The cost of setting up an online shop

If you’re thinking about setting up an online shop in the UK, you probably just want to know the answer to the simple “How do I do it and how much will it cost?”.

Advice for making money online with ecommerce

There are as many different ways to sell your products online as you can think. However, what we’re after here is a simple answer, a starter for 10, not an exhaustive list of all the options. In this post I’ll give you a ‘stake in the ground’ that you can use to make some business decisions and get started.

The solution

I suggest you build the shop based on an open source platform. There are many benefits of going down the open source route:

  • you’re unlikely to be the first person to need a particular feature so it’ll probably already exist
  • you don’t have to spend ages waiting for a bespoke system to be designed, built and finessed
  • there’s no licence fee (but that doesn’t mean it’s free)
  • there are a lot of consultants who can develop the product for you so you’re not left in the lurch if you fall out with your web developer
Example Magento premium theme

An example Magento premium theme

The open source platform I’d recommend is Magento – it’s actively being developed and there’s a thriving community of developers creating themes and extensions. I’ve heard of implementations selling more than 25,000 product lines so scalability shouldn’t be a problem for most of you.

So, what’s it going to cost?

Here are my ball park figures:

Setup/one off costs

Magento licence: £0
Magento extensions: £300* (You’ll probably want to add a couple of ‘Bells and whistles’ like 1-click purchase and automatic cross-selling)
Magento theme: £200 (lots of free themes are available in the community but the premium themes are typically a bit more polished)
Domain name: £10
Initial setup, data load and design: £2000

Ongoing cost (per year)

Hosting: £360
SSL certificate: £200
Support/tweaking: £2400

Transaction fees (payable every time someone buys something)

20p + 3.5% of transaction (speak to your business bank manager if you have one otherwise look at Paypal, Google Checkout or Worldpay).

Total cost (rounded)

Year 1: £5500
Year 2 onwards: £3100

Ways to reduce the cost of your online shop

If you’re able to hack the odd bit of code and have access to some basic design skills you can remove the support costs and do it yourself. If you’ve got the time, and are comfortable with things like WordPress etc you can also install the software yourself (it’s a pretty straight-forward installer). You can also get your hosting provider to set up your certificates for you (you’ll still need to buy the certificate from someone like Thawte, Verisign etc) which means in theory you could get an online shop up and running for about £570 a year.

If you still need to reduce costs you can find hosting for less than my £30 a month (Google’s your friend here) and using a 3rd party payment system (Paypal, Google checkout etc) would mean you don’t need a certificate of your own. So my final answer for a bargain-basement-do-it-yourself cost is £190 per year.

What now?

If you’re thinking about getting started in etail check out the Magento showcase and then have a look at the demo admin section.

If you’re struggling with which way to take your eTail or eCommerce activity and would like some help and straight-forward advice, get in touch – I’d love to help.

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