How to Plan and Budget for an eCommerce Website
An eCommerce website is crucial for your business. It drives sales, marketing, and represents your brand 24/7.
For an online store, the investment you put into your website determines your returns. Unfortunately, many entrepreneurs expect high returns while investing too little in their website. To succeed, it’s important to have realistic expectations and accurately budget for the launch of a successful eCommerce store.
Before starting an eCommerce business, follow these tips to plan your site and budget your startup costs effectively.
Budgeting for the initial website build
Compared to informational websites, eCommerce websites require a larger investment due to their complexity. You need to consider designing and building product pages, setting up shipping and payment processing, and ensuring proper security protocols for customer data. All of this requires time and resources, whether you build the site yourself or with a web agency.
Choosing an eCommerce platform
The choice of eCommerce platform determines your initial investment. The two most popular platforms currently are WooCommerce and Shopify.
WooCommerce is a free platform that seamlessly integrates with WordPress. However, integrating it on your own is not easy, and you may need to hire a skilled developer. You’ll also need 2-3 WooCommerce extension plugins, costing $50-$100 per year per extension. A significant advantage of WooCommerce is its open-source nature, which means there are numerous specialized web teams available for support.
Shopify, on the other hand, is a proprietary eCommerce platform that requires a paid account to build your online store. Shopify offers clear pricing based on your required features, while WooCommerce features may require varying development work. Keep in mind that Shopify has limited customization options compared to WooCommerce.
Choosing between WooCommerce and Shopify depends on your specific needs. Switching between platforms often requires rebuilding your site, so take your time to make the right choice for your store.
Template vs. custom design
After selecting your eCommerce platform, decide whether to use a pre-designed template or a custom design approach for your website.
- Market competition for your products
- Time to market and project timeline
- The complexity and customization needed for your products
Working with a web template
Both WooCommerce and Shopify offer pre-designed templates that provide a starting point for your store. Customizing a template can be cost-effective and reduce the time it takes to build the site.
Working with a custom design
A custom design approach involves creating mockups from scratch and is worth the investment if you need a high-quality design to stand out from competitors or require regular site updates. Custom designs are also necessary for products or services with complex requirements.
Products and subscription services that frequently change often require more design and development work, making a custom approach more suitable.
Selecting a Merchant Processor
A payment gateway allows you to process credit cards on your website and affects ongoing costs.
The three most popular payment gateways are:
All these gateways integrate with Shopify or WooCommerce. Processing fees for Stripe, Paypal, or Authorize.net are currently 2.9% plus $0.30 per transaction. Additional setup fees may apply depending on your choice of payment gateway.
For example, WooCommerce offers a free Stripe plugin, while the WooCommerce Authorize.net extension is a paid yearly add-on. Consult with experienced developers to choose the best payment gateway for your situation.
PayPal may not be suitable for subscription services that require recurring payments, so consider Stripe or Authorize.net instead.
Planning for long-term costs
Building the website requires the largest investment, but eCommerce sites also have ongoing costs to ensure smooth operation.
These costs include:
- Hosting & SSL certificate
- Security monitoring
- Regular maintenance & development support
Your choice of eCommerce platform affects your monthly payments for these services. Shopify offers monthly plans based on your website’s traffic, security, and support needs. WooCommerce websites have similar needs but allow you to choose security protocols and hosting services. Select the best hosting solution for your site to avoid poor performance.
Also, budget for regular plugin updates to maintain security on your WooCommerce site.
Jumpstart your eCommerce business
Planning and making informed decisions at the beginning will set your business up for success. Consider your business plan, financial forecasts, and all the needs of your business while making choices. If funding is a challenge, start with a coming soon landing page to validate your product or service. Having results can attract investors and justify spending more upfront for a high-quality website.
If you prefer not to pursue a loan or funding, take small steps to build a solid foundation for growth. Carefully review your eCommerce site options and envision your business’s future to understand the investment and avoid surprises as your business grows.
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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
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