How much does an online store cost? What costs does it generate?
The list of items to consider when planning to set up your own online store is long. Frighteningly long if you are doing it for the first time. However, you will cope with everything better if – instead of moving blindly – you prepare properly. How much does it really cost to run an online store?
The fixed costs of the store will be responsible for:
- software,
- hosting,
- payment commissions,
- Business costs and accounting,
- employed workers,
- Storage, packaging and delivery,
- marketing and advertising,
- investment and development,
- additional tools and services.
Add to this list the one-time costs associated with implementing and launching a store for the first time. These include:
- Website design or purchase of a theme,
- installation and configuration,
- plug-ins needed,
- Costs associated with company registration.
Setting up an online store – which platform should I choose?
Wanting to open an online store, you need to have access to a “foundation,” i.e. software that will allow you to build this store. There are three ways to do this. You can use an off-the-shelf, SaaS-based sales platform, set up a store using free open source software, or have an entire store prepared specifically for your business. What are the differences between these options?
Sales platforms
Sales platforms offer simple operation, a range of useful features and the availability of support in exchange for a recurring fee. An unquestionable advantage of such platforms is the ability to configure the store yourself, and the fact that the server and hosting are often included in the package.
Another advantage is access to technical support, which can be very helpful – especially if the entrepreneur decides to use advanced integrations.
The list of advantages is crowned by flexibility in plan selection: many sales platforms offer several different plans, differing – for example – in the availability of additional services. As a result, smaller companies that don’t have big requirements can use an established and efficient platform without having to pay for features whose potential they can’t use. On the other hand, large entities have the opportunity to buy access to a real combo of services that will open up huge possibilities for their store.
Examples of solutions: Shoper, Sky-Shop Shopify, IdoSell
Store in an open source model
“Open source” means that the software you use is open – free and modifiable. With open source, you have access to the source code, which means that an efficient development team is able to change and customize almost anything for your business.
Using an open source platform also means freedom in the sense of not depending on a SaaS platform. You put the store on your own server and use your own hosting. What’s more, if you need to make changes to the structure of your store, you don’t have to wait for the platform you are a customer of to do it. You can act at any time. On the other hand, however, the changes will always be on your mind.
Examples of solutions: Magento, PrestaShop
Store designed from scratch
Imagine being able to create exactly the kind of store you envision. You can achieve this if you commission a store to be written from scratch, just for your company. However, this is an extremely expensive solution – not only in the initial phase (you can pay up to tens of thousands of zlotys for just designing the store), but also later on. In essence, this means that you will need a person or a team of people to take care of the technical side of the store.
What costs do you have to reckon with if you plan to have your store built from scratch?
- Design – this is where you need to start, because the more complicated the design, the longer the implementation time and the higher the price. Without a design, no one will even prepare a detailed quote for building a store.
- Hiring programmers and/or agencies – implementing the ideas contained in the project requires experience and technical background. For this reason, the programming and implementation of the store is usually outsourced. Whether you perform this task in-house or use outsourcing, the cost of programmers will be felt – even for large companies.
- Server and domain – every store, even an online one, must have a location. In the case of an e-store, you need to take care of the server and domain, so you have somewhere to store data and customers can easily find your store.
- Troubleshooting and ongoing maintenance – be sure to set aside funds for costs associated with the day-to-day operation of your store. Since you’re betting on your own solution, you’ll have to make sure the store runs smoothly all the time yourself. If something breaks, your company is responsible for all troubleshooting costs.
- Development costs – every new feature you want to introduce costs money. Your team of specialists (or the agency you hire) must plan for the cost of redesigning, programming new features, testing, launching and monitoring for bugs.
How much does hosting and a domain cost?
Hosting is a service in which the owner of a server provides space on it for data. The larger the store, the more reserved space it needs, and thus it has to expect higher costs.
However, the matter does not end with the sheer amount of available disk space. Hosting providers besides offer a number of extras, such as SSL certificate, unlimited transfer (on higher plans) or a higher limit of files that can be uploaded to the server. As a result, hosting offers are diverse, and you can choose exactly the plan your store needs.
The hosting costs themselves are not among the highest – prices start from as low as a few dozen, and end up at amounts of just over a thousand zlotys per year. In the latter case, we are already talking about almost unlimited plans, with huge server space.
A separate issue is the purchase of a domain. Here, too, you must prepare for a recurring fee, If you do not plan to purchase a domain with a distinctive address (some of them reach very high prices), be prepared for a cost of about 200 zlotys per year in the basic version.
Costs of running an online store – business
It is impossible to run an online store without setting up a company. If you set up a store and a company at the same time, you can count on a number of tax benefits at the very beginning of your business journey:
- The startup allowance makes you pay only the health contribution for six months, the minimum value of which is PLN 314.96 per month. However, the final amount depends on the settlement method you choose.
- Small Social Security is the solution you can use after the startup relief. For the next 18 months, as long as you meet the income criteria, you will contribute less to Social Security than standard Social Security.
- The large Social Security contribution usually takes effect two years after the business is established. As part of the standard Social Security contribution, entrepreneurs must pay a minimum of PLN 1646.47. However, if they benefit from voluntary sickness insurance, the amount rises to PLN 1773.96. It is worth remembering that this amount does not include the health contribution.
Also keep in mind accounting service fees. In theory, you can run an online store without the help of accountants, but this means that a lot of responsibilities will fall on you. Given the relatively low cost of accounting services, this is rarely a viable solution.
Commissions on transactions
The more payment methods you offer your customers, the more competitive your business will be. Both private consumers and business customers have their preferences. The ability to pay with a quick transfer or via BLIK is the expected minimum today. Customers also increasingly expect the availability of deferred payments or convenient interest-free installments.
From the perspective of someone running an online store, however, you need to pay attention to the fact that payment service providers charge for their services – usually in the form of a commission on each transaction. Take this into account when setting prices for goods and services.
Employment of employees
As usual, everything depends on the scale of the venture. If you are just setting up an online store, have a small assortment of products and a small number of orders, you can probably manage on your own. If that’s the case, and it doesn’t look like it’s going to change anytime soon, you can confidently move on to the next point. However, if you are planning to expand or already know that you will need employees, keep reading.
You should start counting the cost of hiring as soon as you prepare a job offer. Recruitment can be expensive, especially if the search for the right person takes a long time. Once you’ve succeeded, you should offer the employee competitive salary terms, pay for insurance, provide a workstation, etc.
Warehousing, packaging and delivery
Storage
Storage space is not free. If you use your own property, you do not incur many additional costs, but you still have to pay taxes (for example, for the garage). However, this is a very advantageous situation, as it can de facto relieve some of the burden on your budget. If you dedicate a room or part of your owned property for business purposes, you can include the cost of its maintenance in your deductible expenses. However, if you do not have adequate space, you are left with buying, building or renting a warehouse.
The cost of this investment can vary. The cheapest – in the short term – will, of course, be renting, so it’s worth starting there. Over time, as your business grows, you can think about something of your own. Prices for renting warehouse space depend on its type (a warehouse on its own, a separate sector in a shared warehouse, a container, a garage), area and location.
If you’re looking to save on storage costs, check out a dropshipping service. This is an arrangement in which you store the goods you sell either at a distributor or at a warehouse designated by the distributor. Depending on the nature of the arrangement you make with the service provider, he may even be responsible for delivering the goods to customers. Dropshipping, however, has its drawbacks – you will have to pay for the storage and shipping service, and besides, this way you deprive yourself of control over the process of packing, sending and shipping packages. In some situations this can be a favorable solution, but it is also sometimes negatively perceived by end customers.
Packaging and shipping costs
If you decide to take a customized approach, you need to include packing materials in your calculations – cardboard boxes, tape, labels, parcel description utensils. And don’t forget about courier services. As with payment methods, customers also appreciate the wide choice of delivery methods. Courier, delivery to a pick-up point, personal pickup – these three options are checked by consumers most often. In recent years, pick-up points – parcel machines or the ability to pick up a parcel in a store – have become particularly popular. This allows people who work outside the home and do not have the opportunity to wait for a parcel to be delivered, to pick it up at their convenience.
Also, don’t underestimate the importance of providing a personal pickup option. Statistically speaking, customers use it the least often, yet its availability inspires confidence. Or put another way: the lack of a personal pickup option raises reasonable suspicion among customers.
Marketing and advertising
This is an extremely broad topic. Marketing costs can just as easily be very low as they can be a sizable portion of your store’s monthly budget. A lot depends on the expertise you have, the target audience you are targeting and the scale of your venture.
Social media advertising, a search engine positioning service, maintaining a store’s social media profiles, a company blog or YouTube channel are all activities that consume resources in one way or another.
At the same time, it is not easy to abandon any of these channels for reaching customers. Social media and SEO seem to be particularly important pillars of marketing for online stores, and the intensity with which you promote your e-store’s offerings in these places depends on the target audience you want to reach.
Most of these activities you can do on your own – running social media (such as a TikTok account), a blog and even a YouTubes channel requires knowledge, commitment and time, but thanks to the wide availability of courses, tutorials and free materials, you can learn how to do this at any time. Often, however, the optimal solution will be to hire a marketing person or hire an agency. The cost of such cooperation, however, depends on a number of factors by which it is difficult to determine even an estimated amount you should set yourself.
If you want to learn more about e-commerce advertising opportunities, check out our guides:
Investment and development
No matter what type of online store you choose as a first step, development will be expensive. Introducing new features, expanding your offerings, or wanting to scale your business and, for example, expand your target audience all cost money.
It is worthwhile in the early stages of running an online store to plan the next steps in development. Such a plan, although it will certainly not be bypassed by modifications, will allow you to set a clearer direction and manage your funds more wisely. Reinvesting the money you earn in expanding functionality is one of the best ways to grow your business in the long term.
It is worth mentioning at this point that in the context of the need to implement new features in an online store, the most favorable price is to install the store on a sales platform. Providers of e-commerce platforms regularly update their environment, adding new elements, adapting platforms to legal requirements, and often you do not have to pay extra for these changes. More advanced features, on the other hand, are available in more expensive plans, to which – usually – you can switch at any time during the contract.
Additional software, tools and services
Basic software for a store is often not enough. Remember that a secure and resilient e-shop needs a range of additional services and tools. These include software:
- For analytics – Hotjar, Google Analytics,
- For network monitoring – Brand24,
- For marketing automation – GetResponse, MailChimp,
- for customer relationship management (CRM) – HubSpot,
- For creating landing pages – Landings,
- for content management and optimization – Contadu, Surfer,
- For generating content, databases and working with text – ChatGPT, Jasper,
- For creating graphics for social media – Canva, Pixlr,
- For loyalty programs – smile.io, Open Loyalty.
Before you frown at the length of the above list, it’s worth remembering that some of the programs listed are, in theory, free (of course, using them for commercial purposes or using plans that are not heavily restricted requires a subscription fee). Moreover, many of these solutions are optional, especially for small stores.
However, if you need most or all of the points mentioned above, remember that there are also all-in-one solutions that combine multiple functionalities. What you need to know, however, is that true all-in-one solutions offer extremely broad feature sets… in exchange for the highest prices on the market.
Summary – how much does it cost to run an online store?
Running an online store generates many costs, but there are just as many ways to optimize them. If you are starting from a small ceiling (a small, one-person store), you can take care of most of the listed elements yourself. Only over time will the demand and number of customers increase.
When your attention will be occupied by other aspects concerning the development of your store, it will be necessary to automate some of the activities. It will also be the right time to hire employees who, on the one hand, will generate costs, but with their work will provide invaluable support for a thriving business. Good luck!
