A guide on how to set up your e-commerce
Thinking about creating an online store? Do you want to create an e-commerce, but don’t know how much it might cost? If you answered yes to both questions, you are in the right place.
You may have received some confusing information at some point, but don’t worry, because in this article you will be able to find out the true costs of creating an online store (or “e-commerce”) according to your needs..
First, we will explain what things are 100% necessary to have your online store. From buying a domain name, to the maintenance of the website.
On the other hand, we will also explain other associated costs that, depending on your needs, may be necessary for the SEO positioning of your online store or e-commerce.
Necessary aspects to create your online store
Contrary to what many think, having an online store or e-commerce is not just having a website, and drop it out there, but you must take into account certain fundamental aspects to the creation and management of your online store, and this, of course, has a price.
Some prices are affordable; others are somewhat more expensive. Some must be paid at once, while others are paid month to month, but always keep in mind that everything depends on your specific needs. It is not the same for an online store with 1,000 references (types of products), as it is for a store with only 10 references.
You should also consider the time it takes to create an online store. It certainly is not the same thing a team of professionals does, as compared with someone with no experience.
This is what you should buy for your website:
#1 Domain and hosting for your e-commerce site
First things first, and foremost. In this case, is to have a pertinent domain name and a method to host your online store on the Internet. In other words, buy the name of your brand, and have a place for the store.
Domains can be purchased from different registrars or resellers. We recommend you use a .com or an .es domain, where prices are usually from 6,99€ for a .es domain, and from 9,99€ per year for a .com domain.
If you need someone to buy and set them up for you, you will probably be charged an additional €15 or more per domain. Be aware of the renewal conditions. Some companies sell a very cheap domain for the first year (€1 or less), but then charge €20 or more to renew each year.
As for hosting, prices are also varied, mainly depending on how big your store is, the processing speed, and the expected traffic. Generally, you can find interesting things from 10 € per month, but if you want something much more specialized, like a VPS (Virtual Private Server) of high capacities, it generally exceeds 30 € per month.
You also must consider whether it is a managed hosting, in which the hosting provider takes care of all the installation and maintenance tasks for you, or an unmanaged one, that is, where you have to take care of everything technical.
If you do not have experience for these tasks, it can be very complicated; so we recommend you opt for a managed one. At Iberactiv, we offer free managed hosting to all our customers who have other services contracted.
#2 Platforms to create online stores
If you’re here, you probably don’t know how to code, so you’ll need a platform to create your e-commerce. There are numerous platforms, again depending on your needs, which will be suitable for you.
First, WooCommerce is a free plug-in developed for the WordPress platform, which transforms your website into an online store. It is a great advantage to simply get started, although it is designed for stores with few features and small sizes. It is also recommended for certain types of products, such as show tickets or hourly service bookings (doctors, online classes, etc).
We also find in this list PrestaShop , our favorite. It is the best known, the most specific, and designed for all online stores. It is free, open-source, and allows for installation of some very interesting modules.
PrestaShop is ideal for selling physical products of all kinds; electronics, fashion, food, etc. It is very complete, intuitive, and easy to use. The only negative point is the cost of the modules and design templates. Although the core of PrestaShop is free, many additional features require modules that cost 50 to 250 € each.
With PrestaShop, you can make large and robust stores, but if you are looking for a very large store, with more than 200,000 products, it is best to choose Magento.
It is a much more stable platform and suitable for very large stores. However, it is a more complex platform with fewer add-ons and less Internet assistance, which makes development costs with Magento higher than WooCommerce or PrestaShop.
On the other hand, there is Shopify, one of the most used platforms for those who don’t want to spend money upfront. This is interesting because it does not require a large initial investment and can be easily customized. As for its negative points, you must make the online store yourself, and there are limited functionalities depending on the plan you choose. Also, their fees vary between €30 and €300 per month, which can be more expensive in the long run than if you buy a turnkey store. But the main disadvantage of Shopify is that the store is not really yours, it’s a kind of rental. Later, if you want to export the store to another platform and have it be yours forever, you’ll have to pay for the construction of the other store.
#3 Web design for online stores
As for the design or appearance of the online store or e-commerce, you must consider the platform you have used. What you should do in this case is to buy a template to install in your store. There are free ones, and there are some for up to 250 €; it all depends on what you need.
Among the platforms listed in the previous point, only Shopify works in the cloud and comes with its own templates. If you have significant computer skills, you can create the store yourself.
WooCommerce, PrestaShop, and Magento are already Content Management Systems (CMS).
They are installed in the hosting of your choice, and require programming and design knowledge, sometimes advanced. For this reason, it is best to hire a professional to do it. The design of a store with one of these CMS has an average cost of about €1,500. The final price will depend on several factors, such as:
- The number of product references.
- Whether products are added manually or imported from Excel.
- In case of products added by hand, if you, or the designer does it.
- If the store requires additional modules.
- If you want to customize the design or use only the features of the template you choose.
- If the store requires advanced programming (“web scraping”, synchronization with other stores, etc).
And of course, the price point of the professional who designs the shop. As with any service, they will provide a variety of budgets, and they will likely deliver a better or worse quality service. Cheap is not necessarily bad and expensive good, but if they charge you too cheaply, they will hardly deliver something good. Therefore, compare not only the prices, but also the level of communication and professionalism of each company. This is noticeable from the very first encounter moment. Your peace of mind is priceless.
#4 Payment terminals for e-commerce
To sell you need a payment system to receive money from your sales. It is best to add a Virtual POS provided by your bank, or use an external service such as Stripe or PayPal, although it is advisable to offer a variety of different payment methods.
For this, you must consider the cost of the virtual POS license that is negotiated and ranges between 50 € and 200 €, and monthly maintenance which can reach 20 € . Not counting commissions, which are usually around 1% for each transaction.
Stripe currently charges 1.4% + £0.25 for European cards, and 2.9% + £0.25 for non-European cards, but has no setup or maintenance costs. PayPal charges for cards without a PayPal account 1.2% + a fixed fee that depends on the buyer’s currency. For payments with a PayPal account, it costs 2.9% + the fixed fee. Fortunately, there are also no setup or maintenance costs.
#5 Tailor-made functions for your online shop
If you have an unusual online store and need things not included in typical e-commerce, you will need to buy either a module in the case of PrestaShop or a Plug-in for WooCommerce. There are free ones, but there are also some that cost more than 250 €, depending on the necessary functionality. Some examples of these features are advanced product searches and filters, bookable services (e.g. shows, special courier conditions, etc.).
You may also need someone to customize these functionalities by hand with code, but this will be a bit more expensive, as you have to hire a PHP/ MySQL programmer. With Iberactiv, additional programming costs are included in the budget.
#6 Shipping costs of your e-commerce
Another aspect to consider, and that many people overlook, are the shipping costs when selling products online. Normally, this price is assumed by the buyers, and is added to the invoice as a part of the sale. The cost usually depends on the company you hire to make the shipments, the weight and size of the packages, and the address of the buyer.
There are many courier companies in Spain. The best known are SEUR, DHL, MRW, and Correos Express. Some of them you will only be able to work with if you are launching your shop with a very high number of shipments per month. Therefore, to meet the shipping needs of small shops that are just starting, we have partnered with Packlink Pro.
This is an independent courier service which has an agreement with these large companies, and they can offer shipping rates, even up to 70% lower. You can give your buyers the option to choose between several carriers, depending on whether they prefer faster or cheaper shipping. If you don’t have an agreement with a courier company, we will help you create an account on Packlink Pro and install the module at no additional cost.
#7 Management and maintenance of your online store
Online stores don’t manage themselves. You need someone to be there virtually daily to upload new products, manage orders, promotions, and so on. The good news is that online store platforms are very intuitive, and easy to use if you have the know-how. When we deliver an online store, we train you by videoconference to use it step by step, and we advise you afterward with any concerns that may crop up.
Normally if the business is small, you can do it yourself, but if it grows you will probably need someone specialized and dedicated to it full-time. Most likely, you will also have to take care of a variety of other things. For this, you can either hire a salaried person at a rate of no less than €1,400 per month full-time, or you can hire an agency to do it for you. Depending on the volume of sales, this could be more economical for you, as you only pay for the time you ask the agency to work each month.
An online store also requires technical maintenance. These are computer programs after all, and all programs need periodic updates. In the case of web applications, moreover, unexpected errors often occur requiring the intervention of a programmer. You can hire it under the modality of “bank of hours”, that is, you pay in advance for several hours when you need them. They are usually between 30€ and 80€ per hour, depending on the level of the programmer and the number of hours you reserve.
At Iberactiv, in addition to hour banks, we offer managed web hosting services with maintenance. In addition to making automatic daily backups in the cloud, we update your store’s software periodically, monitor it 24 hours a day, and fix bugs when they occur. The monthly fee ranges from 30€ to 100€, depending on the complexity of your store, and the resources it needs. It is a kind of “health insurance”, which prevents you from having to pay a large amount if something seriously goes awry with the store.
#8 Legal aspects of e-commerce
If you are a company, you won’t have any problems, as you will simply be selling differently. But if this is your first business idea and you work alone, keep in mind that you will have to register as self-employed; requiring a fee that today in Spain is almost 300 € per month for a minimum contribution base. However, if you are just starting, currently you have a flat rate of €60 for the first 12 months.
You will also need the help of an accountancy and tax agency to take care of some of the bureaucracy. The price depends on the level of service provided, from €60 per month just to do your accounting and file your taxes, to €250 or €300 per month if they advise you on other issues (subsidies, payroll, legislation, etc).
However, you can start with the shop, and hire the agency or register as a freelancer when you actually start selling. Although if you do it before, you have the advantage of being able to deduct VAT on everything you invest in the shop.
Other costs of creating an online store
You have seen the main costs of having an online store but this is not enough. Well it is enough to have a basic online store and leave it there, but if you want to sell there are other associated costs that are also important for your success. Read on to see the other optional costs of creating an online store.
You know a store without promotion does not sell. You can be on the Internet, but if you do not advertise, no one will find you. So you will have to invest something in promotion either in SEO, with Facebook or Google Ads, through social networks (you can create stores on Facebook / Instagram), email marketing, or influencer marketing.
Doing this yourself without knowledge can be risky. That’s why we recommend that you hire a digital marketing agency to manage your campaigns, or at least advise you and teach you how to do it effectively.
The cost will depend on what you want; the more you invest, the more you will sell, but it is not necessary to make a huge outlay to promote yourself on the Internet, as digital marketing is cheap compared to traditional media. With 200 or 300 euros a month you can start doing interesting things.
So… How much does it cost to create an online store?
Now, answering the million-dollar question, and if you haven’t done the math based on the numbers provided, currently it is possible to have an online store at a very affordable price. The development of e-commerce is not too big an investment. Especially, if we are talking about the fact it is vital for the survival of companies.
It all depends on your needs. If you need a small, simple, and basic shop, you will have to be prepared to invest €600 and €2,000. A medium, slightly advanced one can go from €2,000 to €10,000. A large, multi-functional, handmade shop can cost up to €50,000.
Doing it on your own is undoubtedly the cheapest option, but also the one you will have to put the most effort into. Without prior knowledge, you will encounter many difficulties and you will probably end up disappointed, both personally and financially.
That’s why we recommend you hire someone to advise you and take into account this guide so you can set limits and not get ripped off. You want to buy an online shop, not be sold a motorcycle!
The ideal is to hire a company to handle the design and promotion, and to advise and teach you. Then, you’ll be prepared to take care of the management and maintenance.
In conclusion, creating an online store is accessible to everyone, although it is necessary to make a minimum initial investment and commitment.
Think about your future
E-commerce is just one part of the digital transformation. It is increasingly necessary for the survival of businesses today, so we believe that sooner or later, if you sell, you’re going to have to start selling online. It’s simple: adapt or die.
Therefore, as your business progresses, you may need advanced digital transformation services, such as process, task and marketing automation, business process modeling, or agile tools for when you already have people on staff. It is impossible to determine the cost of these tasks a priori, but the important thing is that they are becoming more common and affordable.
Do you have any questions, do you have any comments, or do you need a quote or advice for an online store? If so, do not hesitate to contact us through the form on this page. We will be happy to assist and advise on whatever are your needs.