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Costs of an Ecommerce Site

costs ecommerce site

6:15 am on Mar 12, 2007 (gmt 0)

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Hi, I'm planning on building a website for a 31,000 sq. foot furniture retail buisness (the client is expecting around $10,000 worth of sales online). I'm not experienced with ecommerce site building and am wondering what the best set-up would be.

From what I've learned in the past few hours of research I've discovered that my best options would be to either use:

Yahoo stores - hosted ecommerce website that costs about 25 dollars a month plus takes a 1.5% commision (easiest route)

OSCommerce - do everything by hand for free (minus other misc. expenses that I'm about to ask you about).

Would it be better to use Yahoo stores or OSCommerce given that the sales would be around $10,000/month? (The 1.5% seems killer but Yahoo stores seems like it includes everything and OSCommerce seems like it would be a lot of work and I'd end up having to buy other stuff like SSL certificates and such)

Alright, so say I decide to go with the OSCommerce route.. What other fees would be associated with starting an ecommerce website? SSL Certificates? Merchant Accounts? What else?

And what's the best way of hosting an ecommerce website? I currently have a 5.95/month godaddy.com deluxe hosting account? Could I get away with just using that with OSCommerce or do I have to buy the other things like SSL Certificates and Merchant Accounts. The users of the website have to be able to pay with credit cards and I need a host with MySQL/PHP support (obviously).

Thanks for reading this! :) And sorry if I bothered you with my newbish questions. But please pity me and give me whatever feedback you may have. Even a direction to another thread that answers one of my questions would be much appreciated.

7:34 am on Mar 12, 2007 (gmt 0)

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Don't even consider cheapest.

31,000 SF? 10K a month? This is serious, don't think small. Wife's biz is 600 SF, niche market, over 1500 products (minus options, include those and it's well over 3000 products,) still growing but currently $4-$5K/month. and *we* are SMALL.

We use a full dedicated server - not a virtual dedicated server - our own secure cert, custom shopping cart, and interface with a merchant gateway to receive payment.

There's a whole host of issues you need to address besides the cart and how your client is going to accept payment: shipping, inventory control, security, order fulfillment and management, and most importantly a reliable site platform to handle it all. The *right* way to do it would be with a dedicated server with its own secure cert, and payment processing through a secure gateway to a valid online merchant account.

Just a few short months ago we were struggling along on shared hosting. It works, but still had problems. Half of those went away when we moved to a dedicated server. Since you're using "G.D.," you wil see that their dedi plans come with one year's cert, and part of those packages is a whole slew of bundled software including a few shopping carts. <extremely pleased>

I cannot speak for off-the-shelf shopping carts, I construct my own. What you may find, however, is that every one *almost* does what you need, but without that 1% that it doesn't do sometimes it renders it worthless. In any case I would strongly suggest you avoid ones that require an annual license, or requires you use a proprietary system - by this I mean it should be loaded on and reliant on only your server.

1:55 pm on Mar 12, 2007 (gmt 0)

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"31,000 sq. foot furniture retail business"
Would you suggest that they move their B/M store into a $30-a-day, 150 Sq Ft, kiosk in a regional mall?

Why cheap-out on the web especially if you're new at ecommerce and aren't expert in cutting corners?

Take a look at Shopsite, by the way.

4:08 pm on Mar 12, 2007 (gmt 0)

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I would recommend a custom shopping cart solution, but, we build them and that's probably why.

You're going to get a lot of head aches with Yahoo and other systems that don't do EXACTLY what you need them to do. Especially in the post order stages.

Things to consider; How is your staff going to process orders? How are you going to handle customer service related issues? What if the customer isn't happy with their product? How are you going to offer them a service to make them happy and continue to do biz with your company in the future? Don't you think you probably need an automated post-order processing system to intelligently handle shipping processes and customer service related issues?

If every company in the world could make $120k/yr selling products online from a site that costs them under $1,000/yr...they would be doing it!

My advice is to consult with multiple custom cart solution providers. Talk to them over the phone and articulate what you need. See what they can offer to you. Maybe you'll be fine going with osCommerce or Yahoo. But, how do you know what's out there unless you do some research?

For example; when I buy a car I visit multiple lots and talk to multiple sales people. The more options I have, the better educated of a choice I can make. Get the best system that works for your company that's within your company's budget!

8:39 pm on Mar 12, 2007 (gmt 0)

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In short: Leave your hands off that project.

Asking for technical advice, you are doing the seventh step before the first. Among the many questions that come up with such an idea, let me just raise a few:

What's your key-target-audience?
How are you planning to attract visitors to your webshop?

We also make 30-40k ecommerce-turnover per month with a 450 sqft B&M-store. Given this, it is an absolute must to think BIG for that project, and this means to target upper six or low seven figures turnover per month, but not 10k. And that seems beyond your skills.

I have no idea about your specific niche nor country, but I assume the broader market "furniture" is already completely taken by the larger chains and global players. Do you really think any customer is going to make a decision for a 1000$-investment in furniture based on a 200x200 pix image of an ordinary shopping-cart-system? So unless you want to present some small and cheap niche-stuff (which is quite unlikely for a 35000 sqft-store), you can be sure you are competing with some really big players who have their web 2.0-application almost finished for upload. Some 3D-animations for this market will be an absolute must in the very near future, and I doubt any standard and affordable shopping-cart-software does already include this.

I'd recon two alternatives:

A) Seek support in this forum [webmasterworld.com]. If you manage to find a good and experienced consultant among the many posters here in webmasterworld, you will have done a much better job for the benefit of your customer. A good consultant will not only discuss technical aspects, but enlighten you about your chances in ecommerce on a much broader level, from search-engine-marketing to shipping costs.

B) Skip the webshop-idea, think long-term and analyse your options in second life. (Is it allowed to post a link to that site?) I think, that's a much more interesting plattform for any design stuff, much newer, and thus much less competitive.

8:54 pm on Mar 12, 2007 (gmt 0)

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How the hell do they expect to do 10K per month without having a site up now? Did they pull this number out of the air?

Do they know that building the site is only a small part of the battle? Online marketing is the huge part of the battle and one that will cost them money.

Anyway, in 2007 I've used both Yahoo Stores and OSCommerce and would recommend Yahoo - especially if you're just starting out.

9:31 pm on Mar 12, 2007 (gmt 0)

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OSCommerce is a great platform to START with , it's quite flexible and most importantly it has the largest community , therefore would be easiest to find a skilled coder/designer with knowledge of the platform to customize it.

Our site generates monthly profits well above the discussed here. We started with a plain OScommerce installation and upgraded modules and designs almost every week adding functions and features where we found needed . Till this day i still do minor mods on a weekly basis.

In my opinion though, forget about Yahoo and all that stuff, 1.5% of 10k per month is 20+ hours worth of work from an Indian PHP programmer happy to mod your OSC store. Not to mention privacy and control issues.

Something to think about...

9:56 pm on Mar 12, 2007 (gmt 0)

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First of all, welcome to WebmasterWorld.

Please don't cheap out because you don't understand all that's involved. SSL certs aren't expensive in the scheme of things. And you'll need a merchant account to process credit cards - the store probably already has one, it just needs to get set up for online processing.

I'd start with something like X-Cart and mod from there as needed. Yahoo is Yahoo, what they have is all you get - more or less. Not very flexible and you might find you've outgrown it before you start.

You'll definitely want larger pics as Oliver suggests. Most carts need modification or tweaking of some sort to get to have really nice large images that integrate nicely with the design of your site. You'll also want to have these photos professionally produced - it makes a huge difference in quality.

  • How do you want the site to work?

  • How many steps do you want for checkout?

  • Does it need to tie in with your backend inventory system, and if so, how?

  • Do you have any special requirements for any of your products - like options or shipping restrictions, or? that will require specialized programming outside of what your cart allows?

  • Who will be managing the day to day order part of the site and will the cart you choose do things in a way they can understand?

Goodness, there are so many things that go into a successful online store - that's not even a partial list...

You also didn't mention marketing - don't think that just because you build it that business will come. It won't just fall into your lap. You need a budget and plan for marketing the site, PPC, affiliate - offline promotions - how are you going to do it?

Hosting: you won't want to run your e-commerce site on a shared $5.95 hosting package. First of all, you need your own IP address for your SSL certificate. Second, shopping cart software makes database calls - lots of them and you'll want the power of a virtual private host at the very least. Otherwise your store will be down or have lots of errors - which doesn't endear people to buy.

You've got a good place to start with the questions raised in this thread and this forum has lots more where these came from. ;)


6:59 am on Mar 13, 2007 (gmt 0)

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First of all, I'd like to thank you all for all the great feedback! I'm glad I found this forum.

Also, I apologize for the poorly worded first comment. I'll reiterate my concerns:

I'm building a website for a 31,000 sq. ft furniture retailer. This buisness sells custom furniture and delivers only within New Jersey. Right now, I'm only building a portfolio website for the buisness - directions on how to get there, the who, what, where, when, and why, etc. However, the owner told me he'd be interested in making online ordering possible.

The goal of the website would be to make it easier for more convienient for a customer to place an order on their own time.

Example: Sally goes in "Furniture Store". Sally sees nice couch. Sally doesn't buy it but goes home and tells Bob, her husband, she wants it. They decide they want it and instead of going back into the furniture store to place the order, they place the order online through the website.
(This is why online marketing is not that big of a deal.)

This would basically be an experiment to see if sales would increase significantly with the introduction of an ecommerce website. And thus, the reason why I'm concerned about the cost of everything (since the budget for the website is basically coming out of the buisness' petty cash account). And since Yahoo is pretty damn cheap and easy to set up, I figured that might be a good way to go just as a way of testing how eCommerce would work out. OSCommerce seemed like another easy solution, maybe even better because it could be possible to stick with it if the website grew.

HOWEVER! Right now, I'm leaning towards MonsterCommerce.com ($125/month would be very doable), especially after all the flaming for being penny-wise dollar-foolish.

And oh yeah, let me address a few points made:

* My fundings are low - no $2000 servers yet.

* I'm very capable of designing the actual site, just not doing the whole ecommerce part of it. (MonsterCommerce.com would be able to handle that, no?)
* I'm cheaping out because they now receive all of their buisness from walk-ins just like a grocery store but want to begin a transition to a "hybrid" eCommerce buisness. This is just the beginning - an experiment and the owner doesn't want to spend a few grand on something that isn't likely to return anything.

* A custom cart solution? What would that be? Do you mean have your guys design the site and then register it with something like MonsterCommerce.com? Or do you mean you design everything from scratch, give it to us and let us host it on godaddy.com or something?

* Advertisement would be done through a light Google ad campaign. Also, they produce 100,000 circulars every and would include the website and possibly a special promo for using the website (5% off your sofa when you purchase online). Also, people interested in the store would be referred to the online store if they decided to leave. The buisness has no plans of redoing its' entire structure around the website - the website is meant to be more of a second jab at the customers wallet (that sounds evil but I'm just gonna leave it like that because I'm tired and want to go to bed).

* The buisness specializes in sofas. That's why they don't have a website yet. Poeple like sitting on sofas before buying them. But, again, the website would just be meant to give the customer a little more convienece. A place to buy the sofa after they sat on it, after thinking about buying it, in the comfort of their own home.

* It would be nice to have the website tie in with the backend inventory system but that's something that can be worried about later if it's not easily done.

* Ignore that whole $10,000 tidbit too the owner just gave that number as a number to indicate success (which is when I'd call in someone more capable of the job).

* I have access to some professional photography equipment so I'd be capable of taking some worthy pictures.

So, what do you guys think: do you think MonsterCommerce.com would be an ideal solution considering the situation I am. Or would there be a more recommendable solution? Is MonsterCommerce.com the best value in its' tier?

Again, I'd appreciate any feedback at all you guys have to offer! Thanks for reading this too :)!

And oh yeah, how much should I be expecting for this? I'd be making the CSS template of the website, implementing the eCommerce solution (whatever that may be), photographing the items, and maintaining the website. I'm a college student with a lot of experience with CSS template design and the owner is my girlfriend's dad (which should affect the pricing :P).

7:37 am on Mar 13, 2007 (gmt 0)

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Oh yeah, what do you guys think of Miva vs. MonsterCommerce for my situation?
10:56 am on Mar 13, 2007 (gmt 0)

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....This buisness sells custom furniture and delivers only within New Jersey....

If the scope intends to remain local, it would make more sense to me as a shopper to *not* purchase online for such an expensive item, I'd rather take the drive and physically see the furniture. A better online solution for a local biz? Set up the site for customers to make payments on their accounts.

I'm leaning towards MonsterCommerce.com

Correct me if I'm wrong - don't you have to host the entire ecommerce portion of your site on THEIR servers? So now you have two hosting solutions to deal with, right? And all your product database and images are loaded on their servers?

. . . after all the flaming for being penny-wise dollar-foolish. . . .

I don't think that's what everyone's saying really. For something this large, you should think in terms of expandability.

* My fundings are low - no $2000 servers yet.

But then,

($125/month would be very doable)

If you pay a year in advance, you can get a FULL dedicated server for around $114/month or less. That's about $1400 for the whole year. Look around. :-) And as mentioned, you can probably get a dedi lease with the first year's secure cert and it will have multiple carts already bundled on it.

A custom cart solution? What would that be?

Just like you are "hired" to design the "portfolio" site, you hire a programmer to develop a shopping cart solution that meets your needs perfectly and the files and functions live on your domain's and server. It's yours to modify, tweak, or have another programmer work on at some later time. If the answer to the question about MonsterCommerce above is "yes," that is not the case. Have a falling out with them or fail to pay a fee, everything you've done goes *poof* until you square it up.

2:56 am on Mar 14, 2007 (gmt 0)

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I agree that it usually makes more sense for a shopper to not purchase the item online. However, hypothetically, there are cases where it becomes more convienient to purchase something online with a credit card. If a person knows exactly what they want and have already seen it in the store, they can purchase it online. And if that secures two buyers for the buisness a month, the website is worth it. I like the idea of having tracking available for in-store customers too though - thanks for that.

What're the two hosting situations? The 5.95 godaddy thing and the ecommerce account? The godaddy account is just a little temporary service for now. And the owner would not want anything to be hosted locally so a hosting package is neccessary. Also, part of hosting the website externally does include having all of our data loaded on their servers but it's easy to FTP it and we can always have everything back-upped on our computers too.

And for saving money by just going with the full dedicated server - doesn't that include having to pay a programmer to make a custom cart solution? That'd be another $2500 (at least from what I've seen) right off the bat. Also, that wouldn't include any documentation, live support, and likely wouldn't be a very user-friendly idea for any future "web administrators".

So anyway:

MonsterCommerce.com seems to offer everything I need and could need - live support, documentation, an easy to understand UI, everything included. A custom cart solution would probably be $2500

And as for expandability: can't we just switch to a custom cart solution later if it's successful or is this a difficult task to crossover?

I have a couple more questions:

If I decided to go the OSCommerce route, how much money a month would it cost to host something adaquete?

Is OSCommerce trustworthy? Trustworthiness is a big issue. People would be spending large amounts of money online buying sofas.

Is there anything I'm getting confused about MonsterCommerce.com? It's seeming like the perfect solution right now. Any objections to that thought?

8:23 am on Mar 14, 2007 (gmt 0)

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After reading this thread, I am both small B&M and online. 6 years online after starting with a brochure site and doing about 10k to 20k per m. online.

At this stage I would recommend purchasing an cart software with source code, hosted on a top quality shared account.

I agree with the posters that are concerned with someone else owning your shopping solution. OScommerence is workable but takes a lot of tweaking to make it look and function professionally ( I am using it on one of three sites). I would recommend one with more polish out of the box and better structured code, but there are quite a few under and around $500 that are good starter solutions. The reason for a full featured (at least given the price range) boxed solution is that you will not really know what you need/want until you have been at it for awhile. Good carts will have more features then you will use at first, with experience you will be able to identify the weaknesses that are important in your business. In my opinion custom carts are justified when you have high volume mission critical back office operations that must be integrated and automated.

If the code is well structured, hiring a consultant to do minor modifications is not too expensive, and you can cost/benefit it better after you have been running a year or so.

From a hosting perspective GOOD shared hosting is the way to go. It is pretty easy to migrate to a higher level hosting solution when you are ready for it and are fully aware of the implications. The quality of your site software will have as much to do with responsiveness of the system as the load on the servers if you are on an upper tier provider. On a dedicated server you are generally responsible for a greater portion of the management of the server (there are some fully managed dedicated servers plans) and while you can learn it hands on it is not the place to start if you do not have a network/database management background.

Godaddy would not be my first choice. I would be shopping in the upper end of the 15 - 40 dollars per month, 24/7 support and at least good phone support during us business hours are mandatory for me.

The expectations are another issue, every business is different and the mixed channel models are still evolving. There are several good trade mags/ezine, internet retailer comes to mind. Many types of retailers are finding that people do intital comparision shopping on the web, features, pricing, selection and purchase in person after a touchy feely session. With the increasing localization of search on the web you may find it to be true in your case too. Be sure you track in store sales, from contact initiated on the web.

As far as overall budget, (ASSUMING you do ALL of the Content and DESIGN work) 2000 to 5000 should do a good job.

Really on the cheap but good enough
6 months hosting $200 ( you will probably choose wrong and want to change after 6 months ;P)
cart software 400
SLL cert 50
merchant acc 150
Professional hand
holding installation
and design integration 500

Getting people to the site
initial launch 35,000

or 1 year to 18 months and alot of self eduction and in-house work for natural search, in house email, email referrals and word of mouth off line promotions.

The point is the vast majority of sites do not get significant traffic. If you are risk adverse, go limited but solid on the infrastructure, spend manpower and test approaches on content and marketing, most of all be patient.

But no matter how you cut it the real cost is in developing the content and preparing it for the web, web sales conversion and search engines. It can be ten times and more the cost of everything else if you are starting from ground zero depending on the number and nature of the products.

One persons view

9:29 am on Mar 15, 2007 (gmt 0)

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And for saving money by just going with the full dedicated server - doesn't that include having to pay a programmer to make a custom cart solution?

See previous, there are multiple carts offered with the dedi solution I have at G.D. (not using them, but they are provided with the server.)