How Much Money Do You Need to Start an Ecommerce Store?
So you’ve decided to start an ecommerce store. Congratulations! This will be an exciting journey for you and we wish you the best of luck. Still, we know it can be hard getting your store off the ground, especially when you are trying to decide what to sell, worried about failure or not sure how to get your idea off the ground.
While there is a lot to think about, we’d love to give you some pointers to get you started; primarily by answering the question how much does it cost to start an ecommerce store? Obviously, there is no one right answer, but here are a few things to consider that will get off to a healthy start.
Stock & Awe
The first step in determining the cost of your virtual venture is to calculate the core cost of your business model. How much will it cost to stock your store (or store your stock)? Answers to questions like these are entirely dependent on the person selling the product and the product itself. If you are selling t-shirts, you can likely store boxes at your home, if you feel comfortable with a house full of packages. If you are selling handmade wooden furniture, you may need to find a much larger solution, such as a storage facility.
Another method is drop shipping, which allows you to buy products once they are sold through your website. While this is an extra cost, it is a viable option that frees you from the trouble of stocking products or opening your storage to find that everything has been stolen. Drop shippers usually charge wholesale fees, slap your logo on the product and expedite the shipping process.
It’s also important to think of what you are selling. If your products are cheap, it’ll be hard to see a return on your investment. If they are pricey, it could be hard to find an audience. Do some research to see who your competitors are and how likely your business model is to succeed.
A Website to Behold
Of course, an ecommerce store isn’t much without a website. Depending on your needs (or your ability to develop a website from scratch) you could be looking at a few hundred dollars to tens of thousands for a site built by a professional agency. Still, among the best free ecommerce website builder in my opinion is probably Shopify, a software-as-a-service platform that provides simple tools to build your site and operates your server so you don’t have to.
Running a site, especially a successful site, isn’t totally free though. While you can dedicate much of your own time to the project, eventually you may need to hire a webmaster to field incoming customer requests, troubleshoot issues, manage returns and more. If you are looking to save money, you could probably hire freelancers or interns to help manage the day to day.
In some ways, marketing today is cheaper than ever before. Store owners are able to grow an audience on a variety of social media platforms and promote their products without ever dropping a dime. Others will use these same outlets and take advantage of paid post promotion from Facebook, Twitter or Instagram; an affordable solution that definitely catches more eyeballs.
There is, however, a downside to social media marketing — it takes a lot of time and dedication to build a page, grow an audience and constantly update feeds with relevant content. In response, many store owners work with marketing, SEO or advertising agencies. This is a much pricier solution, but the hope is that experts working in these industries can grow your visibility online for better return on investment. Cost for these services can range from a few thousand dollars for a three-month contract, to tens of thousands for more comprehensive plans.
Clearly there are positives and negatives to any approach in marketing and the solution really depends on your resources. Don’t be afraid to experiment a little. There is no ‘one size fits all’ solution and only you can discover the perfect balance for your online business.
It’s Up to You
In the end, starting your own ecommerce could be virtually free as you store your products in your home, manage marketing yourself and take advantage of free ecommerce website builders; or it could cost several thousands to acquire the proper storage, distribution, marketing and website design that agencies need to get your product off the ground.
Remember, it takes money to make money, especially when you are looking to grow your business and greater demands are put on you to uphold your resources. Nevertheless, you are about to set on a great adventure all your own. Happy selling!
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