How Much Does it Cost to start an Ecommerce Business

Sam Thomas avatar
Sam Thomas Updated: January 01, 2021

Share:

How Much Does it Cost to start an Ecommerce Business

Are you planning to start your own ecommerce business? If you’re wondering how much it costs to begin you may be surprised. $50.

Yep you read that right. If you have 50 bucks in your pocket, you can self-fund your own ecommerce store right now.

Granted this is the minimum required, but if you’re serious about it there’s nothing to stop you starting right now. So, let’s look at the bare essentials you’ll need, and then at the extras which can boost help to boost your business.

Table Content

The Must Haves

There are four fundamental ‘must haves’ on our list. Domain name, hosting, stock, and payment processing.

Your Domain Name

The name of your website is your domain name, also called a URL. Google.com, Amazon.com, Spotify.com are examples of high-profile domain names. Obviously, those are already taken, and you’ll need to brainstorm your own domain name.

You can buy domain names from domain registrars like GoDaddy and NameCheap. As long as the URL is available you can buy it. You may need to keep trying as short domain names are usually taken already.

Expect to pay anywhere between $0.99-$15 per year for your domain name.

The last part of your domain that comes after the dot is called the top-level domain (TLD), such as .com, .org, .shop, etc. While you don’t have to get a .com TLD, they are the easiest to remember.

Hosting

Without a website server to host your domain, you can’t connect it to the internet. Hosting providers cost between $1.50-$300 a month.

There are four types of hosting providers to choose from.

  • Share hosting: This is the cheapest service available. Your website will be stored on a physical server which you’ll be sharing with other users. It’s a great choice when starting out as you won’t have much traffic coming to your store anyway. Starts at $1.50 per month.

  • Private hosting: Similar to shared hosting, but instead of sharing the server you have it all to yourself. Because you don’t need to share any resources, you’ll enjoy faster speeds and can have more visitors at once. Usually starts around $100 per month.

  • Cloud hosting: Instead of using a physical server, cloud hosting uses virtual servers to host your website. When using cloud hosting, you can quickly scale up your hosting when needed, and they’re typically faster than physical servers. Starts at $10 per month.

  • Ecommerce platform hosting: All-in-one ecommerce platforms like Shopify and WooCommerce have their own hosting services. Often, they’ll throw in a domain for free as well. Starts at $25 per month.

Stock/Inventory

When your virtual store is up and running you need something to sell. There are two ways you can run an online store, and one is much cheaper than the other, and involves less risk.

Dropshipping

With the dropship model, you don’t need to buy any inventory and store it beforehand. Instead, you work directly with a supplier who takes care of all the merchandise and shipping. When an order comes in through your website, it’s sent to the dropship company, who then ships the order straight to the customer under your business name.

The significant advantage here is you don’t need to pre-purchase stock and store it before selling it to customers.

There are a few disadvantages, however.

  • The dropship company takes a fee out of every sale
  • You may not have full control over the packaging branding and delivery times
  • You can only sell items which the dropship company has in stock

Manage Your Own Inventory

The second way to run your ecommerce store is to buy your own inventory. Using this method will cost you more initially as you need to pay upfront for your merchandise, store it, and then pay the delivery fees for receiving it and sending it to customers. But you have greater control over the items you want to sell, including the ability to brand your packaging as you see fit.

Process all Your Payments

Having a payment processor is vital if you want to sell items online, otherwise how will you handle transactions? Ecommerce platforms with their own payment processor like Shopify, and processing companies like Stripe and PayPal will charge 2-3% plus a small fee per transaction. While this won’t eat into your starting costs, it’s still wise to be aware of processing fees and manage your prices accordingly.

If you have $50 or less, you now know what is needed to start your own ecommerce store. Be sure to check with your local government about any business steps, such as opening a business entity if required as well.

Give Your Site a Boost with These Extras

You can give your ecommerce store a big boost by using some of these extras. They are not mandatory but will go a long way in improving your overall sales.

Logo Design

Having your own unique logo helps your business to stand out and look professional. After all, a logo is the visual representation of your business and will help customers view you in a positive light.

You can hire a professional through an agency or online marketplace or there are also free logo maker options. Before you start, check out some of your competitors for inspiration and find trends popular with your customers.

Online Marketing

Once your online store is up and running you need to attract customers. There are lots of ways to go about this, and the most popular are paid online ads (known as PPC). You can post your ads on social media websites, and search engines like Google. Set yourself a small starting budget and experiment with different ideas, colors, images, and text.

The second way to attract customers online is to harness the power of Search Engine Optimization (SEO). By targeting keywords customers type into Google, you can rank your site, so they’ll see it in the search results. You can do SEO yourself or hire a professional to help you.

Professional Website Design

If you want to take your website to the next level, hire a professional designer to spruce it up. They’ll make sure that it looks great on both desktop and mobile to inspire more trust, and that it has all the required functionality so customers can navigate easily and buy your products with no issues.

Expert Product Photos

A picture speaks a thousand words. If customers can’t see your products how will you persuade them to buy it? If you’re working with a dropship company, they’ll supply you with plenty of photos to use on your website. But what if you’re buying your own stock? If you have all the camera gear and ability to do it yourself go for it. But it may be worth hiring a professional to take and edit pictures for you.

Start Your Own Ecommerce Store

For just $50 or less, you can start your own dropship ecommerce store. Once you begin to see more revenues or have a larger startup fund of your own, consider switching to buying and selling your own inventory.

Recover lost sales with proven Abandoned Cart Email series

Image Description
Recommend for you
Image Description
Abandoned Cart Recovery [Free]

Setup Abandoned cart recovery in 1-click

Learn more
Image Description
SEO Suite [Free]

Auto-optimize website elements and structure in one-click.

Learn more
proofo
Boost Sales [Free]

Boost sales: Sales Pop, Trust badges, Countdown timer, more

Learn more
Image Description
Photo Reviews [Free]

Use photo reviews to boost sales

Learn more

Subscribe

Stay in the know

Get special offers on the latest news from AVADA.

40k subscribers has been joined!

Earn $10 in reward now!

comment
iphone
go up