How to cost your shops website?

With Australian shoppers currently spending an estimated $37.8 billion online over the last financial year an increase of 9.7 per cent compared with the year to June 2014 many retailers are now thinking of creating a website to sell their goods. So one frequent question I get by retailers “How much would a website cost?” Unfortunately, there’s no quick answer to this question.

The first point is to figure what you need. For example, if a retailer wants to get rid of a pile of dead stock, a cheap and very efficient method is eBay. Yes, you pay some high fees but eBay has plenty of traffic and a good reputation. Because they have so much stock there already you can very quickly get a feel of what price you can get, you then can crunch the figures, do a few trial runs and see how it goes. Unfortunately if you do start to sell heaps these costs do mount up. That is partly why so many power sellers on eBay do complain so much. Plus it should be said that there are major limitations on what you can do on the eBay site.

So the next step is your own site.

One of the great attractions that people see is that many of the costs in retail like, salaries, warehousing, rent, etc. will disappear. Actually, they do not magically vanish just because you sell online. The figures change, some new costs get introduced but much continues. For example, the rent is cheaper but web-designers time costs and there are ongoing costs as a website needed to be updated partly to reflect the changes online but also to adjust to your changing requirements. Still overall its a great place to do business online as their David can compete with Goliath as David's website can be just as good as Goliaths.

And you get a sales representative that works seven days a week, 24 hours a day, every day of the year selling your products that can help generate extra sales for your business.

There are many possibilities on how to set up a website, the cheapest some say is to use some free software. The problem here is often you need programmers and web designers to set it up. For example, Magento CE, a free online shop software is being actively marketed in our market space. Say you decide to install just 30 of its extensions, which is less than half and each extension takes about 2 to three hours to install. We are looking at 60 to 90 hours of work say 70 hours. Assuming a web designer is somewhere between $80 and $160 an hour, we are looking at $5,500 to $12,000. Then on top of that they need to adjust the system. Also you the user has to be trained how to use it. We are not talking a simple program here. Then there are going to be a lot more fees just to run it plus maintenance fees. The final bill could be double on a complex site.

Another possibility is to use a hosted ecommerce solution. One point I do recommend here, is make sure that the hosted computer is in Australia not just for legal reasons. It's hard to get support if you are dealing with a US company based in India, I know I have been there. The problem here is like most prewritten solutions, which are not written for you, there will be limitations. The odds too is that they will have monthly fees, transaction fees, setup fees, excess storage charges, bandwidth limitations and support fees. You will probably find the costs are much higher than you are quoted.

Lastly for a comparable cost what you can get your own online shop written, which is often what our clients do. Since its made for specifications, you can get the advantage of integration into our software, and you get much more control.

Overall, all solutions are good, and it depends what you require.

Please give us a call to discuss further.