With multiple possible costs, it can be hard to calculate the expected cost of starting an online store.
To help you, we have done the calculations and combined it all into one easy-to-follow article!
We’ll aim to give you an honest look at the different costs involved.
If that sounds like something you’re looking for, keep reading.
Note: If you’re wondering what the cost of starting a dropshipping store is, we encourage you to check out our article on that topic. The costs are a bit different from this! You can find the article here.
What are the different costs of starting an online store?
When starting your online store, you need to count on different costs, including:
- Business startup costs
- Ecommerce platform costs
- Domain name costs
- Setting up your online store
- Product research costs
- Fulfillment costs
- Advertisement costs
- Payment processor fees
Let’s do some calculations next to give you a better overview of how much the above costs will be.
Breakdown of the total cost of starting an online store
If you are interested in a detailed breakdown of online store startup costs, see the following bullet points:
- Business startup costs. Startup costs range between $132 and $325.
- Ecommerce platform costs. Platform costs range between $0 to $439 a month.
- Domain name costs. Domain name costs range between $8 to $20 per year.
- Setting up your online store. Online store setup costs range between $0 to $835.
- Product research costs. Product research costs range between $0 to $49 a month.
- Product fulfillment costs. Fulfillment costs range between $0 to $10,000 a month.
- Advertisement costs. Advertisement costs range between $0 to $20,000 a month.
- Payment processor fees. Payment processor fees range between 0.15% to 3.49% of the transaction.
If you add all of these together, this is how much the total cost will be:
- One-time costs. Before starting your online store, you can expect to pay between $140 to $1,294 to register your business, buy your domain, and set up your online store.
- Monthly payments. To run your online store, you can expect to pay between $0 to $30,488 monthly to pay ecommerce platform, product research, product fulfillment, advertisement, and payment processor costs.
1. Business startup costs
To start your online store, some of the first costs are business startup costs.
Yes, you need a business license to run your online store legally (no matter the platform you sell on).
In the US, you can expect to pay an average of $132 for setting up your LLC. In Europe, the average cost of setting up your business was 300 euros back in 2018, and it hasn’t changed much.
Even though we mention the business startup costs first, you can start with other parts of the ecommerce business already. When your sales start coming in, make sure you have your business set up.
Business startup costs: $132 to $325, depending on the country you set up your business.
2. Ecommerce platform costs
Your ecommerce platform is the base on which you will build your online store.
This is a cost that is hard to get around because it’s essential to invest in an ecommerce platform that is easy to use and scalable.
We will next go through some of our top choices for ecommerce platforms and their costs.
The best ecommerce platforms for creating an online store
For most people creating online stores, we recommend Shopify because of their extensive app store, easy-to-use platform, and great customer service.
Shopify also offers the first three days for free, and after that, the first month costs only $1.
Plus, you get free hosting with Shopify, so that’s a cost out of your way.
However, there are also other great options if you want to compare the costs!
Here is an overview table showing some of the most popular ecommerce platform choices and their costs:
| You need: | The best option(s) for you: | The cost: |
| The best platform overall | Shopify or BigCommerce | Between $29 to $439 per month |
| The best SEO performance | WooCommerce | Between $0 to $200 per month |
| The platform built for dropshipping or POD | ShopBase | Between $19 to $249 per month |
| The cheapest option | Shift4Shop (in the US) or ShopBase | Between $0 to $249 per month |
| The platform with the best resources | Shopify | Between $39 to $439 per month |
| The most flexible and customizable platform | WooCommerce | Between $0 to $200 per month |
| The platform with the easiest setup for an online store | Shopify | Between $39 to $439 per month |
As you can see, the cost varies a lot.
It all depends on how much customizability you want and what platform you select.
For example, there are many free Shopify apps, as well as paid apps, for those who want more customizability.
The same goes for themes.
Shopify has many free themes and paid themes that can help you create a more professional-looking store.
Or, you can choose Shift4Shop, which is technically free in the US if you process a minimum of $500 per month through their payment processor. The only cost is in processing fees.
While we can’t cover all the platforms here, there are many great ecommerce platforms where you can build your online store.
Ecommerce platform monthly costs: $0 to $439 a month, depending on the platform and if you choose additional things, like apps and themes.
3. Domain name costs
An online store needs a domain name.
Some ecommerce platforms, like Shopify, offer free custom domains (such as calmingblankets.myshopify.com).
However, we don’t recommend using the custom domains since they don’t look professional.
Investing in a custom domain is one of the best low-cost investments you can make and a crucial factor in customers trusting to buy from your online store.
Extra tip: After you purchase your domain, you can use Zoho to get a free professional email address. We’ve made a tutorial here on how to get it!
Domains are not that expensive. You can expect to pay between $8 to $20 annually for a domain name.
Namecheap is one of the most popular and trusted platforms for buying a domain.
Domain cost: Between $8 and $20 per year, depending on the platform and extension (For example, .com, .net, or .org).
4. Setting up your online store
When you actually start building up your online store, you have different costs you have to take into account.
These tasks include:
You have two options with these.
If you don’t have the required skills to do the above things, you can outsource them to someone else. This is more expensive but saves you time.
If you want to make savings and have the required skills, you can do all these yourself.
Learning these skills might pay back in the long run!
If you decide to outsource everything, this is how much you can expect to pay if you hire someone from Fiverr:
- Logo design. To hire someone to create a logo for your online store, you can expect to pay between $5 to $25.
- Designing your online store. Depending on the platform, you can expect to pay anywhere between $30 to $300 to hire someone to create an entire online store for you.
- Online store speed optimization. If you want someone to speed-optimize your online store, it costs anywhere between $10 to $60. This is popular, especially for Shopify stores.
- Creating product pages. If you need help creating product pages for your online store, you can expect to pay anywhere between $5 and $150 for one product page.
- Taking product photos. If you want to hire someone to take professional product photos for you, expect to pay anywhere between $20 to $300.
There are obviously other tasks involved when building your online store, but most of them you can do for free.
You can also save a lot, for example, by starting with dropshipping fulfillment and using the product photos your supplier provides you. You can also use different dropshipping AI tools to make savings on things like product description writing.
Creating your logo: $0 to $25, depending on if you create the logo yourself or outsource the work.
Designing an online store: $0 to $300, depending on if you build up the store yourself from the ground up or hire someone to do it.
Online store speed optimization: $0 to $60, depending on if you use free apps (within Shopify, for example) or outsource the store speed optimization.
Creating product pages: $0 to $150, depending on whether you outsource work or do it yourself.
Taking product photos: $0 to $300, depending on whether you have the gear to take the photos yourself or if you outsource it.
Total cost: Between $0 to $835 to build your online store.
5. Product research costs
If you don’t know what you want to sell yet, you may need to do product research, which can involve some costs.
This is optional, depending on whether you already have a product.
If you want to look at an entire list of the best product research tools, we have made an entire article on the best free and paid options.
Here is a brief look at some of our favorite product research tools:
While most of these are paid tools, they have free trials, and there are also a bunch of free options for doing product research that you can try.
For example, you can go through Amazon Movers & Shakers or Pinterest Trends to get inspiration for products you could start selling.
Product research costs: $0 to $49 per month, depending on if you use free or paid product research tools.
6. Product fulfillment costs
Online stores can manage their inventory and shipping through different fulfillment methods.
The costs will be a bit different depending on which option you select.
The most popular fulfillment methods are dropshipping, print on demand, in-house fulfillment, and using a 3PL company.
Let’s go through each one and their costs in more detail.
Dropshipping
Dropshipping is a fulfillment method where you don’t hold any inventory yourself. Instead, a supplier ships products directly to your customers once you receive orders.
If you want to keep your costs minimal, dropshipping is one of the best fulfillment methods.
If you use dropshipping as your fulfillment method, you work with a dropshipping supplier, who you must pay to hold your inventory and send out customer orders.
You don’t manufacture the product yourself with dropshipping, meaning there is no cost for that. Instead, you sell products the dropshipping supplier platforms already have (CJdropshipping and Modalyst have massive catalogs).
The cost of using a supplier platform is between $0 and $200 per month, depending on which dropshipping supplier platform you use.
And, of course, there are the product and shipping costs, but these only apply after you begin getting orders. Since you’ll have already started earning by then, we don’t include these costs in our initial calculations.
Print on demand
Print on demand is a fulfillment model where you create your own product designs. When a customer places an order, a manufacturer prints your design on the product and ships it to the customer.
It’s similar to dropshipping, as you partner with a supplier. However, in this case, your supplier is a print on demand supplier.
Most print on demand suppliers are free, but if you select a paid plan, the cost is between $9 and $99 per month.
On top of this, you pay the product and shipping costs once orders come in.
Another cost with print on demand is the product design cost. If you hire someone to design for you, it could cost between $5 and $100 per design.
You can also do this for free if you have the design skills!
In-house fulfillment
In-house fulfillment basically means that you hold the inventory yourself at your own house. If you want complete control over your fulfillment process, then this might be the right choice!
If you choose the in-house fulfillment option, you have to ensure that you have enough inventory at all times, and once you receive an order, you will pack and ship the products.
The downside of in-house fulfillment is that it can get quite expensive.
First, you have to find a manufacturer who will make your products. This could be from Alibaba, for example. Then, you negotiate with them to ship a batch of stock to your house.
Unlike dropshipping, these manufacturers usually have a minimum order quantity (MOQ), and you can’t buy the products one by one.
In our own experience, you can expect to pay anywhere between $500 to $10,000 to buy your first stock from a manufacturer.
Once you have the stock, you also need to cover the shipping costs for sending products to your customers.
3PL company
3PL companies are third-party logistic companies that handle the storage and shipping of your products.
You send your product stock from the manufacturer to them, and they keep your products in their warehouses. When orders come in, they ship the products directly to your customers.
The difference between a regular dropshipping supplier and 3PL companies is that 3PL companies usually have warehouses in multiple countries and can provide you with fast shipping times.
3PL companies are not cheap options, and we recommend them only to people who are already doing sales with their online stores.
You can expect to pay anywhere between $100 to $2,000 per month to use 3PL company and its services. This amount can increase based on the volume of orders you receive each month.
Remember, this does not cover the costs you’ll pay your manufacturer when they send the product stocks to your 3PL company.
Dropshipping fulfillment cost: $0 to $200 per month, depending on the cost of the dropshipping supplier you work with.
Print on demand fulfillment cost: $0 to $99 per month on print on demand supplier and $0 to $100 on merch design (one product).
In-house fulfillment cost: $500 to $10,000 to manufacture and send out stock to your house.
3PL company: $100 to $2,000 per month to use 3PL company and their warehouse. This excludes the inventory costs.
Total product fulfillment cost: $0 to $10,000 per month, depending on the fulfillment method you choose and how many orders you make each month.
7. Advertisement costs
While the advertisement fee is not directly related to your online store, you have to make sales somehow, and advertising is one of the main ways for most online stores.
There are three ways you can advertise your products:
The exact costs can vary, but let’s break down each method.
With paid ads, expect to pay anywhere between $50 to $150 to test a new product. This is based on our own experience doing product testing.
For example, this could mean running Facebook Ads for three days at $50 per day. Let’s say you tested four different products in a month, which means that the monthly cost would be $600 per month.
If you go for organic traffic to promote your products, it’s basically free. But, if you need someone to make videos or images, it might cost you.
For influencer marketing, the cost can vary significantly. However, you can expect to pay anywhere between $1 to $5,000 for a sponsored post.
Paid ads cost: $200 to $600 per month, depending on how many products you test and how much money you spend each day.
Organic traffic cost: $0 per month if you create all the marketing materials yourself. If you outsource video or image production or SEO is your organic traffic strategy, you may need to invest extra money.
Influencer marketing: $1 to $5,000 for a sponsored post. If you do four sponsored posts in a month, the cost would be between $4 and $20,000.
Total advertisement cost: $0 to $20,000 per month, depending on your advertisement method and budget.
8. Payment processor fees
Once orders start coming in, you need to deal with payment processor fees.
You must integrate a payment processor into your store to allow customer payments.
Some of the most popular options are:
Each payment processor has its own fee structure. Again, you only have to deal with these once you start getting orders in, so don’t worry too much about them.
Payment processor fee breakdown:
PayPal: 3.49% + $0.49 fee per every transaction.
Stripe: 2.9% + $0.30 fee per every transaction.
Shopify Payments: 0.15% fee for every transaction
As you can see, the fees are pretty small, with Shopify Payments offering the lowest costs. However, these payment processors are not available in all countries.
If you want to understand payment gateways and their fees better, take a look at these articles from us:
FAQs of online store costs
Next, let’s look into a couple of frequently asked questions about online stores and their costs.
Can you start an online store for free?
Technically yes, you can start an online store for free if you use low-cost platforms like Shift4Shop, Weebly, or Ecwid. However, we recommend investing money early on so you have a higher chance of succeeding with your online store.
How much does it cost to run an online store?
You can expect to spend between $0 and $30,488 monthly to run an online store in 2024, with the majority of expenses going toward advertising and product fulfillment. This range includes ecommerce platform fees, design costs, advertising, product fulfillment, and domain purchase.
What is the best platform for hosting an online store?
For most people, the best and the easiest option is Shopify. However, there are many great alternatives, like BigCommerce, WooCommerce, Ecwid, and Adobe Commerce (Magento).
Taking action
Reading and absorbing information and knowledge is great (definitely if it’s’ free!), but do you know what’s even better?
Taking action!
So, to help you with taking action with what you have learned in this article, take a look at the bullet points:
- Calculate your budget. Before you start building up your online store, calculate your budget. This will help you make important decisions later on.
- Consider your options. When you know your budget, you can start considering your options. What ecommerce platform should you go with? What fulfillment method fits your needs the best?
- Start building your store. Once you know what you want, you can start building your store! If you need help with the process, don’t forget that we have an entire guide on building your online store.
- Put your skills to use. When building an online store, you must be good at many things. When you start building, it’s time to use your design, marketing, and advertising skills!
- Outsource what you can’t do. If you want to save time or don’t know how to do specific things, you can outsource them. These might include designing your store, writing product descriptions, or producing ads.
Conclusion
That’s it! An overview of the different costs involved when starting an online store.
To conclude, you can expect to pay between $140 to $1,294 as one-time costs and $0 and $30,488 monthly when starting, building, and advertising your online store.
To be honest, advertising and product fulfillment accounts for the bulk of these costs.
Obviously, it’s hard to calculate the exact cost, and it may even cost you less or more, depending on your choices.
If you have any questions regarding the costs or building up your online store, don’t forget that you can always leave us a question below.
Good luck!
Want to learn more about ecommerce?
Ready to move your online store to the next level? Check out the articles below:
