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THE REAL COST OF E-COMMERCE & HOW TO SELL SMARTER

07/06/2022

E-commerce is a big priority for businesses these days. The digital landscape can be confusing as there are multiple options, all at different price points, commission percentages, and levels of difficulty in setting up. More often than not, business owners are just outright confused, and confused people do nothing. We have pulled together some important information on the things you need to consider when looking at building an e-commerce website.

THE COSTS

For those that don’t want to use a web designer to create their online presence, there are e-commerce options available but they don’t come for free.

SHOPIFY

Shopify is one of the most popular ecommerce platforms. It gets expensive though with monthly fees of approximately $42 AU per month for a basic plan. That's approximately $500 per year just to host a website. You also have to pay for your domain name which can be anywhere from $20 - $50 per year.

Setting the account up is the easy part! Now you have to build your website. The time it takes to do this depends on how many products you have. If you just fill out the boxes and set up the basics your website will look fairly plain Jane (still takes an average of approx 20 hours to complete this stage). If you choose to learn the design process yourself, you could invest another 30 hours into it and still need external help (think about your hourly rate x 20 hours and it starts to add up). Depending on how complex your inventory and shipping rules are, you might need to get some expert help to create custom features. The cost to hire a Shopify web builder starts from $1,000 and can be up to $30,000.

As a conservative estimate for the first year, your set up cost with Shopify would start from $2700. For those with a small online range, or limited technical understanding this figure can blow right out and eat away any profits.

WEB DEVELOPMENT COMPANIES

Some business owners realise that e-Commerce websites can be challenging to build. Confusion leads to procrastination, delay and frustration, along with lost time, money and resources. Engaging a web developer can be expensive. It’s important to get 3 quotes at all times, and check their previous work to make sure they are reputable.

To engage a web developer, you need anywhere from $1000 – $30,000. There is no set price for building an online store because the cost varies for different companies, depending on the functionality you need. You still have to pay for your domain name, hosting fee and SSL certificate (if it’s not built using a platform like Shopify). All of this can cost you around $300 per annum.

Your website will need regular updating if your products change regularly. Again this is more time and if you need to engage a web developer to do this for you, you are looking at an hourly rate of $120 - $200/hour.

INSURANCES

Cyber security insurance is something to look into when you are looking at creating an e-commerce business. Don’t assume that you’re covered just because you have public liability, management liability or other business insurance policies in place. Cyber insurance policies cover your risk exposure and, at the very least, includes cover for things like business interruption, loss of data, legal expenses and data recovery. On average, a cyber security insurance policy for your online store will cost around $1000 per year.

WEBSITE RUNNING COSTS

According to the latest research, most small business owners spend around $40,000 in their first year, with 9% of that allocated to online business needs.

WHAT IS THE ALTERNATIVE TO SELLING YOUR PRODUCTS ON AN E-COMMERCE WEBSITE?

Joining an e-commerce marketplace is another option to sell your products online with minimal initial set up costs. Every year, the 18 biggest marketplaces sell $1 trillion worth of products. The 2022 Australia Post E-Commerce Industry Report states that 5.4 mil households purchased online monthly in 2021. Having a Business listed in an online marketing is key in ensuring you have the best digital footprint to be able to access these consumers.

SHOP LOCAL SA

Some of the popular online marketplaces such as Ebay, Amazon and Etsy offer you established traffic but come with big competition from overseas retailers. Customers are price sensitive and will compare prices among hundreds of retailers who sell the same products. It is not easy to compete with already established retailers from overseas who have user reviews and selling history.

Shop Local SA is an online marketplace full of products and experiences from South Australian businesses. It provides a one-stop-shop for consumers to buy online knowing they are supporting local.

Shop Local SA is all about contributing to the success of South Australian businesses, underpinning thriving communities and supporting trade between consumers and South Australian businesses.

Our local team works at state, region and town level and helps support South Australian businesses to leverage the strong Shop Local movement.

So, whether you are new to selling online or are looking to bring a new distribution channel into your digital business model we invite you to join us on the journey to bring what consumers are looking for – an easy way to support local.

Learn more here …

https://about.shoplocalsa.com....

THE REAL COST OF E-COMMERCE & HOW TO SELL SMARTER

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