The Internet is still a vastly new and exciting terrain. More and more are budding entrepreneurs tapping into the web to make their fortunes. In the last year alone, e-commerce businesses raked in over $200 billion in revenue. This can be from online stores, Internet services, and more. In addition, more consumers are visiting websites for their shopping needs, which are making brick-and-mortar establishments more and more obsolete. If you are thinking of starting an e-commerce website it is important to know how much money you need to get started so that you can begin making your initial financial forecasts. Depending on the size, scope and sophistication of your business, the start up costs can differ. Here are some ways you can estimate how much start-up capital you will need to start an e-commerce website.
- Your first expense to consider is domain and website hosing. Depending on the size of your business, the more website hosting will be. If you expect a surge in daily traffic you will need to purchase a plan with the most bandwidth as possible. This can start to add up over the months and can cost between $5.00 and $60.00 a month depending on the platform and the plan. Usually, if you purchase a plan with a three year contract many website hosting companies will give you a significant discount.
- Another expense to consider is finding a transaction gateway for your business. This basically means that you need to find a company that can take your financial payments. There are many online options with no set up fees, but that take upward of three to 4 percent from each transaction or you can go with a set up that is connected to your bank, which can have high sets up and equally high transaction fees. In the long run, it can be smarter to go with an online option with no set up fees. You can find out more at your bank or by doing a search online.
- You also have to consider the cost of building your website too. Many websites, depending on their size, can cost a significant amount of money to build. Many big website design companies can charge upwards $100,000 for a website. You can also build it yourself by doing the basic design and then hiring a website programmer for a fraction of that cost.
- You next cost will usually be in the marketing of your site. There are many ways to purchase inexpensive pay-per-click advertisements that propagate throughout the web. You can also hire an SEO specialist who will find the best ways to increase your rankings in search engines. These costs can range anywhere between $1000 to $10,000 dollars, depending on how high you set your budget.
- Lastly, another big cost is inventory, if you have any. It can get pretty chaotic if you are storing all your inventory in your house, so it might be wise to rent a storage unit or a small retail shop that can house all your items.