Developing an online business is often more economically viable than opening a physical store, as it avoids the costs inherent in maintaining a physical location. However, there are still essential expenses such as domain registration, package shipping, and the use of a content management system, among others.
When embarking on the creation of a digital business, it is imperative to take into account several crucial variables.
Would you like to know in detail what factors to consider when setting up an online store? Let's take a closer look at the basic costs and additional investments associated with establishing an online store, so you can have complete control before launching your project.
Breakdown of costs for setting up an e-commerce business:
Domain Registration:
Obtaining your own domain name is essential for establishing a unique online identity. Various providers, such as OVH, DonDominio, and GoDaddy, offer services with rates that generally range between €5 and €20 per year.
CMS or Ecommerce Platform:
Previously, creating a website or online store required programming skills. However, thanks to e-commerce platforms or content management systems (CMS), like Palbin, coding skills are no longer necessary, as they offer simple and intuitive interfaces so you can create your own online store.
There are two main types of platforms for setting up an online store:
Ad-Hoc or Hosted Platforms: Ideal if you have a generous budget and want a custom design. Examples include WooCommerce and PrestaShop.
Cloud or SaaS platforms: More suitable for those with less technical knowledge and smaller budgets. Notable examples include Palbin and Shopify.
The costs associated with these platforms vary. WooCommerce and PrestaShop can range from €1,000 to €6,000, while Shopify has a basic monthly plan of €27 plus a percentage per transaction, and Palbin offers a basic plan of €30 per month with no additional fees.
Additionally, there are other options such as Magento, with budgets starting at €30,000, and custom developments on platforms like WordPress, which generally cost around €2,000 if hired through freelancers.
Additional Features:
Various features, apps, and integrations can significantly improve your chances of online success. Some of these features may include integration with external tools like Google Analytics, direct messaging via WhatsApp or Zendesk, and shopping cart recovery. These integrations can cost hundreds of euros on platforms like Prestashop or between €5 and €10 per month on Palbin.
Design and Content:
Once you've secured your domain and platform, it's crucial to create an engaging design that will retain potential visitors. Design not only impacts the user experience but also customer satisfaction while browsing your website.
A quality design can cost anywhere from hundreds of euros on platforms like Palbin and Shopify, which offer free templates to get started, to thousands of euros on custom platforms like Prestashop.
Don't forget that, in addition to visual aspects, textual content also plays a crucial role in converting visitors into sales. Persuasive and compelling texts are essential.
Products:
Without a product catalog, there are no sales. Alternatives to sourcing products include having your own inventory or using dropshipping suppliers. Costs are determined by sales volume and can range from 10% to 60% of the product's selling price.
Payments and Shipping:
Payment methods are essential to facilitate customer purchases. Gateways like PayPal or Stripe may take a small percentage of each transaction. Shipping costs, which may vary depending on the carrier used, must also be considered.
Some platforms, such as Palbin, offer transportation services, such as Palbin Express, which can be managed from the same platform at slightly lower prices.
Advertising and Marketing:
Once your store is ready, it's crucial to accelerate customer acquisition and sales through advertising. Effective methods include social media advertising, SEO to improve search engine rankings, and SEM online advertising.
The costs of these services vary depending on the platform. On SaaS platforms like Shopify and Palbin, advertising services can range from €180 to €250 per month, while on Ad-Hoc platforms like Prestashop, costs are generally higher, with a minimum of €400.
Budget to Start an Online Store:
In summary, the initial budget for an online store can be broken down roughly as follows:
CMS or Ecommerce Platform: From €30/month on SaaS platforms
Extra Features: Additional, non-essential costs that may vary and can be avoided.
Design and Content: Online store design customization from € 200.