In Ecommerce - just as with any other
business – one of the first questions you might ask before getting
started is: "how much does this all cost?" After all, you're
more than likely looking to make more money – not
lose it! - and a clear understanding of your costs is super-important
in helping you hit your goals.
whole 'what does it really cost?' thing
is a question we're often asked, so we thought we'd take a look at
some of the major expenses you'll face should you take that plunge
into selling stuff online...
Marketplaces like Amazon & eBay
The obvious place to start selling stuff is on a high-traffic website
like Amazon or eBay. For beginners, this can be a good place to
start. It's free to join and you'll get great visibility for your
products, positioning them in front of a vast audience, which – in
turn – can help boost your sales and acquire new customers.
you'll also be subject to marketplace
which are deducted as a percentage of each sale and can dramatically
eat into your margin. Startups and private sellers can expect to
cough up anywhere between 3%
of the value of each and every transaction, so proceed with caution!
We'll talk more about transaction fees later on.
Coupled with the fact that these sites also offer limited potential
for you to display your brand, communicate with customers and synchronize your product inventory, it's pretty apparent that you will need
your own online store to reach the next level.
Ecommerce store: Setup Costs
So, the next logical step is to set up your own store. But where do
you start and how much does it cost?
it's easier than you may think. The
first thing you'll need is a Domain
can search and buy from vendors such as Go
The good news is, registration will often set you back
less than ten dollars per year –
a fairly modest investment for something that's so important.
you'll need to decide on an Ecommerce
Generally you can expect to pay for this on a monthly basis, and it's
important to find a package that suits your needsright
well as having the capacity to grow with your business in the
could sign a 12 month contract to use a platform that is absolutely
perfect for you right now, only to find that you've outgrown it
within 3 months. Not ideal! Here at AmeriCommerce, we offer 5 different packages
to suit different needs and budgets, from $24.95
our clients are free to change their plan at any time.
websites require cosmetic beauty, powerful functionality and water-tight
security on a level that simply isn't always necessary for other
types of websites.
could pay extra and have a custom website
built for you, or, as a slightly less expensive option, you could
simply choose a platform which offers themes.
You have choices when it comes to security, too. The default option
for our stores is to use our free, shared SSL certificate...but you
can pay extra to purchase a dedicated certificate if you have the
budget. Find out more.
This can be a real confidence-builder, which is always a big help
when trying to convert visitors.
cost you may find associated with an Ecommerce platform is
other words, every time you sell something, your platform provider
takes a couple of percent of the transaction value which, again, can
hurt your margin. Here
at AmeriCommerce, we don't charge transaction fees – on any of our
money you make when you sell stuff is yours to keep! This can make a
very healthy difference to your bottom line.
Business: The Logistics
your store's been setup, designed and published, it's all about the
logistical costs of your business; buying
stock, shipping it, paying taxes,
you decide to stock inventory,
you'll need to consider the costs of not only buying,
products. Do you have room at home for storage, or do you need to
consider acquiring some extra storage space? Stock your own inventory also means
you'll need to ship it yourself; this is an essential cost to factor
into your business plan.
on the other hand, you utilize dropshipping,
it's all about calculating the overall cost of the order fulfilment
and ensuring you factor in enough margin for yourself to make it
worth your time.
another important consideration. Make sure you're familiar (and
compliant) with the tax laws in your state, and keep up with latest
developments – for example, the MarketplaceFairness Act
is a proposed piece of legislation that will see radical changes in
how online sales are taxed.
element of paid online marketing is definitely advisable as you grow
your business. Check out some of our other blog posts
and our e-book 21Tips to Thrive in Ecommerce
to find out more!