E-commerce Website Development Cost Breakdown – Starting from Scratch

Ecommerce development cost

Creating an e-commerce website is like building a house or buying an automobile. The features you have and the size and location of the asset all have a bearing on the costs. Just as granite countertops, a garage and a furnished basement perceptibly impact the price of a house, so does features of an e-commerce site, starting from the must-haves and the basic ones to high-end complex specifications.  

As a rule of thumb, the more customized the website is to meet your specific requirements the higher will be the cost of developing the site. Addition of features like renewals, shipping, taxes, licensing, cart recovery and sales reporting have a bearing on the ultimate e-commerce website cost.

Estimating the cost of an e-commerce site is not as straightforward as it is often made out to be. Planning is everything, and you have to analyze what are the requirements that you cannot possibly do without. It is always advisable to start with the basic features, keep costs low, test waters and customer feedback and make the site more feature-rich and complex as your business expands and grows.

In this post, an analysis will be made of e-commerce website pricing for sites that are being built from scratch right till the mid-sized segment and the features to be focused on. However, costs can vary depending on the location and the experience and expertise of the agency creating the site.

Primary Costs

While estimating costs, there are three that you cannot do without and which forms the very foundation of the site.

Website hosting – All websites, regardless of the type or the industry have to exist online. In the usual course, you will have to purchase a web hosting account from a web hosting company. There are many hosting companies to choose from and selecting one that will give you optimized services is often a challenge. However, here are a few points that you will do well to follow.

  • Get what you pay for – Many owners of websites start from the bottom of the price structure in hosting solutions and inevitably face problems. They have to upgrade to better and more expensive solutions for a seamless and smooth site experience. Get an upgraded package in the initial stages itself.
  • Costs rise as you grow – You can be on a budget and keep your hosting costs low for a new business where conversions are low and traffic minimal. But the resources that the site uses will progressively increase with the growth in the number of visitors and customers. Hence, factor in this cost which will be approximately linked to the growth of your business.     

Domain registration – Domain registration is an inevitable cost of an online business and is typically inexpensive. Standard domains start at $10 per year with new Top-level Domains (TLDs) costing more. Premium domains can be picked up at auctions, often for thousands of dollars. Some businesses get multiple domains for the following reasons.

  • There are variations in the primary domain or additional TLDs usually because of common spelling mistakes.
  • Need domains for specific purposes, generally related to various campaigns. Dedicated domains meant for marketing and advertising lead back to the primary domain or a particular section in the site. There are many benefits to it. First, the address can be made relevant to a campaign, thereby making it memorable for the target audience. Second, it is easier to track the progress of specific campaigns, making the calculation of ROI on market spends that much easier to arrive at. 
  • Domains for separate brands. E-commerce sites deal with huge inventories, and you can bring your prized and premium merchandise under an exclusive domain.
  • Domains for easier navigation – Often domains are accumulated in the portfolio to facilitate navigation on the site or to a page. You can have a domain especially for careers or to inform About US or for FAQs. It is a way to get visitors to the targeted page more easily. Having multiple domains should be factored into the overall E-commerce website development cost breakdown at the planning stage itself.

Cost for payment processing – Payment gateways are an integral part of e-commerce sites, and all payments are processed through them. All portals charge a one-time fee for their services in addition to the small percentage of the sales taken for processing an order before the proceeds are credited to the seller. The charges for payment processing vary as per features of the gateway, the currency it supports, and the plan opted for by the e-commerce site.

Up-front website building costs

When you are starting an e-commerce website from scratch, one of the determining factors will be the scale of your business plan and the goals and objectives you have set for your business. If you are flagging off your site on a modest scale and a $50,000 a year turnover will do for you, the cost will be in the range of about $5,000. But for a sales target in millions, the design and development cost will go up manifold, only because to meet the high expectations you should have more features and functionality to gain a market lead.

If you are wondering how much does an e-commerce website cost in 2019 here are some aspects to be considered to arrive at an estimate with some degree of accuracy.

Functionality – When you follow standardized templates for building e-commerce sites, the costs will be expectedly low. Some of the features that will be incorporated are categories features, product pages, related products, reviews and featured items. These are the very basics for an e-commerce site and should not cost you the earth. But when you want your business to be in the mid-sized e-commerce sector, you will need exclusive customized features which will hugely drive up costs of building the site. But it will also lead to higher operating efficiencies and give you a competitive edge in the market. For example, you might want customized search functions because of the type of product you sell. Or you might have a vast range of products and would want to sync the website database with your inventory. All these require advanced website building tools and technologies and professionals will charge you accordingly.   

Impact of design on costs – This is a critical factor in e-commerce website development cost breakdown. After deciding on the functionality of your website, you have to take a call on the design and how it will look. The first impression of a visitor to your site is often the thin line between a sale and a bounce out. A site that seems amateurish, to say the least will have a much lower conversion rate than a professionally designed customized website. For example, the aesthetics of the site should reflect a large established brand if you have one.

Another design necessity in today’s digital environment is a responsive site. It is a site that is optimized for browsing regardless of the screen size of the Internet-enabled device. Hence the user experience should be at its best when accessed from a desktop or a laptop, from a tablet or a smartphone. Most people use these devices for online shopping, and if your site does not cater to every segment, you will be missing out on sales and business opportunities.

The low-cost route is one where there is a fixed template or design, and only your logo or colors will be added to it. It should only be opted for if you are on a shoe-string budget and must be avoided if you plan to be a serious player in the e-commerce business.

A Budget for SEO and marketing – When you have preliminary discussions with the website building agency, make sure to inquire what services will be included in the overall package to get an idea of the e-commerce website pricing. A few agencies offer e-commerce SEO services as part of the package while others do not. It is preferable that you have marketing and SEO features built-in as it will save you a lot of expenses in future marketing campaigns. However good your website might be in all respects, if it does not have high rankings on results pages of major search engines and optimized online presence and visibility, you will not get the desired flow of traffic and conversions. Opt for online marketing and SEO services even if it costs you more at the website creation stage. 

Agency selection costs – The e-commerce development agency you choose will undoubtedly have a bearing on the overall costs. The principle here is that what you get will be what you pay for. Cutting costs and selecting a company with sub-par credentials leads to complications down the line. On the other hand, the answer to your question of how much does an e-commerce website cost in 2019 should also take into account services from a top-end agency that offers customized e-commerce solutions. The professionals of the agency should be available for discussions both during the development stage and after for maintenance.

These are some of the e-commerce website pricing patterns for sites starting from scratch to the mid-sized segment.

Read next part of this article: E-commerce Website Development Cost Breakdown – Mid-Sized to Customized Sites

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