Although starting an online store is cheaper, there are still costs associated with the process!
How much does it cost to start an online business?
Here are some expenses you must consider before launching your brand!
Business Licensing
One expense you must account for when you start a new business (whether online or physical) is business licensing.
That said, you must pay to establish your brand with the government officially.
The cost of business licensing varies depending on your location and business model!
Using services like Legal Zoom makes the business registration process simple and affordable!
Web Design & Development
Web design and development are crucial elements of any online business.
You need a website to showcase your products or services and accept customer payments.
Also, your website must be user-friendly, easy to understand, have an enticing copy, and be accessible on desktops and mobile devices.
The cost of web design and development depends on the project’s complexity, but you should plan to pay at least $500 for a basic website.
Web Hosting
Another one of the upfront costs you must be aware of is the cost of web hosting.
You need a web host when you “rent” space on the internet.
Here are some examples and costs of popular web hosting platforms:
- WordPress: Starts at $11 monthly
- Wix: Starts at $14 monthly
- Squarespace: Starts at $12 monthly
- Weebly: $0
Web hosting costs vary based on your plan and payment schedule (whether you pay monthly or annually).
eCommerce Platforms
If you’re building an eCommerce store, you must consider the cost of the platform.
Platforms like Shopify and BigCommerce offer features such as:
- Custom product pages
- Checkout forms
- Inventory management tools
- Website Analytics
You can try Shopify’s platform for free to see if you like the interface!
An eCommerce platform makes listing, selling, and tracking products easier!
Payment Processing
Several eCommerce businesses forget to factor payment processing software into their upfront costs.
You must have a secure and trustworthy payment processing platform that allows customers to pay for things on your site.
Sometimes, this type of software is free to install but takes a specific percentage of your sales.
While this might be a bummer, remember that having a secure payment system is a must-have!
Inventory
If you plan to sell physical products, like an online clothing store, you must purchase inventory upfront.
The cost of your inventory depends on the type and quantity of items you purchase.
Before investing in inventory, make sure that you research wholesale suppliers who offer competitive pricing!
Dropshipping
Dropshipping is a great way to start an online business without worrying about inventory costs.
Dropshipping allows you to partner with distributors who ship products directly to customers on your behalf.
Generally, this type of service has a monthly fee (plus the cost of goods sold).
Dropshipping is an excellent strategy if you need more money or space for a lot of inventory.
Pay Per Click
Pay-per-click (PPC) advertising is a form of online marketing where advertisers pay a fee each time an online user clicks their ad.
Essentially, it’s a way of buying visits to your site rather than attempting to earn those visits organically.
Google AdWords is one of the most popular PPC platforms.
Your ads appear on the Google search results page, and Google charges you when a visitor clicks on your ad.
This advertising strategy can have the following benefits:
- Help drive traffic to your website
- Increase sales
- Improve your website’s visibility in search engines
However, the cost of PPC advertising varies widely depending on the competitiveness of your keywords and the number of clicks your ad receives.
Also, it can be challenging to find competitive keywords that allow your business to stand out.
While there usually is some trial and error involved in PPC ads, they’re an excellent way to generate revenue and make your business look legit.
SEO
Search engine optimization (SEO) makes your website more visible in search engine results.
Basically, SEO helps you improve organic rankings on Google and other search engines.
As a result, you get more visitors to your website from people searching for products or services related to yours.
You don’t have to pay anything upfront for SEO services, but it requires an investment of time and energy to implement strategies like:
- Keyword research
- Content optimization
- Link building
If you need more expertise or resources for SEO, you can hire a professional to help with the process.
The cost of SEO services will depend on the company and the scope of work involved in your project.
Social Media Marketing
If you want to promote your eCommerce store to the right audience, utilizing social media marketing is essential.
Social media marketing allows you to showcase your products to hundreds or thousands of people on popular platforms like:
- Instagram:
- TikTok
- Snapchat
- YouTube
Typically, social media outlets charge you daily based on the number of people you want to see your ads.
For instance, if you want 100 people to see your business on Facebook, the outlet could charge $5-$7 daily until you hit your specified budget.
Content Marketing
Content marketing is another cost-effective way to build an online presence and reach new customers.
Content marketing involves creating content such as:
- Blog posts
- Videos
- Infographics
- Webinars
Further, content marketing creates things intended to deliver valuable information to potential buyers.
This type of marketing aims to establish your brand as a credible source of information related to the product or service you’re offering.
The cost of content marketing varies depending on the type and quality of content created and the number of viewers your content reaches.
Email Marketing
Email marketing costs are another expense to consider as you launch your own eCommerce business.
Email marketing helps inform your customers about the following things:
- New product drops
- Information about your company
- Order status updates
Also, email marketing is an excellent way to learn about your target audience and discover the marketing techniques they resonate most with.
Typically, web hosts offer an email marketing package you can seamlessly add to your email.
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