How to Plan and Budget for an eCommerce Website

Author: Mikel Bruce

Mikel Bruce

Mikel Bruce

7 min. read

Updated November 13, 2023

With an eCommerce business, your website is everything. It’s the driver of both sales and marketing and establishes a 24/7 representation of your brand. 

When it comes to an online store, how much you put into the store paves the way for how much you’ll make. Unfortunately, many entrepreneurs make the mistake of investing too little into their website while expecting large returns. But if you start with realistic expectations for how much it may cost to launch a successful eCommerce store, you’ll be far more likely to succeed.

So, before starting an eCommerce business, follow these tips to better plan out your site and accurately budget your startup costs

Budgeting for the initial website build

In general, eCommerce websites require a larger investment than informational websites because there are more complex systems involved. You’ll need to consider the design and build of product pages, setting up shipping and payment processing, and implementing the proper security protocols to protect customer’s data. All of this work takes more time and resources whether you are building the site yourself or with a web agency. 

Choosing an eCommerce platform 

Your choice of eCommerce platform will determine your initial investment in the site. The two most popular eCommerce platforms are currently WooCommerce and Shopify. 

In a nutshell, WooCommerce is a free platform, which can be integrated seamlessly into WordPress. However, it’s not easy to do this on your own, and you should expect to hire a skilled developer to implement some of the more complex steps. You’ll also typically need 2-3 WooCommerce extension plugins, which can cost anywhere from $50-$100 per year per extension. One large advantage of WooCommerce is that it is an open-source platform, so there are hundreds of thousands of web teams who specialize in this technology. 

Shopify, on the other hand, is a proprietary eCommerce platform where you’ll need to pay for a Shopify account in order to build your online store. An advantage of Shopify is that you have a clear breakdown of costs per month based on your required features whereas different WooCommerce features may require different amounts of development work. One potential drawback of Shopify is that the code is proprietary so you are limited to the customization options offered by Shopify and their support services.

There are numerous pros and cons when comparing WooCommerce to Shopify. Keep in mind, that switching from one eCommerce platform to another often requires rebuilding your site. So take your time, make sure you know what you hope to get out of your site and weigh the differences when deciding on the best platform for your store. 

Template vs. custom design 

After you select your eCommerce platform, you’ll need to decide on an approach for the design and development of the website. There are two options — utilizing a pre-designed template or taking a custom design approach. 

So, which should you choose? Here are some factors you need to consider:

  • How competitive the market is for your products
  • Your time to market and timeline for the website project
  • The complexity and customization required for your products

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Working with a web template

Both WooCommerce and Shopify offer pre-designed templates, which give you a starting point for your online store. Customizing a template can be a cost-effective option for a new site because it reduces the website team’s work. It can also reduce the timeline to build the site if you need to get the products to market quickly. 

Working with a custom design

In comparison, a custom design approach means that a web designer is creating mockups from scratch. This option may be worth the larger investment and timeline if you need a high-quality design to differentiate your business from competitors. Or if you want the flexibility to actively update your site on a regular basis.

Your products and store may also require a custom approach if you’re selling products that involve complex development work. For instance, selling a product with a handful of variations, such as t-shirts of various sizes, is more straightforward compared to a paid subscription service where customers are receiving a unique t-shirt design on a monthly basis. 

Consistently rotating products and subscription services often require a lot more design and development work. Which means the custom option will likely make more sense.

Selecting a Merchant Processor 

A payment gateway is a merchant service that allows you to process credit cards on your website. Your choice of payment gateway will also impact your ongoing costs.  

If your eCommerce site is a major pillar of your business, you’ll want to set up a check out process where visitors can pay directly on your site. You want to avoid having them redirected to a third-party site to submit payment, as this can deter purchases.

To help you narrow down your options, the 3 most popular payment gateways are: 

  • Stripe
  • Paypal

All of these payment gateways integrate with Shopify or WooCommerce. The processing fees for Stripe, Paypal, or are currently 2.9% and an additional $0.30 per transaction. However, there can be additional setup fees, depending on your choice of payment gateway. 

For example, there is a free WooCommerce Stripe plugin available for the setup on WooCommerce sites, while the WooCommerce extension is a paid yearly add-on. Before selecting a payment gateway, you should also consult with an experienced developer or development team about the best solution for your given situation. 

For instance, PayPal does not offer the best options for paid subscription services that require recurring payments. So if you operate as a subscription-based business, you can immediately eliminate it as an option and look into Stripe or instead.

Planning for long-term costs

While the initial build of the website will demand the largest investment, eCommerce sites also require long-term costs to keep the site running smoothly.  

These costs often include: 

  • Hosting & SSL certificate
  • Security monitoring
  • Regular maintenance & development support 

Your choice of eCommerce platform also affects your monthly payments for these services. As a proprietary platform, Shopify offers monthly plans based on your website’s traffic, security, and support needs. WooCommerce websites have similar needs, but you’re given the option to decide which security protocols to set up, and select which hosting service you’d like to use. In this case, you get to shop around for the best hosting solution for your site, while with Shopify, your site only has one hosting option — Shopify’s proprietary servers. 

While it can be tempting to place a WooCommerce site on a cheap hosting platform to save money, this often turns into a critical mistake once the site launches. WooCommerce sites tend to perform poorly on a shared server with limited resources, especially as the traffic to the site increases.

For WooCommerce sites, you’ll also want to budget for a developer or development team to regularly update the plugins on your site. These WooCommerce security updates include critical security patches and failing to update your website can put it and customers’ data at risk. 

Jumpstart your eCommerce business

Sadly, many eCommerce businesses fail because they can’t generate enough sales to offset the above costs. Making the right choices at the beginning though can set you up for long-term success. Be sure to reference your business plan and financial forecasts to ensure you’re making the best and most feasible decision.

While your budget may determine a lot of your choices as to which platform you go for and whether you work off a template or build your own unique site, remember to consider all of the needs of your business while making these decisions. If you find thst funding is a core problem for launching your business, you can always work with a coming soon landing page to validate your eCommerce product or service. Having these results can make it much easier to pitch to investors if you’d rather spend more up front to build out the best website you possibly can.

If a loan or funding is simply not something you’re interested in pursuing, you can still make small strides to build a solid foundation for growth. Just be sure to carefully review your eCommerce site options carefully and look ahead to what you intend your business to be in 6-months, 1-year, 5-years, etc. That way you fully understand what you’re getting into, why you’re investing in the site, and won’t be surprised by any drawbacks or complications as your business grows.

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Content Author: Mikel Bruce

Mikel Bruce is the CEO of TinyFrog Technologies, a San Diego web design agency specializing in WordPress web design & development and secured hosting & maintenance. Founded in 2003, TinyFrog Technologies offers a conversion-based approach to web design and has built over 1,100 websites.