fees

  • If you use a hosted solution like Shopify or Squarespace, you won’t pay an initial cost but you will have monthly fees between $30 and $300/month. This fee includes upgrades and security updates, which you’ll need to pay someone else to do on a self-hosted solution.
  • Wordpress is open-source so it’s free to download and install. You’ll need to host it yourself.
  • Magento has an open-source version but also an enterprise version, with a license fee of around £15k/year. You’ll also need to host this.

Hosting

  • The hosted solutions will include the hosting cost in their monthly fees.
  • You’ll need to host the other solutions. The safest way is to use a ‘managed’ solution like Rackspace, where a technical support team is on hand 24/7 in case you encounter issues. Managed server costs can vary between £350 and £2000 per month depending on how much power you need. If you expect a lot of traffic you’ll need to spend money on servers. 

Adhoc work

For a hosted website the pricing structure is a little different and there are several things to consider:

  • Web design agencies can charge between £40 - £150 per hour. The advantage is that their capacity is more predictable and they’ll have the skillset you need to get your project done, but having that skilled team at the ready comes at a cost.
  • Freelance developers can cost anywhere from £15 - £70 per hour depending on their skill set and experience.
  • Offshore developers are usually the cheapest option at £5 - £20 per hour.

However, with all of these options are pros and cons, so be sure to do your research and be aware of any offers that sound too good to be true.

When agreeing on a cost, do ensure that the price quoted is the total cost and that there are no hidden extras. An e-commerce website is a huge project and will inevitably take time to perfect. Before anything you need to think about exactly you want and need from your ecommerce site and then ensure your designer/developer will be able to deliver it.

The real answer to the question “How much should an e-commerce website cost you?” is simple: nothing’s for certain. Every business is different, and every business develops in its own way. As an extension of your business, the e-commerce website will reflect that as will the money you spend on it.

If you’re interested in a new Shopify website, do say hello.

How can we help?

Get in touch to discuss your e-commerce ambitions and we’ll help you get there.

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