Although it may seem very inexpensive (and it can be), there are costs associated with setting up an online store. Indeed, depending on what you want, and what you need, Internet store costs can start to add up. It is important to shop around for providers that will offer you the best deal, and for providers that fit your individual business needs.
Common Internet store costs
While the costs that you have for your online store will vary depending on what you are hoping to accomplish with your store, there are some common costs that you can expect to pay:
Web hosting. This is one of the most common costs. You will need a place that serves as your home in cyberspace. Web hosting is when you pay someone else for space on his or her server. You can buy your own server, of course, but that becomes rather expensive – prohibitively so if you are a small business owner. Web hosting ranges in price from free to more than $500 a month, depending on how much space you need, how much data you send, and what sorts of services and support you get from your Web host. It is important to note that free Web hosting usually has inferior service and outages can occur. It is often best to look for a Web host that at least offers some services – and maybe even a template – for somewhere between $10 and $50 a month.
Merchant services. If you accept credit cards, you need merchant services. A merchant service will facilitate transactions and help you process credit card payments. Increasingly, merchant services can also help you with debit cards and eChecks. If you have an offline merchant services provider that you are satisfied with, you might ask how to go about including Internet transactions from an online store. It is also worth noting that Amazon PayNow, Google Checkout and PayPal now provide merchant services as well. The cost of merchant services vary, depending on the company. But average costs include a per-transaction cost (usually between 19 cents and 30 cents), a discount rate (usually between 2.15% and 2.50%) and other monthly fees, including statement fees and processing fees if you do not meet a specified minimum.
Payment Gateway fees. Payment gateways are what allows you to conduct business online. These Internet store costs are unavoidable. There are different fees associated with payment gateways online, and these are charged in addition to your regular merchant services fees. Some of the common payment gateway fees you may encounter include:
- Termination charges.
- Chargeback fees.
- Support/HelpDesk fees.
- Setup fees.
- Annual fees.
- Minimum transaction fees.
SSL. Secure Socket Layer (SSL) is an encryption protocol that keeps your customers’ information secure. Most online shoppers will not buy from you if you do not protect their information with some sort of SSL certificate. These certificates run from between $20 to around $1,000. Price depends on whether you buy your own certificate or use your Web host’s certificate, the issuer, and the level of security you are guaranteeing.
Business license fees. Of course, if you have an Internet store, one of the costs is a business license. You need to be properly licensed as a business in your state if you want to sell online as a commercial business. Fees range from $5 to more than $200, depending on the state. You also may have to renew annually. Check with your Secretary of State or the local Chamber of Commerce to get a better idea of what is required for a business license
Catalog fees. If you plan to sell items in catalog style, you will need to pay for software and support. Depending on how many items you want to include, and depending on how much bandwidth you use, the cost can be anywhere from around $5 a month (for a limited catalog of around 50 items) to more than $30 (for 2,000 items) or $50 (for 5,000 items) per month. In some cases, you may have to pay extra for email support.
As you can see, Internet store costs can run into the thousands of dollars if you are not careful. However, there are companies and Web hosts that offer a variety of ecommerce packages designed for small and start-up businesses. Additionally, you can open up a storefront on eBay or sell through Amazon to get support and services at a reduced cost. However, if you plan to look professional and stand on your own, you will need to consider additional costs of Web site design and development as well. Make sure you shop around, and look for good packages that include all of the services you need. If you are savvy about it, you can usually get everything for between $50 and $200 a month, depending on your business type and what you plan to sell – as well as how you accept payments.