The popularity of online shopping is growing. It brings enormous revenue to entrepreneurs and demonstrates great potential. Still, it is hard for entrepreneurs to predict e-commerce website cost and that’s the reason we have analyzed our experience and decided to develop this definitive guide for you. It will help with software product price estimation. Ready? Let’s go!
Online shopping isn’t just about getting new products, clothes or furniture a customer wants. This is about seamless, pleasant and brand-new experiences; this is about convenience and the immediate satisfaction of demands. Online shopping is about a huge amount of time saved by Internet users. And this is why they prefer this option over traditional shopping.
The number of digital buyers is growing annually.
Now in 2020, more than 1.8 billion buyers visit online stores which is more than 25 percent of mankind!
According to estimations, the number of people who prefer buying things online will reach more than 2.1 billion by 2021.
More and more manufacturers are noticing positive results from doing business online and are shifting their businesses to the World Wide Web. Why wouldn’t they? This step allows them to save money on rent and sales managers' salaries; migration to the digital galaxy gives them a chance to reach out to customers that have never heard of certain stores before. Furthermore, online trading destroys the geographical borders: now, you can sell your products to customers living thousands of miles away from you.
These facts are what makes the topic so hot and drive industry growth and development. Many business owners worldwide are ready to invest their money in the e-commerce market. However, not all of them are able to estimate the e-commerce website price precisely.
E-commerce website price: a problem to solve
“What can be wrong with a website’s price?” you may wonder. “Hey, I’ll just Google it, or I’d better come to any company asking about how much does an e-commerce website cost, and I’ll get the response.” No doubt you will. However, let us share with you our observations.
Here’s a common situation: a client requests a quote from several IT engineering companies and decides to build cooperation with one that offers the lowest price. Although it seems pretty attractive at first, it turns out that this cost is not even enough to launch a small simple minimum viable product (MVP). And here the trouble begins: the business owner needs to look for more reliable, honest and straightforward partners. When trying to build an e-commerce site, he or she needs to start all over again, invest extra money and lose precious time.
This is why, when looking for a software development company, you need to pay attention not just to the lowest prices but to reasonable ones.
Due to high competitiveness in the market and the rising number of IT agencies and companies, both reliable and untrustworthy ones, there are two rather common use cases:
Too-low price for development services
Here’s the situation: you come to Typeanyname company and request a quote. You analyze the prices and they are lower than average on the local market. At first glance, it seems nice as you get an opportunity to save money. But a deeper analysis and practice proves that nothing good happens if you sign a contract with sweet, tiny prices. There are three typical reasons for a low price:
- Low level of development team’s expertise;
- Lack of experience: a development team isn’t able to estimate your project correctly and offers unexpectedly low prices to catch your attention; and
- Time estimation issues: your simple e-commerce website will be launched right after your grandchildren graduate from university.
Too-high prices for development services
Let’s say you get a price list with unreasonable sums that look more like phone numbers. This is not a good sign either, and you may try to build cooperation with a team that:
- Wants to make an extra profit and sets higher prices than a certain service may reasonably cost; or
- Brings in the best engineers that could be working at Google, Amazon or IBM to deliver a brilliant website in a blink of an eye.
When analyzing the cost to build an e-commerce website, make sure you are aware of the situation in the local market.
The main component of your expenses consists of salaries you need to pay to employees that work on the project. In some countries, prices per hour are higher; in the others, they are lower. For example, it may cost you a fortune to hire a development team in the U.S. or the UK. But you don’t have to worry: once you choose a reliable partner overseas, you get a valuable opportunity to save money and get an app of world-class quality.
The point is to define the type of cooperation you’d like to build. After that, you will be able to proceed with calculating the cost of setting up an e-commerce website. And yes, we will help you with this choice, too.
On-site vs. freelance vs. outsourcing team: Who you can rely on to minimize e-commerce website development cost
Why JS? Well, according to GitHub, this is the most popular programming language. Additionally, it is one of the best tools for e-commerce website development. And finally, we just love it. So, let’s go:
On-site website development
This is a quite convenient and, at the same time, greatly challenging option. An on-site team is a team that works right in your office, a team you can have a cup of coffee with and discuss critical project features face to face. Sounds really nice, doesn’t it? Only we haven’t mentioned yet that, first of all, you need to hire these IT professionals, which isn’t simple and cheap. These are the factors that make the cost to build an e-commerce website grow:
- You need to rent an office;
- You need to invest in powerful hardware; and
- You need to find a recruitment specialist and not only pay another salary but also invest in numerous recruitment channels and specific software.
So many needs, so few results. Depending on the market your business operates in, it may be really hard to find a senior specialist. And on top of that, the salary may be shocking.
Our verdict: an on-site team is nice but the most expensive option available.
Find out how much you can save by hiring a remote teamGet a quote
Freelance developers and the cost of building an e-commerce website
Freelancing is a great occupation if a person has not only strong hard skills but also well-developed time management and other soft skills. Many of our customers complain about the low competence of the freelance specialists they have been working with; thus, you should pay attention to the following things:
- Interviewing a freelance developer;
- Feedback from previous colleagues and partners;
- Time zones he or she works in; and
- Tasks and responsibilities he or she is able to handle.
Working with a team of freelancers, you need to be prepared to invest an enormous amount of time in team management. Of course, you can hire a competent project manager and delegate this task but keep in mind it will cost you a lot, too.
We have analyzed some of the top JS developers’ profiles on Upwork. Their hourly prices vary between $35 and $70 per hour. Surprisingly, we even found a profile of a JS specialist with proficiency in e-commerce with the desired payment of $250 per hour. At the same time, some developers charge $20 per hour or less.
Analyzing this information, we can say that it costs approximately $67,000–$134,000 per year to cooperate with a full-time freelance developer. In some particular cases, the price increases up to over $400,000.
You must pay a salary to your on-site specialists as long as they work for you. The situation with freelance employees is different: you don’t have to pay them if there are no tasks for them. At the same time, developers working on a freelance basis may leave you at any time, whether they have finished their work or not.
If you are ready to devote time to in-depth interviews and invest money in project management, cooperation with freelancers may be a convenient and affordable option for your business development.
Outsourcing company as your partner: how to cut your e-commerce website development cost
Outsourcing is a convenient option; both small companies and industry leaders are turning toward it as a viable solution for their e-commerce needs. It allows them to delegate engineering tasks and focus on critical business development processes, without having to keep an eye on what is going on with the sprint (unless you want to, of course). You hire an entire team of experts at once, with no need to waste time on a bunch of interviews. You get a ready-made solution with minimum effort.
You sign all the essential agreements, contracts and non-disclosure agreements (NDAs) so the cooperation is reliable. In addition, you can request previous clients’ reviews, portfolios, etc. to make sure you make the right choice.
Depending on the outsourcing destination, developer’s salaries vary:
- $90–120 per hour in Western and Northern Europe;
- $40–75 per hour in Ukraine;
- $15–45 per hour in Asian countries.
As you can see, the destination you focus on may have a great impact on the cost of e-commerce websites. But remember that the developer’s salary isn’t the only factor that defines a price for e-commerce websites. A software product launch is a multicomponent process; each step, each small decision, and each action require additional investments. Besides this, the complexity of the app you produce makes a difference, too. So make yourself comfortable and get ready for the next chapter, which describes each component and every expense you will face during different stages of website production from scratch.
The main stages you need to invest your money in when developing an e-commerce website
First and foremost, let us make things clearer: the estimations we are ready to provide you with are pretty rough. No one can tell you the precise price an e-commerce site will cost until you design an idea and share it with the engineering team. There is no chance someone can read your thoughts, predict your intentions and answer the question “How much does it cost to build an e-commerce website” immediately. If someone does, run away. They want your money, not your product launched.
However, we've done our best to increase your awareness. We cut the entire process into manageable chunks, and here, you can find information about how much you'll need to invest in each stage:
- Stage 1: the very beginning, or things that become a part of the cost to create an e-commerce website before the engineering process begins;
- Stage 2: active development where software design, development, and testing processes take place;
- Stage 3: e-commerce website marketing and advertising activities; and
- Stage 4: product maintenance.
Let’s take a closer look at each of them.
Cost at the initial stage
In the beginning, you need to invest in the following things:
This is your brand’s online representation, and you need to buy an appropriate name to allow users to access your website. There are many domain name registrars, and we would like to recommend Bluehost or GoDaddy.
Cost: Starting from $8 per year
Hosting is a thing that keeps your website alive. If your hosting is down, no one can access your website. Its price depends on the website’s complexity and load. Along with this, the type of web hosting you choose may have an impact, too:
- Shared hosting is the cheapest option available, with hassle-free maintenance but numerous limitations and security concerns;
- VPS hosting is a type of shared hosting that demonstrates advantages like high affordability and scalability, as well as great IT security and customization features;
- Dedicated hosting provides you with full control but requires the participation of a qualified system administrator: the more experienced specialist you hire, the more seamlessly your server on dedicated hosting runs; and
- Cloud hosting runs on a group of servers and demonstrates spectacular reliability and many other great features.
Cost: from several hundred to a few thousand dollars annually.
Tools you pick for design and development have their prices, too. For example, simple SaaS solutions for high-quality web store development may cost from $20–$30 or even present free functionality. At the same time, the open-source Magento Enterprise package with great configuration and customization features costs around $5,000.
Cost: varies greatly, from $20 to around $5,000.
Although we call it “initial cost,” keep in mind that these expenses are repeatable. You need to pay for a domain name and hosting usage as long as you run your website.
Active development stage
This section gets you much closer to the answer to the “How much does it cost to build an e-commerce website” question. Here, we will talk about website design, development and testing cost, and how functionality affects the cost of an e-commerce website.
E-commerce website design services
An attractive and intuitive design gives you the key to your customers’ hearts. It plays a huge role in your future success and requires the participation of a skilled creative team. Typically, the process starts with deep research, wireframes creation, and UI/UX design. The more complex and unusual the design you want, and the more animation and visual effects you would like to add, the more your e-commerce website design cost will be.
Website design cost: $2,000–$8,000
Building a product
How much does a good e-commerce website cost? The process includes front-end and back-end construction.
- Front-end and its price
Cost: $1,000–$10,000 or more.
- Back-end and its price
This is the development of your app’s heart or server-side. Unseen by the end-users, it is usually more expensive; it takes more time and effort to build. The crucial thing is that the quality of your app’s server-side impacts the quality of your app. The back end defines how the entire system works, so you shouldn’t try to cut costs on this component of the process.
- Testing specifics
To make sure you create an impeccable solution, you need to thoroughly test it and invest in quality assurance and quality control. These processes are essential and you need to consider them when calculating how much it costs to create an e-commerce website.
The complexity of website features and why we talk about it so much
Now it is time to open the curtain on a line we have used so many times in our article. The more advanced functionality you plan to build, the more money you need to invest. A simple landing page or company page won’t be so expensive, but when it comes to e-commerce software the price may be higher due to a bigger number of essential features:
There are certain website sections like user profiles, shopping cart, checkout, filter, listings, reviews and analytics that you have no choice but to implement on your website pages. Typically, this functionality requires a minimum e-commerce website development cost, and all the advanced features will increase the development price.
Payment is an essential part of the functionality. However, it is not so easy to connect your website to Stripe or Braintree. There are many services that may serve you well but comprehensive understanding is required to decide on the most suitable one. This is why you should include payment gateway comparison research on your to-do list.
If you want to connect your e-shop to other websites, social media, content management systems (CMS's), Google Drive, etc., you need to plan a special budget. The price will slightly rise.
These guys are quite popular nowadays. On numerous websites, customers can start the initial conversation and get quick answers from a bot. For business owners, they provide multiple opportunities:
- It takes your customer service sky-high;
- It allows providing customers and clients with needed answers immediately, anytime;
- It engages and entertains your app users;
- It collects users’ data and helps to monitor their preferences;
- It contributes to lead generation processes; and
- It saves on costs: by paying for a chatbot once, you reduce your expenses on recruiting and hiring customer support specialists, paying salaries and office rent, etc.
Augmented reality (AR) is one of the hottest e-commerce development trends in 2020. AR features on your website will both entertain and engage potential customers. For instance, AR allows customers to try on the desired apparel using one simple app. It pushes a customer to the decision, helps to catch their attention and brings many other benefits. The technology is relatively new and has powerful potential to revolutionize the e-commerce business.
Migration to mobile
Besides, we have a bonus point here. Customers love the mobile experience and spend much time browsing on smartphone apps daily. Making a cross-browser multiplatform app is significant for successful sales; it is another chance to win shoppers' attention. It increases the average cost of an e-commerce website, but the benefits are hard to overestimate.
Product promotion stage
Here, we will add some different types of expenses to your e-commerce website price list.
Website promotion and optimization is a way to keep your head above the water in the search engine ocean. These sorts of services allow you to increase and strengthen your position on a search results page. As a result, you reach out to the customers while your competitors remain unnoticed.
Price: $300–$1500 per month.
Post informative and useful content on your website and get a chance to turn interested readers into satisfied customers! Interesting articles, tutorials, insights, etc. have the power to increase customers’ trust and positively influence your reputation.
Cost: $50–$200 per article.
One more way to promote your online product is to pay for ads on different channels. Here, we cannot estimate the price correctly as it fully depends on the following factors:
- Type of ads, including social media ads, pay-per-click (PPC) ads, Gmail and Quora ads, etc.;
- Channels you use for advertising (your own e-commerce website, your company’s profile on Facebook or Instagram, publications in local magazines, mentions on TV, etc.); and
- The number of visitors who come to your website by clicking on an ad, etc.
Even when your website is up and running, it doesn’t mean you don’t have to invest in it anymore. Constant improvement, updates and bug fixing are tasks you need to handle through the entire lifecycle of the website. Support cost depends primarily on how much time a software engineer dedicates to your product.
Cost: $600–$12,000 annually.
How much does it cost to build an e-commerce website? The price depends on three critical factors:
- Developer’s salary (or, to be more precise, the development team's location and expertise);
- Tools and software-as-a-service (SaaS) products you employ; and
- The application’s complexity and features.
What components should you add to your financial business plan?
|Component of cost to set up an e-commerce website||Price|
|Repeatable costs||$20–$220 per month|
|SEO||$300–$1,500 per month|
|Copywriting||$200–$800 per month|
|Product’s support||$600–$1,200 annually|
Here is the table describing approximately how much it costs to run an e-commerce website.
|Small webstore||High-load scalable e-commerce solution|
|Total cost||Approximately $10,000–$12,000||Approximately $45,000–$50,000 or more|
Discuss the development process for your brand new e-commerce websiteGet a quote.
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