The Average Start-Up Cost for an eCommerce Business

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Many budding enterpreneurs are under the impression that starting an e-commerce website can be done without investing hard dollars. Granted, it is true that you may be able to do this without leasing an expensive office or taking on high amounts of inventory. However, just like any business, be prepared to invest funds in the development stage as well as the operating stage to give your e-commerce website the best chance of succeeeding.

State Registration & Licensing Fees

All businesses, even Internet and e-commerce business are required to properly register their business with the Secretary of State and obtain any necessary licenses and permits as required by the local authorities. The fees can vary greatly by state, by your corporate structure and by the type of business you are operating. Check with a trusted attorney to be sure you have all of the proper documentation to legitimately conduct business.

Domain Name Registration

You will need your own website address. Although there are many extensions available, most prefer registering an address that ends with .com. You will need to contact a local service provider or find a domain name registrar that will register the name on your behalf. Fees for domain name registration can vary from $5 to $35 per year depending on the registrar you are choosing. Some companies may offer a domain for free if you choose to sign up for some of their other services. This is an annual, recurring expense, or you can pay for multiple years in advance.

eCommerce Site Development

You will need a functioning site that allows visitors to add products to a shopping cart and complete the purchase with a major credit card. There are many options for this solution. There are off-the-shelf solutions as well as customized solutions. Some providers offer a package that comes with a monthly charge for licensing the software. Some software for shopping carts is free, but you may require a consultant or programmer to complete the integration. Depending on your needs, it may cost several hundred or several thousands of dollars to develop a site that meets your e-commerce needs.

eCommerce Web Site Hosting

Once you have your site built, you will need a proper web site hosting package to make sure your site is available to Internet browsers. Make sure you choose the appropriate hosting package that provides for a secure server certificate to help protect credit card data. You may have seen hosting packages advertised for $1 per month or less. These may suffice, but you need to confirm that they have the features available so your website properly operates.

Marketing & Promotion

Make sure you save some money that you can commit to marketing and promoting your new website. If you are unable to drive traffic to the site, it is unlikely you will receive sales with any sort of consistency. Typically, the more you spend, the more people you can potentially reach and encourage them to visit your site. However, just because you spend a small fortune buying advertising does not mean those visitors become sales. Track the performance of your Internet marketing dollars to achieve the best results.